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Any research on a concept of 'empathetic preferences' used in economics?

Any research on a concept of 'empathetic preferences' used in economics?



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Some economists/political scientists/philosophers (it's sometimes hard to classify them) have used in their theories a concept of "empathetic preferences", also known as "extended sympathy preferences" - by which they they understand a preference of being a person X under a circumstance p than a person Y under a circumstance q, i.e. a counterfactual comparison of two different persons under two different situations. One needs to both empathise with two different persons to take into account their different preferences and create his own preference, hence the name empathetic preferences. A problematic concept to say at least, but nothing really important for those who used it (Kenneth Arrow, Patrick Suppes). But Ken Binmore, quite a known chap in math, game theory and economics, devised a whole theory explaining humans' natural sense of fairness in which empathetic preferences play a crucial role, grounding interpersonal comparisons of utility (technical exposition in "Game Theory and the Social Contract" from 1994, more readable in "Natural Justice from 2005").

Has anything remotely relevant been studied by psychologists/cognitive scientists? Binmore is claiming that empathetic preferences are very similiar to empathy and basically "every properly socialized human being has them". He also claims that there are tons of research on empathy that support his view, without citing anything relevant. The problem is that he is not "philosophising" them, conjuring them out of nothing like some political philosophers - he claims that this is how human beings work.

Binmore's example of empathetic preference - if we know that Eve likes apples and Adam does not mind being naked, we might think "I would rather be Eve eating an apple than Adam wearing a fig leaf".

For me this seems utterly implausible, and making such comparison is just impossible. Also, as we are never different persons, why would we be capable of doing that? But it's not like he was some guy on a University of Woolamaloo writing things that only his PhD students read, he's a world-class economist, claiming empirical support of his work, and I'm curious if there is any.


Economics, psychology, policy

Update: Here is the latest version of the Nudge Database pdf

This is a list of empirical ‘nudges’ and their sources with a particular emphasis on those sourced from academic papers. It will be updated regularly. I created it because while there are many interesting papers and websites documenting nudges, there is a lamentable absence of any searchable, central database. If you know of some nudges that I have not included, please let me know by email or Twitter. The nudges listed here are intended as a quick reference: if you are looking for sample sizes and p-values you need to check the original paper. Where possible I have provided links to freely accessible versions of the papers.
Part I || Part II || Part III || Part IV || Part V || Part VI || Part VII || Part VIII || Part IX || Part X

1.
N udge: Using defaults in organ donation to increase compliance rates. Those countries where people are required to opt-out of organ donation report significantly higher consent than those with an opt-in policy. Possibly the most famous nudge, certainly the most eye-catching.

Tags : Defaults / Organ donation / opt-in opt-out

Source: Johnson & Goldstein (2003), ‘Do Defaults Save Lives?', Science, Vol. 302


2.
Nudge: The authors sought to prime honesty by asking people to sign at the start of a form rather than the end when reporting how many miles they had driven on their car for insurance purposes.

Tags : priming / salience / signature / honesty


3.
Nudge: General Electric wanted its employees to stop smoking. They submitted to a Randomized Control Trial where the treatment group received cash incentives to quit. The control group received no incentives. Quitting for 6 months earned you $250, quitting for 12 months $400.

The treatment group had 3 times the success rate of the control (14.7% gave up smoking vs 5%), even after financial incentives were discontinued after 12 months (9.4% vs 3.6%). On the strength of this finding, GE now does this for their 152,000 employees.

Tags : Smoking / financial incentives / health


4.
Nudge: The ‘Save More Tomorrow’ [SMarT] program used defaults to increase employees’ savings rates by automatically increasing the % of their wage devoted to saving. Average saving rates for SMarT program participants increased from 3.5% to 13.6% over the course of 40 months. This is one of the most famous nudges.
Tags : defaults / saving / save more tomorrow

Source: Benartzi & Thaler (2004), ‘Save More Tomorrow’, Journal of Political Economy.


5.
Nudge: The Behavioral Insights Team in the U.K. used social normative messages to increase tax compliance in 2011. The control group received standard tax letters. The treatment groups received the letters with an added normative messages. The difference in compliance rates between the control and the most effective treatment group was 15 percentage points.


Tags : social norms / tax compliance / Behavioural Insights Team


6.
Nudge: A Randomized Controlled Trial using social normative messages to increase publican license renewals in Ireland. Similar to the work of the BIT, the control group received a standard renewal letter. The treatment group received a simplified letter which included a social normative message. After 1 year the treatment group had 35.5% renewal rates, the control had 29.4%.

Tags : social norms / compliance / pub licenses

Source: Walsh, K. [2012, unpublished]

Personalization in policy is an interesting area. Cass Sunstein, co-author of 'Nudge' believes that "personalized defaults are the way of the future". Sunstein says " it is increasingly possible for private and public institutions to produce highly personalized default rules, which reduce the problems with one-size-fits-all defaults. In principle, personalized default rules could be designed for every individual in the relevant population."
Tags : salience / tax compliance / Behavioural Insights Team

Tags : weight loss / regret aversion / salience / lotteries / health

The treatment group had a 1% chance of winning $100 contingent upon taking their pills correctly. The control group did not have any incentives to take their pills correctly beyond the threat of dying. Adherance in the treatment group was almost 100% compared to 80% in the control [though with the caveat that the sample size is very small, n=10] . Findings like this support the argument that more should be spent on behavioral research in health-care. Dr. David Halpern of the Behavioral Insights Team has noted that in Lord Darzi’s 2008 report on the NHS behavioral research currently receives less than 0.5% of medical research spending in the U.K.

Tags : salience / health / lotteries / adherance / financial incentive


10.
Nudge: The Behavioural Insights Team ran a 6 month Randomized Controlled Trial with Jobcentre Plus in Essex to test the impact of several changes to the way the centre operates, specifically through commitment devices & emphasis on building psychological resilence. They found job seekers in the treatment group 15-20% more likely to be off benefits 13 weeks after signing on.

Tags : job-seekers / commitment / behavioral insights team


11.
Nudge: The American electricity company Opower use social normative messages comparing a person’s electricity usage to that of their neighbours to reduce electricity consumption. This is an area with interesting diversity of findings. Schultz et al (2007) found the use of normative messages with injunctive emoticons effective at reducing consumption. Allcott (2011) estimates this program reduces consumption by around 2% for Opower’s customers.

Tags : electricity usage / social norms / Opower / energy efficiency


Discussion and Conclusions

Personality traits are defined as relatively enduring patterns of people’s thoughts, beliefs, and behaviors (i.e., thoughts and beliefs are considered a fundamental part of an individual’s personality from this perspective) (32). This view contrasts with the prevalent assumption in economics, where preferences are viewed as an individual characteristic, while beliefs are a property of the equilibrium and are often assumed to be formed rationally on the basis of the available evidence. This means that there should be no systematic relationship between what people believe about others’ behavior and their own preferences. We should thus not expect a systematic correlation between individuals’ social preferences and individuals’ beliefs about their partner’s behavior in a trust game.

