Behavioral Economics.
What we know (or believe that we know) of human behavior is certainly applicable to marketing and very often should be factors to be considered when making financial or economic determinations.
Economists consider the interrelationships of resources as wealth to be harvested, created, nurtured, distributed or consumed. Applied to broad societies, these considerations are economic; applied to individuals, lesser organizations or enterprises they are less economic and more of financial considerations.
(I cannot offer a more explicit difference between economics and finance. Both economics and finance are generally best described in monetary terms and often discussed as if its purpose and justification is one and the same. Their essential difference is that one serves primarily the interest and welfare of individuals and lesser organizations, the other's more concerned with the entire society).
The purposes of economics and finance often coincide but in some situations they diverge. For example contracts, (agreements) freely entered by principle parties are generally advantageous to both parties, but law prohibits some agreements that have been determined not to be in society's best interest. This concept's the justification of building codes and zoning ordinances.
Greed is a great motivator. Behavioral economists concerns are conditions and situations for which the profit motive may not be the optimum motivator. In some cases employing the profit motive would be contrary to our purposes.
During the Second World War Germans stationed their fighter aircraft and ack-ack guns with consideration of our aircrafts' ranges, cruising speeds and the strategic importance of our targets. As an incentive of hope, we pledged to rotate bomber crew members to state side assignment after their 25th mission. This was at time when the average duration for England based bomber crewmen was less than 15 missions prior to being killed, wounded or captured.
What would have occurred if we had instead offered them a monetary reward? (We do pay all servicemen in war zones some extra hazardous duty pay).
Wouldn't fighter pilots expect similar compensation? Wouldn't we have to offer something similar to all servicemen? The life expectancy of merchant seamen in the North Atlantic weren't that great. Is there an amount of monetary reward beyond which any feasible increased reward could not induce exposure to greater risk or suffering? Self sacrifice to equal the numbers or the extent of suffering that was actually endured? These non-monetary considerations of a most valuable resource, the lives of our servicemen are concerns of behavioral economists.
Does this example seem farfetched? Let's then discuss the privatization of jail or penitentiary operation and administration. If we consider these facilities as only a means to store criminals securely, then evaluation of private contractors is not too difficult. It may be cheaper to execute all criminals rather than incarcerating them. We have not chosen to do so. The vast majority of prisoners return to society.
When we determine an economic advantage due to vocational or academic training of prisoners, how do we justify the denial of similar opportunities to law abiding citizens? There's both a social and an economic cost of such denials. These are also questions for behavioral economists.
Behavioral economists try to factor in these released prisoners expense to our society. They also try to factor in the economic and social expense of diverting resources from other persons and government services in order to service criminals prior and after their release. Money's critical to economics, finance and marketing but not only money should be considered.
Respectfully, Supposn
What we know (or believe that we know) of human behavior is certainly applicable to marketing and very often should be factors to be considered when making financial or economic determinations.
Economists consider the interrelationships of resources as wealth to be harvested, created, nurtured, distributed or consumed. Applied to broad societies, these considerations are economic; applied to individuals, lesser organizations or enterprises they are less economic and more of financial considerations.
(I cannot offer a more explicit difference between economics and finance. Both economics and finance are generally best described in monetary terms and often discussed as if its purpose and justification is one and the same. Their essential difference is that one serves primarily the interest and welfare of individuals and lesser organizations, the other's more concerned with the entire society).
The purposes of economics and finance often coincide but in some situations they diverge. For example contracts, (agreements) freely entered by principle parties are generally advantageous to both parties, but law prohibits some agreements that have been determined not to be in society's best interest. This concept's the justification of building codes and zoning ordinances.
Greed is a great motivator. Behavioral economists concerns are conditions and situations for which the profit motive may not be the optimum motivator. In some cases employing the profit motive would be contrary to our purposes.
During the Second World War Germans stationed their fighter aircraft and ack-ack guns with consideration of our aircrafts' ranges, cruising speeds and the strategic importance of our targets. As an incentive of hope, we pledged to rotate bomber crew members to state side assignment after their 25th mission. This was at time when the average duration for England based bomber crewmen was less than 15 missions prior to being killed, wounded or captured.
What would have occurred if we had instead offered them a monetary reward? (We do pay all servicemen in war zones some extra hazardous duty pay).
Wouldn't fighter pilots expect similar compensation? Wouldn't we have to offer something similar to all servicemen? The life expectancy of merchant seamen in the North Atlantic weren't that great. Is there an amount of monetary reward beyond which any feasible increased reward could not induce exposure to greater risk or suffering? Self sacrifice to equal the numbers or the extent of suffering that was actually endured? These non-monetary considerations of a most valuable resource, the lives of our servicemen are concerns of behavioral economists.
Does this example seem farfetched? Let's then discuss the privatization of jail or penitentiary operation and administration. If we consider these facilities as only a means to store criminals securely, then evaluation of private contractors is not too difficult. It may be cheaper to execute all criminals rather than incarcerating them. We have not chosen to do so. The vast majority of prisoners return to society.
When we determine an economic advantage due to vocational or academic training of prisoners, how do we justify the denial of similar opportunities to law abiding citizens? There's both a social and an economic cost of such denials. These are also questions for behavioral economists.
Behavioral economists try to factor in these released prisoners expense to our society. They also try to factor in the economic and social expense of diverting resources from other persons and government services in order to service criminals prior and after their release. Money's critical to economics, finance and marketing but not only money should be considered.
Respectfully, Supposn
