via emergence.cc
Spot on. Lately I've been quite fond of saying something like "economics isn't about money, it's about value.
Innovation + experience-minded design strategy. The pieces of a working model for understanding culture + change in an increasingly complex world.
Spot on. Lately I've been quite fond of saying something like "economics isn't about money, it's about value.
Behavioral economists and psychologists have long been discussing the cognitive implications that naturally come with the abstraction of currencies. Cash is a more abstract form of exchanging value than physical barter/trade, and the credit card is an even more abstract form of exchange than cash. Generally speaking, the more abstract the exchange, the less cognitive impact it has on our long-term thinking and decision-making – often with negative results, as indicated by the rates of credit card debt in the US and elsewhere. As we move into virtual currencies where value is increasing exchanged via SMS, mouse click, or natural gesture motion, many design and cognitive thinkers are expressing their concern about the implications of these even more abstract methods of exchange.
The Proverbial Wallet series of concepts have these thoughts in mind, developed by a tangible interaction team at the MIT Media Lab. These concept wallets incorporate elements of physical and social feedback into the act of spending, bringing a level of cognitive impact back into the purchase process. Each gives a nod to the principles of at-a-glance information and immediate feedback, and their importance in giving people the tools to make better decisions. See below for the team’s description of these concepts:
Peacock: The wallet appears to grow and shrink using a servo to reflect the balance in your accounts. Your assets will be on display to attract potential mates.
Mother Bear: The wallet protects the money within it when you need to be thrifty with a shorted motor in the hinge that resists opening. It promotes saving to weather out financial winters.
Bumblebee: The wallet buzzes through a vibrator motor whenever your bank processes a transaction. This encourages a conscious connection between handing over your credit card and your hard-earned money being harvested from the bank, and alerts you to fraud when you get a buzz without making a purchase.
[via @carlablumenthal | img via Boston.com]
Merry Miser is a mobile application that helps its users to make better decisions about spending. The application uses the context provided by a user's location and financial history to provide personalized interventions when the user is near an opportunity to spend. The interventions, which are motivated by prior research in positive psychology, persuasive technology and shopping psychology, consist of informational displays about context-relevant spending history, subjective assessments of past purchases, personal budgets, and savings goals.
Excellent primer in these first couple of minutes on behavioral economics as it applies to market dynamics vs social dynamics.
5 Creepy Ways Video Games Are Trying to Get You Addicted
This article is fascinating and of course hilarious, being Cracked (though I'm not prone to calling these types of things "creepy"...). Some things it calls to mind:
Why do so many of us have that void? Because according to Everything Expert Malcolm Gladwell, to be satisfied with your job you need three things, and I bet most of you don't even have two of them:
Autonomy (that is, you have some say in what you do day to day);
Complexity (so it's not mind-numbing repetition);
Connection Between Effort and Reward (i.e. you actually see the awesome results of your hard work).
GS: Why can't you just tell people what the meaning of, say, polluting is?
GN: You can. It's called propaganda.
GS: Why shouldn't we use propaganda then? Why do you have to let people discover the meaning of such things for themselves?
GN: The discovery of radical alternatives happens in smaller steps and in individual minds and hearts. For example, I love baking and I used to do a lot of it in my big old gas oven. Then I put a sensor in my kitchen and learned that a lot of CO2 gets produced. Even after I turn the oven off, hours afterward, CO2 was still sitting in my kitchen to a tune of 2,000 parts per million. The cookies were long gone and I was still sitting in a soup of gas. Once I became aware of that, my wife and I got a convection oven instead, and now we bake with that. I bake less and the oven is a little smaller, but I don't have a CO2 lake in my kitchen anymore. It became actionable to do less because of harm reduction, essentially.
Greg Niemeyer is an artist and game programmer working with interactive art at UC Berkeley. He integrates game mechanics and behavioral economics into projects that get people to change their behavior. I love the above quote from his interview with CITRUS, referencing one of his latest sensor projects that allows people to easily monitor their own air quality.
We try to force meaning onto people all the time. It's not just called propaganda. It's also called advertising.
It's generally assumed that economics is about money, which is incorrect. Economics is about value; it just happens that sometimes money is valuable. This is why behavioral economics has little to do traditional financial dynamics with and more to do with traditional social/psychological dynamics.
I was talking not too long ago about how it tends to be frustrating to get dollar coins back from change machines.
You'd think a dollar coin would be just as valuable as a dollar bill, but it's not. This is because it's easier to lose small metal coins. I was telling my friend that I'd gladly change my dollar coins for bills instead, were I able to find someone who'd find the exchange of equal value (not bloody likely).
Economics is about value (irrational), not strict numerical comparison (rational).
Behavioural economics is described (by Thaler himself) as ‘ libertarian paternalism’. This is the idea that while people should be able to live their lives as they want, “it is legitimate for choice architects to try to influence people’s behavior in order to make their lives longer, healthier, and better”.
I find the counterintuitive reality of how we make decisions compellingly beautiful.
If you'd like, there's a rather wordy explanation of behavioral economics below:
Hello friends and collaborators. I deal in innovation, working to build fantastic experiences enabled by the digital world. As part of this I track cultural change, primarily through observations guided by models and filters calibrated over years to sort out the cream.
These pieces of thoughts here reflect concepts that are elements of those models: ecosystem thinking, long-term value, information filters, and pattern recognition.
("How to break anything" is an abstract notion that reflects my background in observation and analysis. Rules are meant to be broken, but only through understanding the rules - observing them with an empathetic eye - can they be broken constructively.
So how to break anything? Observe everything.
[You can't observe everything so how do you know what to observe? That's another project that I call Filter Theory - see the About link above.])
