Okay sports fans, here's my explanation of Behavioral Economics...RE: @mikeandmike

Okay sports fans, I was listening to Mike and Mike in the Morning on ESPN Radio. Last night the Tampa Bay Devil Rays had a chance to clinch a playoff berth. Now, they didn't win, but that's another story. For these purposes, it's important to know that a couple of millionaire athletes (David Price and Evan Longoria...not to be confused with actress Eva) were "embarrassed" because even for such a crucial game, they couldn't get more than 10-15 thousand fans out. To quote Longoria, "For us to play 155 games and go a full season of playing really good baseball, it's kind of like, what else do we have to do to draw fans into this place? It's actually embarrassing for us."

As I listened to Mike (Golic) and Mike (Greenberg) in a heated debate about whether the athletes were justified in their rants, it was clear to me that this debate can only be solved with behavioral economics. You see, Golic's debate was purely logical. His feeling was that no fans who would not otherwise purchase tickets would change their minds and purchase tickets, as a result of the players calling them out. Therefore, it was nonsensical for them to expend the effort in criticizing those fans. He repeatedly said, those millionaires have no right telling those fans how to spend their money. We can all relate to those sentiments (even though millionaire marketing execs spend their whole lives convincing middle-class citizens how to spend their money). Meanwhile, Greenberg felt the athletes had every right to voice their opinions. To Greenie, those fans should be a part of the culture. They play a role in the success of their team and should step up and do their part by attending. Greenberg's argument was playing to the emotional attachment of those fans. In that sense, Greenberg wins the debate.

You see, current research shows that of all the decisions consumers make, 70% are based on EMOTIONAL factors, while only 30% are based on RATIONAL elements. While Greenie wins the debate for his premise that players need to play more to their fans' emotional attachment, he fails in recognizing that the players' statements also carry the potential to have an adverse impact on emotional attachment. In fact, it is easier to erode the emotional attachment of your customers than it is to create it.

So I'll let you be the judge... what impact would the players' statements have had on you as a fan? Would you be more or less likely to attend the next home game? If your answer is MORE likely, then Greenie wins the debate. If your answer is LESS likely, then the award goes to Golic (even though he based his argument on the wrong premise).

Behavioral economics can best be defined as the role human nature plays in just about everything. Are your models for understanding customer and employee behavior rooted in behavioral economics? Or are they still limited to the old rational, neoclassical economics?

 

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