Behavio(u)ral Economics and Telecommunications

The telco is getting personal.  Finally.

Every time I walk through Tesco‘s, I get angry.  Maybe it’s because I’m a numbers guy, but I hate when they have a chocolate bar for a buck one week, and the following week it’s two for the price of one, at $1.10.  It’s clearly not free.  And Coca-cola, so productized you could probably buy ten cokes for different prices in one store.  Two bottles for the price of one.  a twin pack “economy rate”.  A slab of cans.  A six pack of small bottles.  And what freaks me out is where they put these things.  How many times to you go to the biscuit aisle and find stray packets of bourbon cremes from the promotions stack near the cured ham counter, dumped on top of the custard cremes when a wandering shopper realises that the offer ain’t all it’s cracked up to be when they analyse the other offers that were not beside the bourbon cremes (near the cured ham).  Humbug.

Of course, what this shows is that retailer have thought about this stuff.  They don’t stack shelves in order of price, because like on any good wine list in a restaurant, no one buys the most expensive stuff, and few people buy the cheapest stuff, but many buy the second cheapest option.  This is what academics call behavioural economics, an understanding that the psychology of buying is important in considering how to structure offers, and – generally speaking – how to price stuff.

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Making sense of $787 Billion

I have been a fan of Edward Tufte, for quite a while starting with his book “The Visual Display of Quantitative Information” first published way back in 1983. His ability to cut through the clutter and ensure integrity in graphical representations is very welcome in these days of over enthusiastic interpretations of data and information.

One of the examples he often cites (and sells on his website) is Charles Joseph Minard’s map of Napoleon’s losses in his Russian campaign of 1812.  I have it on the wall in my office as inspiration.

MinardMap

So it was with great pleasure that I read yesterday that on March 5, he was appointed by President Obama to a panel to advise the Recovery Accountability and Transparency Board, which monitors the way the $787 billion in the stimulus package is being spent. According to the NY Times he is already having an effect, bringing clarity and common sense to the issue. To quote:

“Political practice today too often skips right by evidence,” he said by e-mail. “When I listen to True Believers (left or right) talk about the problems that governments are seeking to solve, I keep muttering to myself, ‘How boring, it’s more complicated than that.’ And those who best know that it’s more complicated than that are public servants.”

There are excellent examples of other infographics at the Smashing Magazine site and the visual complexity site (example below).

The remotest place on earth

The Remotest Place on Earth