What Chipotle Can Teach You To Get Ahead In Your Career: Behavioral Economics
If you enjoy eating at Chipotle, a psychological bias is influencing how much you like it. All because Chipotle lets YOU choose the items and play a role in the creation of your food.
Behavioral economist, Dan Ariely, calls this the IKEA Effect .
We subconsciously respond more favorably to something we have co-created. Like the final assembly of our IKEA furniture or, in this case, your Chipotle burrito.
Somewhat related is the endowment effect which causes us to overvalue things merely because we own them.
Behavioral economics will provide you many such examples that can be extrapolated to your benefit at work. When making economic decisions, people do not always behave in a rational manner as is assumed by classical economics. We are not always able to assess the probability of certain outcomes and will often make choices that go against us depending on how things are framed.
At work, don’t go solo on projects with the aim of taking all the credit. Your co-workers will value your ideas and proposals more if they’ve contributed to them in a small way, specially during the final stages.
Loss aversion is another concept from behavioral economics that is useful to apply. First identified by Amos Tversky and Daniel Kahneman, this is the tendency that humans have for reacting twice as much to losses than to gains . The thought of losing $500 will cause you twice the amount anxiety than the pleasure of gaining $500.
Thus, we tend to turn down opportunities that are quite good for us (new jobs, additional responsibilities). We overemphasize the negatives and allow them to drive our emotions towards rejecting these promising possibilities.
When weighing pros and cons, remember to correct for this bias and assign more weight to possible gains.
If you are interested in additional ideas, these two books are highly informative on the general topic of social psychology and behavioral economics.
Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein, Penguin Group, New York, NY 2009
The Upside of Irrationality: The Unexpected Benefits of Defying Logic by Dan Ariely, HarperCollins, New York, NY 2009.
Lastly, if you want to improve your persuasion skills to influence better and get ahead at work, this reading list will help you do exactly that:
- Norton, M.; Mochon, D.; Ariely, D. “The IKEA Effect: When Labor Leads to Love” Journal of Consumer Psychology, 2012, 22 (3), 453-460.
- Kahneman, D.; Tversky, A. “Prospect Theory: An Analysis of Decision Under Risk” Econometrica, 1979, 47 (4), 263-291.
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Keywords: #CareerAdvice #BehavioralEconomics #SocialPsychology #DanAriely #DanielKahneman #PersonalDevelopment