Here, we used well-validated self-report measures from personality psychology to identify an antisocial personality profile that shows a systematic correlation between the beliefs of antisocial individuals and their behaviors. Moreover, no current theory of social preferences (in which pure selfishness is a special case) seems to be able to account for the belief–behavior patterns of the antisocial individuals. Antisocial individuals have high positive loadings on Machiavellianism and high negative loadings on empathy, trustworthiness, and agreeableness. Antisocial investors in the NPT believe that their agents’ will be considerably less likely to honor their trust compared with investors with low antisociality. Accordingly, highly antisocial investors also exhibit less behavioral trust than prosocial investors. Interestingly, however, if investors can punish their agents, highly antisocial investors respond to the punishment option with their beliefs and transfers much more strongly than prosocial investors: they become much more optimistic about their agents’ back transfers, and they exhibit much more behavioral trust relative to a situation without a punishment option.

Why do antisocial investors respond so differently to the existence of a punishment option? A plausible reason is that they take their own behavioral response to the punishment option into account and assume that other individuals—their agents—respond like they do. We observe, in fact, that antisocial individuals in the role of agents respond much more strongly to the punishment option by increasing their back transfers relative to a situation without punishment. Thus, when antisocial investors put themselves into their agents’ shoes and take their own likely response to the punishment option into account when predicting their agents’ back transfers, they should become more optimistic, and they have reason to show more behavioral trust.

However, why do antisocial agents respond so strongly to the presence of a punishment option? Again, a plausible reason is that antisocial agents may introspect into how they would punish agents if they were in the role of an investor who could punish. In fact, antisocial investors indeed punish agents who provide low back transfers much more severely compared with more prosocial investors, and they do so not in a “hot” state after their trust has actually been betrayed but in a “cold” state, in which they assign their sanctions to each possible back-transfer level ex ante (i.e., before they know their agent’s back transfer). Therefore, if antisocial agents project their own harsh sanction—if they were an investor—to their actual investors, it makes sense for them to respond more strongly to the punishment option by raising their back transfers. The overall picture that emerges is thus consistent with the idea that highly antisocial individuals believe that their partners in the trust game will behave similarly to how they themselves would in the other role.

No economic theory of social preferences predicts such a correlation between what antisocial individuals believe and the preferences that antisocial individuals reveal in the NPT and the PT. Note that a clean identification of behavioral preferences is only possible for agents in the NPT and for the investors at the punishment stage of the PT, because the respective players make the last move in the game in these situations, and their behavior, therefore, does not depend on beliefs about their opponents’ responses but only on their preferences.

These behavioral data clearly show that antisocial individuals are not simply selfish, because they still show significantly positive back transfers if the investor transfers CHF 10. They spend a lot of resources on the sanctioning of those agents who make low back transfers, although they derive no pecuniary benefit from this. Antisocial individuals are less trustworthy and less willing to honor others’ trust, but they are not complete defectors. These data also imply that antisocial individuals do not simply have envious or spiteful preferences in the sense that they unconditionally value the other players’ payoffs negatively, because such preferences would imply unconditional back transfers of zero in the trust game without punishment, and they would be hard to reconcile with the fact that antisocial individuals condition their sanctions on the agents’ back-transfer levels. Individuals who are simply envious or spiteful would always—regardless of the agents’ back transfer—exploit the opportunity to reduce others’ material payoffs. The behavioral preferences revealed by the agents in the NPT are consistent with weak preferences for reciprocity (20, 23, 24) or a weak aversion against advantageous inequality (21). In contrast, the behavior of antisocial investors at the punishment stage is consistent with a strong preference for negative reciprocity (20, 23, 24) or a strong aversion against disadvantageous inequality (21). However, neither theories of reciprocity nor the theory of inequity aversion explain why these antisocial individuals seem to have quite different beliefs compared with less antisocial individuals. Nevertheless, their belief–behavior pattern is coherent and makes sense if these individuals assume that most others are similar to themselves (i.e., exhibit a low willingness to honor others’ trust but a high willingness to punish others if their trust is not honored). In fact, this process of simulating one’s own thoughts, feelings, and intentions within a hypothetical scenario to make predictions about others’ behavior is referred to as self-projection (33), and there is considerable support from social neuroeconomics that investors utilize the neural processes that enable self-projection when making decisions in trust and similar games (34 ⇓ –36).

The more general lesson from our research is perhaps that beliefs may be a property of the individual as much as preferences are and that certain belief–behavior patterns may be associated with certain personality characteristics. The psychology of personality traits may thus help in constraining the assumptions that one can or should make about what people believe about others. In addition, our research shows that variations in personality can be as important as variations in “the situation” and that important interactions between personality characteristics and situational features exist (2, 19, 25 ⇓ –27).


Models of Resilience

There are three general classes of resilience models — compensatory, protective, and challenge — that explain how resilience factors operate to alter the trajectory from risk exposure to negative outcome (Fergus and Zimmerman, 2005).

A compensatory model best explains a situation where a resilience factor counteracts or operates in an opposite direction to a risk factor. The resilience factor has a direct effect on the outcome, one that is independent of the effect of the risk factor. In CIET’s ACYRN-East study, for example, alcohol abstinence or moderation is compensatory in the sense that it is directly and independently associated with lower risk for youth suicide (see Andersson and Ledogar, 2008).

In the protective model, assets or resources moderate or reduce the effects of a risk on a negative outcome. Protective factors may operate in several ways to influence outcomes. They may help to neutralize the effects of risks they may weaken, but not completely remove them or they may enhance the positive effect of another promotive factor in producing an outcome. In the ACYRN-East study, being drug-free, though not directly associated with lower suicide risk, is associated with lower alcohol use and thus is protective in the sense that it enhances the latter’s anti-suicide potential.

A third model of resilience is the challenge model. In this model, the association between a risk factor and an outcome is 𠇌urvilinear”: exposures to both low and high levels of a risk factor are associated with negative outcomes, but moderate levels of the risk are related to less negative (or positive) outcomes. Adolescents exposed to moderate levels of risk, for example, may be confronted with enough of the risk factor to learn how to overcome it but are not exposed to so much of it that overcoming it is impossible. Many challenge models require longitudinal data. Researchers use them, for example, to track how repeated exposure to challenges prepares adolescents for dealing with adversities in the future.

An interesting application of the challenge model of resilience is provided by Richardson (2002) for whom “resilient reintegration” is the most positive outcome of a process involving an individual’s reactions to some stress or adversity. Resilient reintegration occurs when one experiences some insight or growth as a result of disruption. It results in the identification or strengthening of resilient qualities. According to the underlying theory, individuals are genetically predisposed with more potential than they are conscious of. The 𠇍isruptive resiliency process” is a means to access this potential.

Accentuating the Positive

For Richardson, research identified with this process of resilient reintegration constituted a second wave in what he called the metatheory of resiliency. The first wave was mainly descriptive it understood resilience to be a set of strengths or assets that helped people survive adversity. The second wave, resilient reintegration, was more focused on helping people to achieve “growth or adaptation through disruption.” In a third “postmodern” wave of resilience theory, the concept refers to “the force within everyone that drives them to seek self-actualization, altruism, wisdom and harmony with a spiritual source of strength” (Richardson, 2002, p. 313).

