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Behavioral Economics and Technology Innovation: Using Choice Architecture to Build and Scale Products

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  • Craciun Maria Alexandra

    (Bucharest University of Economic Studies, Bucharest, Romania)

Abstract

With technology being a part of our everyday lives, there has never been a more critical time to dive deeper and understand what drives us to choose specific products. The effectiveness with which technology companies use behavioral economics principles, such as choice architecture, in product development can drive better outcomes both for the organisation and the customer. The use of behavioral economics has become increasingly popular in. recent years. By leveraging insights from behavioral economics, technology companies can create products that better align with users’ needs and preferences, and that are more likely to be adopted over time. This article critically reviews existing and emerging academic research, addressing three key areas: how behavioral economics appeared and its growth in the last five decades, behavioral economics in practice through the use of Choice Architecture, and how behavioral insights are currently applied in the design of technology products. In the present study, I have undertaken a review of existing literature and research studies by analysing and synthesising key points. The review was conducted by analysing and reading existing literature on the topic, including peer-reviewed journal articles, books and industry reports. Overall, this visionary paper provides a contribution to the field of technology product development, highlighting potential strategies of using behavioral economics to better design, build and scale products.

Suggested Citation

  • Craciun Maria Alexandra, 2023. "Behavioral Economics and Technology Innovation: Using Choice Architecture to Build and Scale Products," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 17(1), pages 904-913, July.
    • Handle: RePEc:vrs:poicbe:v:17:y:2023:i:1:p:904-913:n:1
    DOI: 10.2478/picbe-2023-0083
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    References listed on IDEAS

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    1. Robert J. Shiller, 2003. "From Efficient Markets Theory to Behavioral Finance," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 83-104, Winter.
    2. Richard H. Thaler, 2016. "Behavioral Economics: Past, Present, and Future," American Economic Review, American Economic Association, vol. 106(7), pages 1577-1600, July.
    3. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    4. Susan Athey & Armin Schmutzler, 1995. "Product and Process Flexibility in an Innovative Environment," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 557-574, Winter.
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