When Yelp was a startup with just 15 employees, the office manager began to stock the kitchen with drinks and snacks to get everyone through the long afternoons. Juice, water, fruit, chips, and as much candy as could be stuffed into the small kitchen drawer. Being at work was like being, well, a kid in a candy shop: a bottomless supply of Snickers, Twix, 3 Musketeers, M&M’s, Almond Joys — the list goes on.
Why COOs Should Think Like Behavioral Economists
The job is about shaping people’s choices.
October 31, 2017
Summary.
In a world of rational economic decision making, more — and more choice — is always better. If you don’t want a candy bar, skip it. If you choose to eat it, that’s because doing so is better than ignoring it. This is what economists refer to as revealed preference; in this Panglossian view, whatever choice you make must be the best one, given the information and incentives you have. But that’s not how many of us actually behave. Behavioral economists recognize that we’re shaped by the environments around us and that we can be nudged into better behavior. COOs who want to increase the uptake of employee benefit plans or improve performance on a particular metric should take note. You may find simple ways to change the environment to improve your decisions and those of others around you.