This third wave posited by Richardson has its counterpart in the educational field via the Health Realization Model posited by Mills and Schuford (2003) for whom a healthy, resilient outlook is “hard wired in us as human beings, just as the ability to breathe or ingest food or have our heart beat to pump blood are all innate, hard wired functions” (p. 7). For Mills and Schuford, the task of good educators is to empower youth to regain their natural well-being, self-motivation and healthy thinking. 1

This positive perspective had an influence on the thinking of Native American educators such as Iris HeavyRunner who, referring to Mills in a 1997 paper, called resilience “our innate capacity for well-being” (HeavyRunner and Morris, 1997, p. 2). Later she wrote:

Resilience is the natural, human capacity to navigate life well. It is something every human being has — wisdom, common sense. It means coming to know how you think, who you are spiritually, where you come from, and where you are going. The key is learning how to utilize innate resilience, which is the birthright of every human being. It involves understanding our inner spirit and finding a sense of direction. (HeavyRunner and Marshall, 2003, p. 14)


The Impact of Trust on the Bottom Line

The quantitative results of a trust-based culture were remarkable. Zak concluded that those working in high-trust cultures:

  • Enjoyed their jobs 60% more
  • Were 70% more aligned with their companies' purpose
  • Felt 66% closer to their colleagues
  • Had 11% more empathy for their workmates,
  • Experienced 40% less burnout from their work
  • Earn an additional $6,450 a year, or 17% more than those working at low-trust organizations

Science has spoken. Trust is no longer optional for organizations that want to attract and retain the best people and want to achieve the best results.


The Concept in Psychology

Self-compassion, according to Kristen Neff, a self-compassion researcher, has three main elements:

    Self-kindness or having the ability to refrain from harsh criticism.

Self-compassion is often intertwined with self-esteem, but they really are two distinct concepts. Self-compassion is more about self-acceptance and self-esteem focuses on favorable self-evaluation, especially for achievements, according to Neff.

Self-compassion is not dependent on social comparisons or personal success. It’s more about recognizing and accepting your flaws, which is a process that often leads to growth and personal development.


The actual term ‘altruism’ started to be used around the mid-nineteenth century. Auguste Comte (1851–1854) defined it as the motivation to act benevolently—as opposed to ‘egoistic’ motives, which are directed towards the agent’s self-interests.

Behavioural and brain sciences have recently made important advancements in our understanding of human decision-making (Bargh et al. 2010). Philosophical questions originally formulated on dated views of the cognitive architecture of the mind—in our case, that action results from a single causal chain starting with one primary motive—might have simply become inadequate or confusing in view of current scientific understanding of the mind.

Interestingly, proximate mechanisms can themselves be accounted for with ultimate explanations (Clavien and Chapuisat 2012 West et al. 2007).

We use quotation marks because the term homo economicus is also used for referring to economic theories that might not fit this description because they take no stance on which preferences are contained in human’s utility function (Kirchgässner 2008).

Some of Ken Binmore’s big claims—e.g. he describes himself as a Hobbesian (2006)—might lead to think that he is an advocate of the “homo economicus” model. However, it should be noted that he does not deny the existence of sympathetic preferences—at least toward closely related individuals (2005: chap. 7).

In practical cases, the fitness consequences of a behaviour are often estimated over a shorter period, but with the assumption that they are representative of an effect on the final life-time fitness of the individuals.

Other example of this type of confusion between proximate and ultimate explanation are to be found in (Gintis et al. 2008: 249 Chaudhuri 2011: 78).

We are of course not denying the fact that instances of behavioural altruism can be moral. Our point is that these behaviours unlikely qualify as moral in virtue of being behaviourally altruistic.

One could debate on this point however because it is not always clear whether the authors defend a flexible or a more demanding form of other-regarding motivation (Vromen 2012). Moreover, it is in principle possible to formalize fine-grained other-regarding motivations in terms of utility functions (see Clavien 2012b).

It is still a matter of debate however, to what extent this would help to improve the axiomatic theory used in economic theory (Binmore 2005).


Types of Market Research: Market Research Methods and Examples

Whether an organization or business wishes to know purchase behavior of consumers or the likelihood of consumers paying a certain cost for a product, market research helps in drawing meaningful conclusions.

Depending on the methods and tools required, following are the types:

1. Primary Market Research (A combination of both Qualitative and Quantitative Research): Primary market research is a process, where organizations or businesses get in touch with the end consumers or employ a third party to carry out relevant studies to collect data. The data collected can be qualitative data (non-numerical data) or quantitative data (numerical or statistical data).

While conducting primary market research, one can gather two types of information: Exploratory and Specific. Exploratory research is open ended, where a problem is explored by asking open ended questions in a detailed interview format usually with a small group of people also known as sample. Here the sample size is restricted to 6-10 members. Specific research, on the other hand, is more pinpointed and is used to solve the problems that are identified by exploratory research.

As mentioned earlier primary market research is a combination of qualitative market research and quantitative market research. Qualitative market research study involves semi-structured or unstructured data collected through some of the commonly used qualitative research methods like:

Focus groups : Focus group is one of the commonly used qualitative research methods. Focus group is a small group of people (6-10) who typically respond to online surveys sent to them. The best part about focus group is the information can be collected remotely, can be done without personally interacting with the group members. However, this is a more expensive method as it is used to collect complex information.

One-to-one interview: As the name suggests this method involves personal interaction in the form of an interview, where the researcher asks a series of questions to collect information or data from the respondents. The questions are mostly open ended questions and asked in a way to facilitate responses. This method is heavily dependent on the ability and experience of the interviewer to ask questions that evoke responses.

Ethnographic research : This type of in-depth research is conducted in the natural settings of the respondents. This method requires the interviewer to adapt himself/herself to the natural environment of the respondents which could be a city or a remote village. Geographical constraints can be a hindering factor in conducting this kind of research. Ethnographic research can last from a few days to a few years.

Qualitative research methods are used by organizations to conducted structured market research by using online surveys , questionnaires and polls to gain statistical insights to make informed decisions.

This method was once conducted using pen and paper. This has now evolved to sending structured online surveys to the respondents to gain actionable insights. Researchers tend to use modern and technology-oriented survey platforms to structure and design their survey to evoke maximum response from respondents.

Through a well-structured mechanism, data is easily collected and reported and necessary action can be taken with all the information that is made available first hand.

2. Secondary Market Research: Secondary research uses information that is organized by outside source like government agencies, media, chambers of commerce etc. This information is published in newspaper, magazines, books, company website, free government and nongovernment agencies and so on. Secondary source makes use of the following:

Public sources: Public sources like library are an awesome way of gathering free information. Government libraries usually offer services free of cost and a researcher can document available information.

Commercial sources: Commercial source although reliable are expensive. Local newspapers, magazines, journal, television media are great commercial sources to collect information.

Educational Institutions: Although not a very popular source of collecting information, most universities and educational institutions are a rich source of information as many research projects are carried out there than any business sector.

Steps for conducting Market Research

Knowing what to do in various situations that arise during the investigation will save the researcher’s time and reduce problems. Today’s successful enterprises use powerful market research survey software that helps them conduct comprehensive research under a unified platform and hence provide actionable insights much faster with fewer problems.

Following are the steps to conduct an effective market research.

