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Behavioral economics: ideas and frameworks explained

A collection of ideas, frameworks and techniques related to Behavioral economics, explained clearly so they are easy to understand and share.

Examples of variable rewards and their irresistible addictive power to get us hooked like the reward chest, email, and gamblingVariable RewardsTwo people walk through many white swans before bumping into a black swan. One claims it was obvious all along.Black swan eventsThe tyranny of small decisions: 3 people order more expensive items and end up with a large bill because they knew they were splitting itThe tyranny of small decisionsPhysics envy: a football coach looks on exasperated as none of his young team play according to the planPhysics EnvyLooking under the lamppost, the streetlight effect, or the drunkard's search: a person asks someone scrabbling on the floor under a lamppost at night if they've lost their keys. The person replies they lost them elsewhere, but the light's much better here.Looking under the lamppost: the Streetlight Effect or the Drunkard's SearchThe paradox of choice: a poor soul confronted by a giant pizza selection raises their expectations, wonders about everything they're missing, anticipates getting it wrong and then blames themselves for picking the wrong oneThe paradox of choiceThe bullwhip effect: A person whipping a bullwhip showing how the amplitude of shocks increases through retailers, manufacturers and suppliersThe Bullwhip EffectThe Tragedy of the Commons illustration: a cross-section of land shows a shared source of underground water being heavily used by one with access to it, leaving very little for everyone else. The tragedy of the commonsCampbell's law illustrated with examples from elections and leading to fake news and a crackdown on crime distorting how it is reported and measuredCampbell’s lawWhat is the Cobra Effect? A visual explanation showing how a plan to pay for dead cobras in India backfired when people began breeding cobras to claim the reward.The Cobra EffectGoodhart's law illustration showing a manager frustrated by 1000's of tiny nails when measuring on number of nails made, and pulling their hair out when presented with giant nails when measuring on weightGoodhart’s Law: when a measure becomes a target, it ceases to be a good measure.What is the Fresh Start Effect example explained: a brave person thinks challenge accepted on Monday 1st January thanks to the Fresh start effect from Katy MilkmanThe fresh start effectBenefits to you from getting started chart — put it off and stress about it = no benefit, start now with something = some benefitBenefits to you from getting startedProspect theory

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