If you want to communicate value clearly, then behavioral economics can help. That’s because behavioral economics combines the study of economics (this includes the study of how groups of people make purchase decisions) and psychology (how individuals make decisions).
That said, we have a very special episode of The Modern Consultant here today, because I have the pleasure of hosting Dr. Sean Ericson – an economist specializing in innovation and climate change.
While his current work is focused on electric utilities and meeting their decarbonization goals as we adapt to a changing climate we talk about much more:
We talked about:
1. Sunk cost and its impact on decision making, emphasizing the importance of focusing on future prospects.
2. The link between behavioral economics and evolutionary biology. Drawing from psychology to understand decision-making processes.
3. Individual and group decision-making, exploring the balance between individual costs and collective benefits, with climate change as an example.
4. Game theory implications on personal relationships and the influence of one’s actions on the choices of others.
5. The complex interplay between relationships and transactions, highlighting the positive externalities of relationships in economics.
6. The concept of trust in collaborations, the impact on decision-making and values, and the psychology of self-sabotaging behavior.
Timestamps:
00:00 Four big questions in economics around individual and group.
06:14 Value in marketing and economics is complex.
09:00 Make choices based on future, not past.
11:27 Behavioral economics shows limits in decision-making.
14:17 Individuals balance costs and benefits for group.
18:42 Act in a way that benefits others.
23:37 Building trust is key in business relationships.
25:12 Collaboration in game theory requires trust.
31:14 Navigating money and transactions in business relationships.
34:47 Relationships can lead to unexpected benefits.
39:05 Balancing group interests while preventing free riding.
About Guest:
Sean is an economist specializing in innovation and climate change. Sean has a masters in energy economics from the Colorado School of Mines and his PhD from the University of Colorado Boulder. His current work supports electric utilities meet their decarbonization goals and adapt to a changing climate.
About The Host:
Marc helps experts scale their impact in the form of high-ticket courses, programs, VIP days, and masterminds (without losing the deep impact of their 1-on-1 work).
After helping over 1,000 entrepreneurs, he created his Product Flywheel Framework to help the next 1,000 do it faster. Learn more at: https://8020solutions.co