Step #1: Define the Problem

Having a well-defined subject of research will help researchers when they ask questions. These questions should be directed to solve problems and they have to be adapted to the project. Make sure the questions are written clearly and that the respondents understand them. Researchers can conduct a test with a small group to know if the questions are going to know whether the asked questions are understandable and will they be enough to gain insightful results.

Research objectives should be written in a precise way and should include a brief description of the information that is needed and the way in which it will obtain it. They should have an answer to this question “why are we doing the research?”

Step #2: Define the Sample

To carry out market research, researchers need a representative sample that can be collected using one of the many sampling techniques . A representative sample is a small number of people that reflect, as accurately as possible, a larger group.

  • An organization cannot waste their resources in collecting information from the wrong population. It is important that the population represents characteristics that matter to the researchers and that they need to investigate, are in the chosen sample.
  • Take into account that marketers will always be prone to fall into a bias in the sample because there will always be people who do not answer the survey because they are busy, or answer it incompletely, so researchers may not obtain the required data.
  • Regarding the size of the sample, the larger it is, the more likely it is to be representative of the population. A larger representative sample gives the researcher greater certainty that the people included are the ones they need, and they can possibly reduce bias. Therefore, if they want to avoid inaccuracy in our surveys, they should have representative and balanced samples.
  • Practically all the surveys that are considered in a serious way, are based on a scientific sampling, based on statistical and probability theories.

There are two ways to obtain a representative sample:

  • Probability sampling : In probability sampling , the choice of the sample will be made at random, which guarantees that each member of the population will have the same probability of selection and inclusion in the sample group. Researchers should ensure that they have updated information on the population from which they will draw the sample and survey the majority to establish representativeness.
  • Non-probability sampling: In a non-probability sampling, different types of people are seeking to obtain a more balanced representative sample. Knowing the demographic characteristics of our group will undoubtedly help to limit the profile of the desired sample and define the variables that interest the researchers, such as gender, age, place of residence, etc. By knowing these criteria, before obtaining the information, researchers can have the control to create a representative sample that is efficient for us.

When a sample is not representative, there can be a margin of error . If researchers want to have a representative sample of 100 employees, they should choose a similar number of men and women.

The sample size is very important, but it does not guarantee accuracy. More than size, representativeness is related to the sampling frame, that is, to the list from which people are selected, for example, part of a survey.

If researchers want to continue expanding their knowledge on how to determine the size of the sample consult our guide on sampling here.

Step #3: Carry out data collection

First, a data collection instrument should be developed. The fact that they do not answer a survey, or answer it incompletely will cause errors in research. The correct collection of data will prevent this.

Step #4: Analyze the results

Each of the points of the market research process is linked to one another. If all the above is executed well, but there is no accurate analysis of the results, then the decisions made consequently will not be appropriate. In-depth analysis conducted without leaving loose ends will be effective in gaining solutions. Data analysis will be captured in a report, which should also be written clearly so that effective decisions can be made on that basis.

Analyze and interpret the results is to look for a wider meaning to the obtained data. All the previous phases have been developed to arrive at this moment.

How can researchers measure the obtained results? The only quantitative data that will be obtained is age, sex, profession, and number of interviewees because the rest are emotions and experiences that have been transmitted to us by the interlocutors. For this, there is a tool called empathy map that forces us to put ourselves in the place of our clientele with the aim of being able to identify, really, the characteristics that will allow us to make a better adjustment between our products or services and their needs or interests.

When the research has been carefully planned, the hypotheses have been adequately defined and the indicated collection method has been used, the interpretation is usually carried out easily and successfully. What follows after conducting market research?

Step #5: Make the Research Report

When presenting the results, researchers should focus on: what do they want to achieve using this research report and while answering this question they should not assume that the structure of the survey is the best way to do the analysis. One of the big mistakes that many researchers make is that they present the reports in the same order of their questions and do not see the potential of storytelling.

To make good reports, the best analysts give the following advice: follow the inverted pyramid style to present the results, answering at the beginning the essential questions of the business that caused the investigation. Start with the conclusions and give them fundamentals, instead of accumulating evidence. After this researchers can provide details to the readers who have the time and interest.

Step #6: Make Decisions

An organization or a researcher should never ask “why do market research”, they should just do it!

A market research helps researchers to know a wide range of information, for example, consumer purchase intentions, or gives feedback about the growth of the target market. They can also discover valuable information that will help in estimating the prices of their product or service and find a point of balance that will benefit them and the consumers.

Take decisions! Act and implement.

Benefits of an Efficient Market Research

  • Make well-informed decisions: The growth of an organization is dependent on the way decisions are made by the management. Using market research techniques, the management can make business decisions on the basis of obtained results that back their knowledge and experience. Market research helps to know market trends, hence to carry it out frequently to get to know the customers thoroughly.
  • Gain accurate information: Market research provides real and accurate information that will prepare the organization for any mishaps that may happen in the future. By properly investigating the market, a business will undoubtedly be taking a step forward, and therefore it will be taking advantage of its existing competitors.
  • Determine the market size: A researcher can evaluate the size of the market that must be covered in case of selling a product or service in order to make profits.
  • Choose an appropriate sales system: Select a precise sales system according to what the market is asking for, and according to this, the product/service can be positioned in the market.
  • Learn about customer preferences: It helps to know how the preferences (and tastes) of the clients change so that the company can satisfy preferences, purchasing habits, and income level. Researchers can determine the type of product that must be manufactured or sold based on the specific needs of consumers.
  • Gather details about customer perception about the brand: In addition to generating information, market research helps a researcher in understanding how the customers perceive the organization or brand.
  • Analyze customer communication methods: Market research serves as a guide for communication with current and potential clients.
  • Productive business investment: It is a great investment for any business, because thanks to it they get invaluable information, it shows researchers the way to follow to take the right path and achieve the sales that are required.

5 Market Research Tips for Businesses

Tip #1: Define the objective of your research.

Before setting off on your research quest, think about what you’re trying to achieve next with your business. Are you looking to increase traffic to your location? Or increase sales? Or convert customers from one-time purchasers to regulars? Figuring out your objective will help you tailor the rest of your research and your future marketing materials. Having an objective for your research will flesh out what kind of data you need to collect.

Tip #2: Learn About Your Target Customers.

The most important thing to remember is that your business serves a specific kind of customer. Defining your specific customer has many advantages like allowing you to understand what kind of language to use when crafting your marketing materials, and how to approach building relationships with your customer. When you take time to define your target customer you can also find the best products and services to sell to them.

You want to know as much as you can about your target customer. You can gather this information through observation and by researching the kind of customers who frequent your type of business. For starters, helpful things to know are their age and income. What do they do for a living? What’s their marital status and education level?

Tip #3: Recognize that knowing who you serve helps you define who you do not.

Let’s take a classic example from copywriting genius Dan Kennedy. He says that if you’re opening up a fine dining steakhouse focused on decadent food, you know right off the bat that you’re not looking to attract vegetarians or dieters. Armed with this information, you can create better marketing messages that speak to your target customers.

It’s okay to decide who is not a part of your target customer base. In fact, for small businesses knowing who you don’t cater to can be essential in helping you grow. Why? Simple, if you’re small your advantage is that you can connect deeply with a specific segment of the market. You want to focus your efforts on the right customer who already is compelled to spend money on your offer.

