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Organizations should know their people: A behavioral economics approach

Author

Listed:
  • Antonio M. Espin

    (Department of Economics, Middlesex University Business School, London, United Kingdom)

  • Francisco Reyes-Pereira

    (Scientific & Operative Department, Behave4, Granada, Spain)

  • Luis F. Ciria

    (Brain, Mind & Behavior Research Center, University of Granada, Spain)

Abstract

Public and private organizations are increasingly applying behavioral economics methods to a variety of issues such as mechanism design and incentive architecture. However, there has been little focus on how experimental tools used in behavioral economics can help companies learn more about their (current or prospective) workforce and, more specifically, about their employees' tastes and inclinations. This has important implications for broader organizational performance since some designs/incentives are likely to affect only individuals with a particular disposition (e.g. risk averse or fairness oriented) but not others, or can even have opposite effects on individuals with different sets of preferences. In this commentary, we point out a number of promising avenues for the application of a behavioral economics lens to understand and manage people within organizations. A comprehensive case study is also provided.

Suggested Citation

  • Antonio M. Espin & Francisco Reyes-Pereira & Luis F. Ciria, 2017. "Organizations should know their people: A behavioral economics approach," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 1(S), pages 41-48, November.
    • Handle: RePEc:beh:jbepv1:v:1:y:2017:i:s:p:41-48
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