Behavioural Science is a rapidly expanding field and everyday new research is being developed in academia, tested and implemented by practitioners in financial organisation, development agencies, government ‘nudge’ units and more. This interview is part of a series interviewing prominent people in the field. And in today's interview the answers are provided by Matt Johnson. Matt is a professor, researcher, and writer specializing in the application of neuroscience and psychology to the business world.. His focus is ultimately about bridging the gap between science and business, and to this end he works across several fields including behavioral economics, consumer neuroscience, and experiential marketing. A contributor to major news outlets including Forbes, Entrepreneur, Business Insider, and VICE, he regularly provides expert opinion and thought leadership on a range of topics related to the human side of business. He advises both start-ups and large brands in his native San Francisco, and has worked with Nike as an expert-in-residence in Portland, Oregon. He is the co-founder of the Neuromarketing Blog, PopNeuro.
Who or what got you into Behavioural Economics?
There were two major forces. The first, is that I had the good fortune of doing my PhD in the Psychology Department at Princeton, which has a storied history within behavioral economics. While I had taken courses in judgment and decision making as a psychology undergrad, this really first exposure to the academic literature of behavioral economics. The impact of his ideas on the department was palpable throughout my experience there, and his ideas seemed to always be on the tips of everyone’s tongues.
The second came a few years later. Towards the end of my PhD, I became very interested in business consulting work. I was attracted to the prospect of applying analytical problem solving in order to have a direct and immediate impact. I ended up doing an internship with a consulting firm during my senior year, and then after graduation, working as a business consultant in Shanghai, China for about 18 months. Working in consulting right after graduation was an incredible opportunity to see the rich, unexplored connections between psychology and business, which further strengthened my interest in the field.
What is the accomplishment you are proudest of as a behavioural economist?
In general, I’m very passionate about the communication of scientific findings to the general, lay audience. Science education is extremely important, and this is especially the case for behavioral economics, which can inform the decisions which people make every single day.
For this reason, above and beyond any research I’ve done, I’m most proud of founding the Neuromarketing Blog, PopNeuro. This blog is a reflection of my focus within behavioral economics, which is exploring the connections between neuroscience and marketing. This blog dives into the strange, fascinating world of consumer science through the lens of current events, and popular culture. Anything from the psychology of KPop fans and tribal branding, to what Kanye West can teach us about impulsive shopping.
If you weren’t a behavioural economist, what would you be doing?
I think I would probably be a screenplay writer. I love movies, and I love writing, so it’s really a perfect marriage of those two interests. Before I started writing seriously about consumer science and behavioral economics, I was very into screenplay writing and even wrote a few feature-length screenplays. Naturally, none became movies (or anywhere near movies), but they were a lot of fun to write.
It’s also a very fun medium of writing to learn about. While there are conventions and certain formulas, you also have the freedom to break these in creative ways. Would love to get back into someday, we’ll see!
How do you apply behavioural economics in your personal life?
For me, one of the biggest, practical insights from behavioral science is on the Law of Least Mental Effort: Thinking is hard, and (all things being equal), we try and avoid exerting mental energy as much as possible. Given this, its possible to reach the same desirable outcomes over a long stretch of time by making a difficult decision once, instead of repeatedly. My favorite example (which I think comes from Annie Duke in ‘Thinking in Bets’), is about ice cream. Instead of having to exert the mental energy to constantly resist the ice cream in the fridge, make that one difficult decision while you’re at the shopping mall to not bring ice cream home with you. Planning ahead makes it much easier to avoid these constant, difficult decisions. Huge implications for impulse control, as well.
I think another major application for everyday life is in noticing how much anchors shape your perception. Everything is relative to some benchmark, and these distort our understanding of everything from the psychological value of money, to quantitative estimates, to our own sense of happiness and fulfillment.
With all your experience, what skills would you say are needed to be a behavioural economist? Are there any recommendations you would make?
I think it really depends on what area of behavioral economics the person if working in, and whether they are engaged in research, or as a practitioner.
For practitioners, there are a few things I think are especially important. Beyond understanding the academic literature (which has grown pretty vast in recent years), I think it’s important to develop strong experimentation skills. Specific applications, especially in novel scenarios, should be tested. It’s important to understand the general principles of course, but in the real world, things are very messy. Hypotheses should be informed by the existing literature but whenever possible fresh data should be brought to bear on it.
Beyond this, I think it’s also worthwhile to develop a specialization and expertise in specific industry or problem type. The applications of behavioral economics are extremely broad - anywhere from public policy, to sports, to investment behavior. Each field has its own unique culture, and its own unique variables worth considering. Certain types of behavioral science may be plug and play, but doing it well requires understanding needs which are unique to that industry.
How do you think behavioural economics will develop (in the next 10 years)?
I think it will continue to grow, and as it does, it will become more integrated with traditional subfields of psychology. I think we’ve already seen to a certain extent already with how social psychology has become intertwined into behavioral economics. The early, pioneering work on BE primarily looked at decision making of the individual, but more recent trends has considered social psychological variables such as social identity, affiliation, and hierarchy. These explorations have given the field another dimension and have unearthed some interesting nuances about real world economic decision making. I think this general interdisciplinary trend will continue into realms such as developmental psychology.
I also think that neuroscientific tools will play a larger role as well, as has been the trend in psychology over the past 20 years. This has already taken hold already (the niche field of neuroeconomics has been around for over a decade), but I would predict this will continue. These neuroimaging techniques are especially relevant for the study of behavioral economics since so much of the decision making process is implicit and beyond behavioral measure or introspection.
Lastly, I think that behavioral economics will increasingly be brought to help understand (and improve) our relationship with technology. Technological innovation has created new ways for brands to interact with consumers (e.g. personalized marketing), which present regulatory and ethical challenges. Behavioral economics will play an increasingly important role in both how these technologies are developed and how we interact with them.
Which other behavioural economist would you love to read an interview by?
I would love to read an interview by Patricia Churchland, who has pioneered the field of neurophilosophy. While she wouldn’t easily be classified into a behavioral economist, she has done some fascinating work on big questions related to choice, unconscious processing, free will, and moral reasoning. Reading about her perspective on behavioral economics specifically would be fascinating.
Thank you so much for taking the time to write down these amazing answers Matt! Coming from a neuroscientific background you've provided us with a lot to think about!
As I said before, this interview is part of a larger series which can also be found here on the blog. Make sure you don't miss any of those, nor any of the upcoming interviews! Keep your eye on Money on the Mind!