If you’re spreading yourself thin by trying to be all things to everyone, you will only dilute your core message. Instead, keep your focus on your target customer. Define them, go deep, and you’ll be able to figure out how you can best serve them with your products and services.

Tip #4: Learn from your competition.

This works for brick and mortar businesses as well as internet businesses because it allows you to step into the shoes of your customer and open up to a new perspective of your business. Take a look around the internet and around your town. If you can, visit your competitor’s shops. For example, if you own a restaurant specializing in Italian cuisine, dine at the other Italian place in your neighborhood or in the next township.

As you experience the business from the customer perspective, look for what’s being done right and wrong.

Can you see areas that need attention or improvement? How are you running things in comparison? What’s the quality of their product and customer service? Are the customers here pleased? Also, take a close look at their market segment. Who else is patronizing their business? Are they the same kinds of people who spend money with you? By asking these questions and doing in-person research, you can dig up a lot of information to help you define your unique selling position and create even better offers for your customers.

Tip #5: Get your target customers to open up and tell you everything.

A good customer survey is one of the most valuable market research tools because it gives you the opportunity to get inside your customer’s head. However, remember that some feedback may be harsh, so take criticism as a learning tool to point you in the right direction.

Creating a survey is simple. Ask questions about what your customer thinks you’re doing right, and what can be improved. You can also prompt them to tell you what kinds of products and services they’d like to see you add which gives you amazing insight into how to monetize your business more. Many customers will be delighted to offer feedback. You can even give customers who fill out surveys a gift like a special coupon for their next purchase.

Bonus Tip: Use an insight & research repository

An insight & research repository is a consolidated research management platform to derive insights about past and ongoing market research. With the use of such a tool, you can leverage past research to get to insights faster, build on previously done market research and draw trendlines, utilize research techniques that have worked in the past, and more.

Why Does Every Business Need Market Research?

Market research is one of the most effective ways to gain insight into your customer base, competitors, and the overall market. The goal of conducting market research is to equip your company with the information you need to make informed decisions.

It is especially important when small businesses are trying to determine whether a new business idea is viable, looking to move into a new market, or are launching a new product or service. Read below for a more in-depth look at how market research can help small businesses.

COMPETITION According to a study conducted by Business Insider, 72% of small businesses focus on increasing revenue. Conducting research helps businesses gain insight into competitor behavior. By learning about your competitor’s strengths and weaknesses, you can learn how to position your product or offering. In order to be successful, small businesses need to have an understanding of what products and services competitors are offering, and their price point.

CUSTOMERS Many small businesses feel they have an understanding of their customer, only to conduct market research and learn they had the wrong assumptions. By conducting research, you can create a profile of your average customer and gain insight into their buying habits, how much they’re willing to spend, and which features resonate with them. Additionally, and perhaps more importantly, you can learn what will make someone use your product or service over a competitor.

OPPORTUNITIES Potential opportunities, whether they are products or services, can be identified by conducting market research. By learning more about your customers, you can gather insights into complementary products and services. Consumer needs change over time, influenced by new technology and different conditions, and you may find new needs that are not being met, which can create new opportunities for your business.

FORECAST A small business is affected by the performance of the local and national economy, as are its’ customers. If consumers are worried, then they will be more restrained when spending money, which affects the business. By conducting research with consumers, businesses can get an idea of whether they are optimistic or apprehensive about the direction of the economy, and make adjustments as necessary. For example, a small business owner may decide to postpone a new product launch if it appears the economic environment is turning negative.


Regime Shifts, Resilience, and Biodiversity in Ecosystem Management

Carl Folke, Steve Carpenter, Brian Walker, Marten Scheffer, Thomas Elmqvist, Lance Gunderson, C.S. Holling
Vol. 35, 2004

Abstract

▪ Abstract We review the evidence of regime shifts in terrestrial and aquatic environments in relation to resilience of complex adaptive ecosystems and the functional roles of biological diversity in this context. The evidence reveals that the likelihood . Read More

Figure 1: Effects of eutrophication and fishing and observed shifts between states in coral reefs (modified from Bellwood et al. 2004).

Figure 2: Alternate states in a diversity of ecosystems (1, 4) and the causes (2) and triggers (3) behind loss of resilience and regime shifts. For more examples, see Thresholds Database on the Web si.


Empathy and perspective taking: How social skills are built

Understanding what other people want, how they feel, and how they see the world is becoming increasingly important in our complex, globalised society. Social skills enable us to make friends and create a network of people who support us. But not everyone finds it easy to interact with other people. One of the main reasons is that two of the most important social skills -- empathy, i.e. being able to empathise with the other person's emotions, and the ability to take a perspective, i.e. being able to gain an information by adopting another person's point of view -- are developed to different degrees.

Researchers have long been trying to find out what helps one to understand others. The more you know about these two social skills, the better you can help people to form social relationships. However, it still not exactly clear what empathy and perspective taking are (the latter is also known as "theory of mind"). Being able to read a person's emotions through their eyes, understand a funny story, or interpret the action of another person -- in everyday life there are always social situations that require these two important abilities. However, they each require a combination of different individual subordinate skills. If it is necessary to interpret looks and facial expressions in one situation, in another it may be necessary to think along with the cultural background of the narrator or to know his or her current needs.

To date, countless studies have been conducted that examine empathy and perspective taking as a whole. However, it has not yet been clarified what constitutes the core of both competencies and where in the brain their bases lie. Philipp Kanske, former MPI CBS research group leader and currently professor at the TU Dresden, together with Matthias Schurz from the Donders Institute in Nijmegen, Netherlands, and an international team of researchers, have now developed a comprehensive explanatory model.

"Both of these abilities are processed in the brain by a 'main network' specialised in empathy or changing perspective, which is activated in every social situation. But, depending on the situation, it also involves additional networks," Kanske explains, referring to the results of the study, which has just been published in the journal Psychological Bulletin. If we read the thoughts and feelings of others, for example, from their eyes, other additional regions are involved than if we deduce them from their actions or from a narrative. "The brain is thus able to react very flexibly to individual requirements."

For empathy, a main network that can recognise acutely significant situations, for example, by processing fear, works together with additional specialised regions, for example, for face or speech recognition. When changing perspective, in turn, the regions that are also used for remembering the past or fantasising about the future, i.e., for thoughts that deal with things that cannot be observed at the moment, are active as the core network. Here too, additional brain regions are switched on in each concrete situation.

Through their analyses, the researchers have also found out that particularly complex social problems require a combination of empathy and a change of perspective. People who are particularly competent socially seem to view the other person in both ways -- on the basis of feelings and on the basis of thoughts. In their judgement, they then find the right balance between the two.

"Our analysis also shows, however, that a lack of one of the two social skills can also mean that not this skill as a whole is limited. It may be that only a certain factor is affected, such as understanding facial expressions or speech melody," adds Kanske. A single test is therefore not sufficient to certify a person's lack of social skills. Rather, there must be a series of tests to actually assess them as having little empathy, or as being unable to take the other person's point of view.

The scientists have investigated these relationships by means of a large-scale meta-analysis. They identified, on the one hand, commonalities in the MRI pattern of the 188 individual studies examined when the participants used empathy or perspective taking. This allowed the localisation of the core regions in the brain for each of the two social skills. However, results also indicated how the MRI patterns differed depending on the specific task and, therefore, which additional brain regions were used.


