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Heuristic, Bias, and Effect

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In this video, we are not going to look at any particular behavioral economics principle as we usually do but rather we are going to look at some foundational concepts. There are other foundational concepts than what I would cover today but if you have to start learning about behavioral economics it's good to clarify these concepts first as without understanding these concepts, it would be almost impossible to learn behavioral economics. Let’s see what those are.  If you look carefully, most behavioral economics principle names will have terms such as Heuristics, Bias or Effect. For example - Action Bias or Availability Heuristics or Bandwagon Effect. We are going to see what these three terminologies mean in behavioral science and economics - Heuristics, Bias and Effect.  Let’s see them one by one... Heuristics  Heuristics are cognitive shortcuts that help us make quick judgements and decisions based on whatever information we have from our past experiences and whatever ...
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IKEA Effect

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  I worked so hard for this video that I should be given Best YouTuber of India award!  ...Dhishum…..- Let’s see what the IKEA effect is. Shall we?  IKEA effect states that the more effort we put into something, the greater love we develop for that particular creation and we often overvalue that creation even when they are poorly constructed or designed.  Now let’s see why it is called the IKEA effect. In 2011, Mr. Norton and his colleagues conducted an experiment at the IKEA store to find out how people value their products.  To their surprise, participants were willing to pay 63% more for the self assembled furniture than the readymade ones. Moreover, participants were willing to pay even a higher price for the furniture they have to assemble completely on their own rather than just partially assembled furniture.  The IKEA effect experiment changed the perception of product strategists and designers from looking at customers as merely "recipients of value...
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Choice Overload

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  There are so many behavioral economics principles, it took me two days to decide which one to present today! Let’s see what Choice Overload is...shall we?  Hi everyone, I am Prashant Kulkarni and welcome to my channel on Behavioral economics. I take one principle every week and discuss it in detail and how it is applicable for today’s product strategy and design.  I stayed at the Caesar Hotel in central london few years back. I still remember the breakfast there, especially for one reason. Cheese buffet. The breakfast used to have almost 50 plus types of cheese and for the first couple of days I remember ending up spending too much time deciding which cheese to eat for breakfast. After a couple of days, I simply decided on one type of cheese and ate it for the rest of my stay for breakfast.  Another example of confusion while making choices - Netflix. I simply stopped watching Netflix because every time I open it  I simply can’t decide what to watch! Far too ...
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Scarcity

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  Diamonds were formed billions of years ago and are extremely rare, thus perceived as very special and valuable.  Hey everyone, I am Prashant Kulkarni and welcome to my channel on behavioural economics.  Today we are going to discuss a principle called Scarcity and Scarcity bias. Dictionary meaning of scarcity is deficient in quantity or number compared with the demand. Scarce resource will always have a value associated with it. So this onion can be a scarce resource if the demand is high compared to its availability.  The scarcity principle simply means resources which are scarcely available are perceived to be more precious. Tigers, Diamonds, In some countries even Food is a scarce resource and thus very precious.  But the scarcity principle goes even further and also deals with how these resources are allocated as compared to its demand.  There are some methods to allocate these resources against its demand and these are some of the fundamental problem...
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Test blog post

 This is a new blog post created for testing purpose. 
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