Development and Design - Module 2

Behavioral Economics

Behavioral Economics are reptilian brain defaults that make humans fun to design for.
What are you doing to use this in your software?

If you don't design for the emotional needs of your users, they will design their own bad emotions around your product or service. Good emotions are the grease for human decision making.
The Designatic


In this 2006 video, Dan introduces you to the topic of Human Behavioral Economics. Pay attention to the concepts of loss aversion around "The Economist" website example around minute 12. Stay for the next section about the decision-making randomness of even well-trained professionals, in this case, even Doctors are susceptible. Please note the examples given around how a throwaway "non-choices" can push different groups of people too very different decisions.

However, the most important question is?
"Do you want to go bar hopping with me later?"


Eager Sellers and Stony Buyers: Understanding the Psychology of New-Product Adoption. Eager Sellers and Stony Buyers: Understanding the Psychology of New-Product Adoption.

Background Commentary

Behavioral Economics is the study of the things that make us human, and are inherent things, that we don’t control, that millions of years of evolution make us who we are as humans. These are traits we are generally born with and exist in all of us. These inherent behaviors can be used by us and others for good and bad. It is important to be aware of behavioral economics when developing software to ensure we are being ethical in its use within our programs. For as long as time has existed, we humans have strived for three things, status, recognition, and inclusion. Behavioral Economics gets us to some of the foundations that manifest as those three things.

Important Definitions

Confirmation Bias
Using new information to confirm one’s existing theories, beliefs, and behaviors. It is very easy as well trained and meaning computer software programming professionals to assume that all of the users of our software look like, think like, and are like us. We also simply assume they are willing to spend the same amount of time we have in becoming effective users of the computer tools we take for granted. Without going outside of our typical co-worker and early adopter bubble, we will miss the opportunities to learn about what our users need.

Endowment Effect
Given a coffee mug first, you are less likely to give it up for a chocolate bar. Given a chocolate bar, you are less likely to give it up for a coffee mug. Things in your possession are more valuable to you, and by having them in you possession you will overvalue their value by 2 to 14x depending on the research.

Loss Aversion & Reference-Dependent
are two of the theoretical explanations of the Endowment Effect. Losing something and fear of loss hurts or feels a lot worse than winning feels good.

I love college football, and when my two favorite teams are playing others, I ruminate over the loser, and will not enjoy the victory

Hindsight or Hindsight Bias
Convincing yourself, after the fact, that you had predicted, what would happen before it happened. This is especially present in successful outcomes, and thinking that “smarts” enabled you to succeed where others had fallen. It either discounts the work taken to get there, or a forgetting of the history of the events that got them to where that successful outcome occurred.

Fundamental Attribution Error
This concept attributes people’s choices and more strongly relates them to their personalities vs using the situation that the person found themselves in. In software development and delivery, the most passive aggressive form of this is “Works on my machine”.
Their are so many undercurrents in this statement including:

  • Why don’t you have a better machine?
  • Why aren’t you as smart as me?
  • Why are you bothering me, don’t you see I have more important things to do?
  • Why can’t you figure out why it doesn’t work?
  • Why won’t you work harder to figure out what isn’t working?

So many things attributed to their personal being, versus the challenge they are facing right then, which is that something is not working. It does not even have enough diagnostics to even tell the user what is broken or a next best action to resolve the issue. Think back to the Ten Heuristics Worksheet, and ask yourself, how many problems amongst those ten items are failing the user to ask for help.


None yet stay tuned.

More Reading/s

A list of many of the human behavioral economics definitions
Sorry, but most of the things you ‘choose’ are random

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