Economics, psychology, policy

Update: Here is the latest version of the Nudge Database pdf

This is a list of empirical ‘nudges’ and their sources with a particular emphasis on those sourced from academic papers. It will be updated regularly. I created it because while there are many interesting papers and websites documenting nudges, there is a lamentable absence of any searchable, central database. If you know of some nudges that I have not included, please let me know by email or Twitter. The nudges listed here are intended as a quick reference: if you are looking for sample sizes and p-values you need to check the original paper. Where possible I have provided links to freely accessible versions of the papers.
Part I || Part II || Part III || Part IV || Part V || Part VI || Part VII || Part VIII || Part IX || Part X

1.
N udge: Using defaults in organ donation to increase compliance rates. Those countries where people are required to opt-out of organ donation report significantly higher consent than those with an opt-in policy. Possibly the most famous nudge, certainly the most eye-catching.

Tags : Defaults / Organ donation / opt-in opt-out

Source: Johnson & Goldstein (2003), ‘Do Defaults Save Lives?', Science, Vol. 302


2.
Nudge: The authors sought to prime honesty by asking people to sign at the start of a form rather than the end when reporting how many miles they had driven on their car for insurance purposes.

Tags : priming / salience / signature / honesty


3.
Nudge: General Electric wanted its employees to stop smoking. They submitted to a Randomized Control Trial where the treatment group received cash incentives to quit. The control group received no incentives. Quitting for 6 months earned you $250, quitting for 12 months $400.

The treatment group had 3 times the success rate of the control (14.7% gave up smoking vs 5%), even after financial incentives were discontinued after 12 months (9.4% vs 3.6%). On the strength of this finding, GE now does this for their 152,000 employees.

Tags : Smoking / financial incentives / health


4.
Nudge: The ‘Save More Tomorrow’ [SMarT] program used defaults to increase employees’ savings rates by automatically increasing the % of their wage devoted to saving. Average saving rates for SMarT program participants increased from 3.5% to 13.6% over the course of 40 months. This is one of the most famous nudges.
Tags : defaults / saving / save more tomorrow

Source: Benartzi & Thaler (2004), ‘Save More Tomorrow’, Journal of Political Economy.


5.
Nudge: The Behavioral Insights Team in the U.K. used social normative messages to increase tax compliance in 2011. The control group received standard tax letters. The treatment groups received the letters with an added normative messages. The difference in compliance rates between the control and the most effective treatment group was 15 percentage points.


Tags : social norms / tax compliance / Behavioural Insights Team


6.
Nudge: A Randomized Controlled Trial using social normative messages to increase publican license renewals in Ireland. Similar to the work of the BIT, the control group received a standard renewal letter. The treatment group received a simplified letter which included a social normative message. After 1 year the treatment group had 35.5% renewal rates, the control had 29.4%.

Tags : social norms / compliance / pub licenses

Source: Walsh, K. [2012, unpublished]

Personalization in policy is an interesting area. Cass Sunstein, co-author of 'Nudge' believes that "personalized defaults are the way of the future". Sunstein says " it is increasingly possible for private and public institutions to produce highly personalized default rules, which reduce the problems with one-size-fits-all defaults. In principle, personalized default rules could be designed for every individual in the relevant population."
Tags : salience / tax compliance / Behavioural Insights Team

Tags : weight loss / regret aversion / salience / lotteries / health

The treatment group had a 1% chance of winning $100 contingent upon taking their pills correctly. The control group did not have any incentives to take their pills correctly beyond the threat of dying. Adherance in the treatment group was almost 100% compared to 80% in the control [though with the caveat that the sample size is very small, n=10] . Findings like this support the argument that more should be spent on behavioral research in health-care. Dr. David Halpern of the Behavioral Insights Team has noted that in Lord Darzi’s 2008 report on the NHS behavioral research currently receives less than 0.5% of medical research spending in the U.K.

Tags : salience / health / lotteries / adherance / financial incentive


10.
Nudge: The Behavioural Insights Team ran a 6 month Randomized Controlled Trial with Jobcentre Plus in Essex to test the impact of several changes to the way the centre operates, specifically through commitment devices & emphasis on building psychological resilence. They found job seekers in the treatment group 15-20% more likely to be off benefits 13 weeks after signing on.

Tags : job-seekers / commitment / behavioral insights team


11.
Nudge: The American electricity company Opower use social normative messages comparing a person’s electricity usage to that of their neighbours to reduce electricity consumption. This is an area with interesting diversity of findings. Schultz et al (2007) found the use of normative messages with injunctive emoticons effective at reducing consumption. Allcott (2011) estimates this program reduces consumption by around 2% for Opower’s customers.

Tags : electricity usage / social norms / Opower / energy efficiency


Models of Resilience

There are three general classes of resilience models — compensatory, protective, and challenge — that explain how resilience factors operate to alter the trajectory from risk exposure to negative outcome (Fergus and Zimmerman, 2005).

A compensatory model best explains a situation where a resilience factor counteracts or operates in an opposite direction to a risk factor. The resilience factor has a direct effect on the outcome, one that is independent of the effect of the risk factor. In CIET’s ACYRN-East study, for example, alcohol abstinence or moderation is compensatory in the sense that it is directly and independently associated with lower risk for youth suicide (see Andersson and Ledogar, 2008).

In the protective model, assets or resources moderate or reduce the effects of a risk on a negative outcome. Protective factors may operate in several ways to influence outcomes. They may help to neutralize the effects of risks they may weaken, but not completely remove them or they may enhance the positive effect of another promotive factor in producing an outcome. In the ACYRN-East study, being drug-free, though not directly associated with lower suicide risk, is associated with lower alcohol use and thus is protective in the sense that it enhances the latter’s anti-suicide potential.

A third model of resilience is the challenge model. In this model, the association between a risk factor and an outcome is 𠇌urvilinear”: exposures to both low and high levels of a risk factor are associated with negative outcomes, but moderate levels of the risk are related to less negative (or positive) outcomes. Adolescents exposed to moderate levels of risk, for example, may be confronted with enough of the risk factor to learn how to overcome it but are not exposed to so much of it that overcoming it is impossible. Many challenge models require longitudinal data. Researchers use them, for example, to track how repeated exposure to challenges prepares adolescents for dealing with adversities in the future.

An interesting application of the challenge model of resilience is provided by Richardson (2002) for whom “resilient reintegration” is the most positive outcome of a process involving an individual’s reactions to some stress or adversity. Resilient reintegration occurs when one experiences some insight or growth as a result of disruption. It results in the identification or strengthening of resilient qualities. According to the underlying theory, individuals are genetically predisposed with more potential than they are conscious of. The 𠇍isruptive resiliency process” is a means to access this potential.

Accentuating the Positive

For Richardson, research identified with this process of resilient reintegration constituted a second wave in what he called the metatheory of resiliency. The first wave was mainly descriptive it understood resilience to be a set of strengths or assets that helped people survive adversity. The second wave, resilient reintegration, was more focused on helping people to achieve “growth or adaptation through disruption.” In a third “postmodern” wave of resilience theory, the concept refers to “the force within everyone that drives them to seek self-actualization, altruism, wisdom and harmony with a spiritual source of strength” (Richardson, 2002, p. 313).

