Reflecting the impact of customer review sites, new research shows that independent hotels are adjusting their advertising spending based on reader reviews — the better the reviews, the less they spend.
A groundbreaking 2004 journal article showed how behavioural economics could explain self-defeating retirement savings decisions made by employees. It was an early example of the power of behavioural economics over standard economic theory by the ‘father of behavioural economics’.
Does variety in activities make us happy? New research shows that time makes the difference. Variety is welcomed over the course of a day or for longer periods, when we’re trying to stay stimulated; however, it’s unwelcomed within short periods such as an hour, when multiple activities feel unproductive.
Customers tend to remember the end of an experience (for example, the last days of a vacation) and also tend to become used to a level of experience (for example, the view from their hotel room). Keeping these two psychological tendencies in mind, companies can structure a customer service encounter that leaves satisfied customers with memories of a great experience — and have them coming back for more.
Investor sentiment has a, sometimes erroneous, effect on stock market valuations. There is evidence that higher risk stocks become overpriced in periods of optimistic sentiment and undervalued when sentiment is pessimistic. Optimism attracts equity investment by unsophisticated, overconfident, retail investors in risky opportunities while such traders are less active in pessimistic periods. Thus sentiment can wrongly influence company share prices, and both investors and CFOs planning financial strategy should be wary.
Faced with workplace conflicts, attending to how the different parties express themselves — presenting their positions clearly, calmly and honestly or using aggressive language and loud voices, is just one example — can be the key in reaching a resolution.
Do you encourage a culture of competition in your organization in order to motivate your employees? This Idea shows that doing so may also promote corruption and unethical behaviour. In the face of local competition, firms operating in the New York air-pollution testing industry were found to be more likely to behave unethically. Read on to find out the implications of this finding for your organization.
When putting together an advertisement campaign, how many positive aspects of the product should you include? The temptation is to put in as many as possible, but according to this Idea, three is the optimal amount. Add more and you risk raising suspicions in your customers about the authenticity of all of the claims.
Since the early 2000s, Spanish retailer Zara (founded 1975) has taken the fashion industry by storm, with its ability to react to rapid changes in market conditions and keep its stock fresh and up-to-date, once claiming it needs only two weeks (as compared to up to six months traditionally needed by rivals) to produce and distribute new stock. According to this Idea, other retailers can achieve similar success by optimizing three key operation management decisions: design, sourcing and distribution.
How can personality affect your status within a team? Previously, it has often been thought that extraverts are at an advantage through their confident mannerisms, giving the impression that they can get a lot done. But this Idea finds that over time, extraverts tend to disappoint and their more neurotic counterparts end up surpassing expectations and, ultimately, raising their status.
