Why do we make the decisions we make?
Cognitive biases in economic decision-making 11 May 2021 In the fields of economics and business, decision-making is key. How do consumers choose which item to purchase or which business to patronise? How do those working in the financial markets decide whether they think a given stock will go up or down in value? Sometimes our behaviour in these areas can appear irrational - perhaps a subscription trap has been sprung and caught us or we will oppose wealth redistribution despite being low on the income scale. Behind most of the decisions we take in these areas there are cognitive biases at work, leading us in one direction or another. It is in this field, on the border of economics and psychology, that UvA researcher Frieder Neunhoeffer works. Neunhoeffer will defend his doctoral thesis on 20 May at the University of Amsterdam. One of Neunhoeffer's central findings relates to the choices consumers make when faced with subscription options of differing duration. Many subscription offers we see, whether for a gym or for access to a given app or website, will be presented with options of varying durations, often with a longer-term subscription involving a 'discount' compared to a shorter term one: one month for ¤1, but six months for ¤5, for example.