This third wave posited by Richardson has its counterpart in the educational field via the Health Realization Model posited by Mills and Schuford (2003) for whom a healthy, resilient outlook is “hard wired in us as human beings, just as the ability to breathe or ingest food or have our heart beat to pump blood are all innate, hard wired functions” (p. 7). For Mills and Schuford, the task of good educators is to empower youth to regain their natural well-being, self-motivation and healthy thinking. 1

This positive perspective had an influence on the thinking of Native American educators such as Iris HeavyRunner who, referring to Mills in a 1997 paper, called resilience “our innate capacity for well-being” (HeavyRunner and Morris, 1997, p. 2). Later she wrote:

Resilience is the natural, human capacity to navigate life well. It is something every human being has — wisdom, common sense. It means coming to know how you think, who you are spiritually, where you come from, and where you are going. The key is learning how to utilize innate resilience, which is the birthright of every human being. It involves understanding our inner spirit and finding a sense of direction. (HeavyRunner and Marshall, 2003, p. 14)


The actual term ‘altruism’ started to be used around the mid-nineteenth century. Auguste Comte (1851–1854) defined it as the motivation to act benevolently—as opposed to ‘egoistic’ motives, which are directed towards the agent’s self-interests.

Behavioural and brain sciences have recently made important advancements in our understanding of human decision-making (Bargh et al. 2010). Philosophical questions originally formulated on dated views of the cognitive architecture of the mind—in our case, that action results from a single causal chain starting with one primary motive—might have simply become inadequate or confusing in view of current scientific understanding of the mind.

Interestingly, proximate mechanisms can themselves be accounted for with ultimate explanations (Clavien and Chapuisat 2012 West et al. 2007).

We use quotation marks because the term homo economicus is also used for referring to economic theories that might not fit this description because they take no stance on which preferences are contained in human’s utility function (Kirchgässner 2008).

Some of Ken Binmore’s big claims—e.g. he describes himself as a Hobbesian (2006)—might lead to think that he is an advocate of the “homo economicus” model. However, it should be noted that he does not deny the existence of sympathetic preferences—at least toward closely related individuals (2005: chap. 7).

In practical cases, the fitness consequences of a behaviour are often estimated over a shorter period, but with the assumption that they are representative of an effect on the final life-time fitness of the individuals.

Other example of this type of confusion between proximate and ultimate explanation are to be found in (Gintis et al. 2008: 249 Chaudhuri 2011: 78).

We are of course not denying the fact that instances of behavioural altruism can be moral. Our point is that these behaviours unlikely qualify as moral in virtue of being behaviourally altruistic.

One could debate on this point however because it is not always clear whether the authors defend a flexible or a more demanding form of other-regarding motivation (Vromen 2012). Moreover, it is in principle possible to formalize fine-grained other-regarding motivations in terms of utility functions (see Clavien 2012b).

It is still a matter of debate however, to what extent this would help to improve the axiomatic theory used in economic theory (Binmore 2005).


Types of Market Research: Market Research Methods and Examples

Whether an organization or business wishes to know purchase behavior of consumers or the likelihood of consumers paying a certain cost for a product, market research helps in drawing meaningful conclusions.

Depending on the methods and tools required, following are the types:

1. Primary Market Research (A combination of both Qualitative and Quantitative Research): Primary market research is a process, where organizations or businesses get in touch with the end consumers or employ a third party to carry out relevant studies to collect data. The data collected can be qualitative data (non-numerical data) or quantitative data (numerical or statistical data).

While conducting primary market research, one can gather two types of information: Exploratory and Specific. Exploratory research is open ended, where a problem is explored by asking open ended questions in a detailed interview format usually with a small group of people also known as sample. Here the sample size is restricted to 6-10 members. Specific research, on the other hand, is more pinpointed and is used to solve the problems that are identified by exploratory research.

As mentioned earlier primary market research is a combination of qualitative market research and quantitative market research. Qualitative market research study involves semi-structured or unstructured data collected through some of the commonly used qualitative research methods like:

Focus groups : Focus group is one of the commonly used qualitative research methods. Focus group is a small group of people (6-10) who typically respond to online surveys sent to them. The best part about focus group is the information can be collected remotely, can be done without personally interacting with the group members. However, this is a more expensive method as it is used to collect complex information.

One-to-one interview: As the name suggests this method involves personal interaction in the form of an interview, where the researcher asks a series of questions to collect information or data from the respondents. The questions are mostly open ended questions and asked in a way to facilitate responses. This method is heavily dependent on the ability and experience of the interviewer to ask questions that evoke responses.

Ethnographic research : This type of in-depth research is conducted in the natural settings of the respondents. This method requires the interviewer to adapt himself/herself to the natural environment of the respondents which could be a city or a remote village. Geographical constraints can be a hindering factor in conducting this kind of research. Ethnographic research can last from a few days to a few years.

Qualitative research methods are used by organizations to conducted structured market research by using online surveys , questionnaires and polls to gain statistical insights to make informed decisions.

This method was once conducted using pen and paper. This has now evolved to sending structured online surveys to the respondents to gain actionable insights. Researchers tend to use modern and technology-oriented survey platforms to structure and design their survey to evoke maximum response from respondents.

Through a well-structured mechanism, data is easily collected and reported and necessary action can be taken with all the information that is made available first hand.

2. Secondary Market Research: Secondary research uses information that is organized by outside source like government agencies, media, chambers of commerce etc. This information is published in newspaper, magazines, books, company website, free government and nongovernment agencies and so on. Secondary source makes use of the following:

Public sources: Public sources like library are an awesome way of gathering free information. Government libraries usually offer services free of cost and a researcher can document available information.

Commercial sources: Commercial source although reliable are expensive. Local newspapers, magazines, journal, television media are great commercial sources to collect information.

Educational Institutions: Although not a very popular source of collecting information, most universities and educational institutions are a rich source of information as many research projects are carried out there than any business sector.

Steps for conducting Market Research

Knowing what to do in various situations that arise during the investigation will save the researcher’s time and reduce problems. Today’s successful enterprises use powerful market research survey software that helps them conduct comprehensive research under a unified platform and hence provide actionable insights much faster with fewer problems.

Following are the steps to conduct an effective market research.

Step #1: Define the Problem

Having a well-defined subject of research will help researchers when they ask questions. These questions should be directed to solve problems and they have to be adapted to the project. Make sure the questions are written clearly and that the respondents understand them. Researchers can conduct a test with a small group to know if the questions are going to know whether the asked questions are understandable and will they be enough to gain insightful results.

Research objectives should be written in a precise way and should include a brief description of the information that is needed and the way in which it will obtain it. They should have an answer to this question “why are we doing the research?”

Step #2: Define the Sample

To carry out market research, researchers need a representative sample that can be collected using one of the many sampling techniques . A representative sample is a small number of people that reflect, as accurately as possible, a larger group.

