History of Behavioural Economics

For those you have read my thoughts on the use of Behavioural Economics as a method of optimising our approach to Performance Based Contracting (PBC) (see earlier posts on Is Your Contract Fun? and Designing Successful PBCs) I wanted to mention an article (From “Economic Man” to Behavioral Economics) from the Harvard Business Review (HBR) which provides a brief history on the rise of Behavioural Economics as a part of the wider field of Decision Making.  It also includes links to other interesting articles on this and similar topics of how we as humans make decisions.

I recommend you read this, and some of the other linked articles, and consider whether the Performance Management Framework in your PBC takes into account these factors as I believe that highly successful PBCs should skilfully use a contract’s Choice Architecture to nudge contractor behaviour by defining the consequences of their actions or omissions in the delivery of the required outcomes.

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