Tag Archive: behavioral economics


Delving into Minimalism


Minimalist are the group of people who defy the term “Consumerism“. Consumerism promotes acquisition and accumulation of goods. On the other hand, minimalism is a lifestyle that embraces “less is more” concept. There are very less documented scientific evidence available about this lifestyle. However, books on minimalism galore in online market place.

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Lionel Robbins in his book, “An Essay on the Nature and Significance of Economic Science” has given a definition for economics through the lens of scarcity. The definition is given by him is imperative even now. He defined,

“Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”.

                                                                                                                             – Lionel Robbins

Scarcity of any commodity creates demand for it and that demand leads to higher price ( based on demand curve).

Robert Cialdini in his famous book “Influence: The Psychology of Persuasion” has mentioned “Scarcity principle” can be used in persuasion. His article titled “The Science of Persuasion”  he explains how scarcity can influence people and how marketers use it influence consumers. This article explores about the use of scarcity in marketing context to persuade consumers. Before getting into the literature, let’s have a look at an example of scarcity effect in marketing.

Online platforms like Amazon, Ebay, Flipkart and many other websites mostly creates this scarcity effect to influence consumers to buy product. Take a look at the picture given below to get a good grasp of practical use of scarcity appeal. Continue reading

Decisions in real life


For the last two years, I have spent part of my time in reading about how humans make decisions. I have bought books like Predictably Irrational by Dan Ariely, Thinking Fast and Slow by Daniel Kahneman, The Art of Thinking Clearly by Rolf Dobelli, Nudge by Richard Thaler and Cass Sunstien, Misbehaving by Richard Thaler and Decisive by Chip and Dan Heath. I’m yet to read Misbehaving and Decisive. I just thought to share what I have learned from the books.

Humans are thinking that they are taking rational decision in their life. Rationality is actually questioned by the books that I have mentioned above. Given a choice (imagine you are dieting), would you like to consume chocolate cake (your favorite one) or raw vegetables. You can pick only one out that. What will you choose? Both are available at free of cost. Will you pick up veggies or will you prefer chocolate cake?. Think about it. I don’t really know what you are going to pick up. Yet this is what you really face everyday, you want to work hard and reduce your weight and get fit. Continue reading