Sebastian Senlle y Matías Hirschmann,directors of the Program in Business Experimentation of the Universidad AustralThey gave a masterclass to about 100 people on behavioral science and how it applies to decision-making in a company.
Behavioral science studies how individuals feel, think, and act in order to understand what lies behind decision-making. This interdisciplinary field draws on various disciplines, including psychology, economics, sociology, and neuroscience.
According to this science, decision-making is not strictly rational, but is also affected by cognitive, emotional, psychological, cultural, and social biases . Behavioral science has become an academic field in its own right and is gaining significant traction in businesses and organizations.
More and more companies are hiring specialists dedicated to understanding and influencing how people make decisions, in order to optimize business indicators and objectives. Using behavioral science knowledge, experiments can be conducted to achieve goals such as increasing sales, improving Net Promoter Score (NPS), and increasing user retention, among many others.
Behavioral science is generating increasing demand for professionals as specialized teams are expanding within governments and NGOs worldwide. These teams can be used for the common good or to improve a company's business objectives.
The premise that human beings are solely rational is not true. Real life is much more complex; people don't always process and calculate all the options to decide on the best one. Behavioral science is based on the idea that two systems coexist simultaneously within human beings, influencing the decisions they make throughout the day.
More than 90% of the time, humans make decisions based on System 1, understanding this decision-making as an irrational form that does not require much attention and is based on biases.
The irrational subject model is based on the assumption that decisions made in System 1 are entirely predictable and that humans don't always seek to maximize time and resources, but rather decide automatically. Biases change depending on the context, and by modifying this context, a decision can be altered or induced without eliminating other options. This is what decision architects focus on, working on the nudge, a term used to refer to the "push" that can be given to the user to steer the decision in a particular direction.
Cognitive biases that shape decision-making function as "mental shortcuts." These allow us to react quickly to modify our own decision, or that of a client, user, or citizen, depending on the context in which behavioral science is applied.
One of the most studied biases is the Peak End Rule: it explains that the ending of an experience has a greater impact than the average experience. This means that special attention must be paid to the conclusion of a customer's or user's experience. "The final 5 minutes of a movie have much more weight in memory than any other 5-minute block."
How behavioral science is linked to experiments
Experimentation in organizations allows for small changes in decision architecture to alter customer behavior.
The experiment is a controlled test designed to understand whether customer behavior changes when a variable is altered. It applies the scientific method within an organizational context. The premise "Stop guessing, start testing" leads to data-driven decisions and a clear understanding of what works best. Personal impressions and past data should be set aside to reduce risks and achieve better results. Ultimately, this fosters more creative and evolving organizations.
From the Faculty of Engineering of the Universidad Austral the dictates Program in Business Experimentation, where the different cognitive biases are addressed and explored in depth to learn how to experiment and improve results.
We invite you to learn more about the program on our website: Business Experimentation Program . Classes begin in September and are taught online.
