Behavioural economics

Our Behavioural Economics team uses scientific evidence of the 'predictable irrationalities' in human decision-making and behaviour to solve pressing social and economic problems.

The Challenge

Human beings don't always make rational decisions

Behavioural economics is the science of human decision-making. It is about all the ways in which the behaviour of human beings deviates from what we think they should have done, if only they were:

  • reacting 'sensibly' to incoming information
  • 'objectively' weighing costs and benefits
  • responding 'appropriately' to incentives
  • 'rationally' pursuing their interests.

There are a variety of factors that influence human behaviour. © iStock

The fact is that human beings rarely make decisions in this way. That is why – despite a wealth of education, and strong material incentives – people are often unmoved (even moved in the wrong direction) by seemingly compelling information campaigns. They continue to waste resources even with the best of intentions and regularly fail to comply with requirements, despite financial penalties and sanctions.

Behavioural economics makes sense of all of this. We seek to understand how, when and why people's behaviour deviates from both:

  • their own values and intentions
  • their objective material interests (at least as traditional economists would understand them).

Our Response

Understanding 'predictable irrationality'

Fortunately for those wanting to design effective public policy, programs and campaigns, these deviations from 'rationality' are usually not chaotic or idiosyncratic. Rather, people everywhere are prone to certain biases and oddities in the way they process and react to information and context.

Once we understand this 'predictable irrationality' in human behaviour, it is a simple matter to take these odd – but remarkably consistent – propensities, and actually use them to induce real behaviour change. We turn barriers into footholds and stepping stones.

Inducing real behaviour change is usually more straightforward, and less costly, than typically imagined. It nearly always starts with motivation rather than information.

CSIRO's Behavioural Economics team works with organisations that have identified behavioural issues that are impacting their business, such as non-compliance, inefficiencies and waste. We design and test the efficacy of alternative solutions to those problems that are viable, cost-effective and readily mass-scalable.

In this way, the team uses scientific evidence to solve pressing social and economic problems. Between us, we draw on a wealth of expertise across diverse disciplines – predominantly psychology, economics and political science – effectively integrating insights from all in pursuit of high-impact, cost effective and durable solutions. The ultimate goal? A more efficient, productive and sustainable society.


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