  • An organization cannot waste their resources in collecting information from the wrong population. It is important that the population represents characteristics that matter to the researchers and that they need to investigate, are in the chosen sample.
  • Take into account that marketers will always be prone to fall into a bias in the sample because there will always be people who do not answer the survey because they are busy, or answer it incompletely, so researchers may not obtain the required data.
  • Regarding the size of the sample, the larger it is, the more likely it is to be representative of the population. A larger representative sample gives the researcher greater certainty that the people included are the ones they need, and they can possibly reduce bias. Therefore, if they want to avoid inaccuracy in our surveys, they should have representative and balanced samples.
  • Practically all the surveys that are considered in a serious way, are based on a scientific sampling, based on statistical and probability theories.

There are two ways to obtain a representative sample:

  • Probability sampling : In probability sampling , the choice of the sample will be made at random, which guarantees that each member of the population will have the same probability of selection and inclusion in the sample group. Researchers should ensure that they have updated information on the population from which they will draw the sample and survey the majority to establish representativeness.
  • Non-probability sampling: In a non-probability sampling, different types of people are seeking to obtain a more balanced representative sample. Knowing the demographic characteristics of our group will undoubtedly help to limit the profile of the desired sample and define the variables that interest the researchers, such as gender, age, place of residence, etc. By knowing these criteria, before obtaining the information, researchers can have the control to create a representative sample that is efficient for us.

When a sample is not representative, there can be a margin of error . If researchers want to have a representative sample of 100 employees, they should choose a similar number of men and women.

The sample size is very important, but it does not guarantee accuracy. More than size, representativeness is related to the sampling frame, that is, to the list from which people are selected, for example, part of a survey.

If researchers want to continue expanding their knowledge on how to determine the size of the sample consult our guide on sampling here.

Step #3: Carry out data collection

First, a data collection instrument should be developed. The fact that they do not answer a survey, or answer it incompletely will cause errors in research. The correct collection of data will prevent this.

Step #4: Analyze the results

Each of the points of the market research process is linked to one another. If all the above is executed well, but there is no accurate analysis of the results, then the decisions made consequently will not be appropriate. In-depth analysis conducted without leaving loose ends will be effective in gaining solutions. Data analysis will be captured in a report, which should also be written clearly so that effective decisions can be made on that basis.

Analyze and interpret the results is to look for a wider meaning to the obtained data. All the previous phases have been developed to arrive at this moment.

How can researchers measure the obtained results? The only quantitative data that will be obtained is age, sex, profession, and number of interviewees because the rest are emotions and experiences that have been transmitted to us by the interlocutors. For this, there is a tool called empathy map that forces us to put ourselves in the place of our clientele with the aim of being able to identify, really, the characteristics that will allow us to make a better adjustment between our products or services and their needs or interests.

When the research has been carefully planned, the hypotheses have been adequately defined and the indicated collection method has been used, the interpretation is usually carried out easily and successfully. What follows after conducting market research?

Step #5: Make the Research Report

When presenting the results, researchers should focus on: what do they want to achieve using this research report and while answering this question they should not assume that the structure of the survey is the best way to do the analysis. One of the big mistakes that many researchers make is that they present the reports in the same order of their questions and do not see the potential of storytelling.

To make good reports, the best analysts give the following advice: follow the inverted pyramid style to present the results, answering at the beginning the essential questions of the business that caused the investigation. Start with the conclusions and give them fundamentals, instead of accumulating evidence. After this researchers can provide details to the readers who have the time and interest.

Step #6: Make Decisions

An organization or a researcher should never ask “why do market research”, they should just do it!

A market research helps researchers to know a wide range of information, for example, consumer purchase intentions, or gives feedback about the growth of the target market. They can also discover valuable information that will help in estimating the prices of their product or service and find a point of balance that will benefit them and the consumers.

Take decisions! Act and implement.

Benefits of an Efficient Market Research

  • Make well-informed decisions: The growth of an organization is dependent on the way decisions are made by the management. Using market research techniques, the management can make business decisions on the basis of obtained results that back their knowledge and experience. Market research helps to know market trends, hence to carry it out frequently to get to know the customers thoroughly.
  • Gain accurate information: Market research provides real and accurate information that will prepare the organization for any mishaps that may happen in the future. By properly investigating the market, a business will undoubtedly be taking a step forward, and therefore it will be taking advantage of its existing competitors.
  • Determine the market size: A researcher can evaluate the size of the market that must be covered in case of selling a product or service in order to make profits.
  • Choose an appropriate sales system: Select a precise sales system according to what the market is asking for, and according to this, the product/service can be positioned in the market.
  • Learn about customer preferences: It helps to know how the preferences (and tastes) of the clients change so that the company can satisfy preferences, purchasing habits, and income level. Researchers can determine the type of product that must be manufactured or sold based on the specific needs of consumers.
  • Gather details about customer perception about the brand: In addition to generating information, market research helps a researcher in understanding how the customers perceive the organization or brand.
  • Analyze customer communication methods: Market research serves as a guide for communication with current and potential clients.
  • Productive business investment: It is a great investment for any business, because thanks to it they get invaluable information, it shows researchers the way to follow to take the right path and achieve the sales that are required.

5 Market Research Tips for Businesses

Tip #1: Define the objective of your research.

Before setting off on your research quest, think about what you’re trying to achieve next with your business. Are you looking to increase traffic to your location? Or increase sales? Or convert customers from one-time purchasers to regulars? Figuring out your objective will help you tailor the rest of your research and your future marketing materials. Having an objective for your research will flesh out what kind of data you need to collect.

Tip #2: Learn About Your Target Customers.

The most important thing to remember is that your business serves a specific kind of customer. Defining your specific customer has many advantages like allowing you to understand what kind of language to use when crafting your marketing materials, and how to approach building relationships with your customer. When you take time to define your target customer you can also find the best products and services to sell to them.

You want to know as much as you can about your target customer. You can gather this information through observation and by researching the kind of customers who frequent your type of business. For starters, helpful things to know are their age and income. What do they do for a living? What’s their marital status and education level?

Tip #3: Recognize that knowing who you serve helps you define who you do not.

Let’s take a classic example from copywriting genius Dan Kennedy. He says that if you’re opening up a fine dining steakhouse focused on decadent food, you know right off the bat that you’re not looking to attract vegetarians or dieters. Armed with this information, you can create better marketing messages that speak to your target customers.

It’s okay to decide who is not a part of your target customer base. In fact, for small businesses knowing who you don’t cater to can be essential in helping you grow. Why? Simple, if you’re small your advantage is that you can connect deeply with a specific segment of the market. You want to focus your efforts on the right customer who already is compelled to spend money on your offer.

If you’re spreading yourself thin by trying to be all things to everyone, you will only dilute your core message. Instead, keep your focus on your target customer. Define them, go deep, and you’ll be able to figure out how you can best serve them with your products and services.

Tip #4: Learn from your competition.

This works for brick and mortar businesses as well as internet businesses because it allows you to step into the shoes of your customer and open up to a new perspective of your business. Take a look around the internet and around your town. If you can, visit your competitor’s shops. For example, if you own a restaurant specializing in Italian cuisine, dine at the other Italian place in your neighborhood or in the next township.

As you experience the business from the customer perspective, look for what’s being done right and wrong.

Can you see areas that need attention or improvement? How are you running things in comparison? What’s the quality of their product and customer service? Are the customers here pleased? Also, take a close look at their market segment. Who else is patronizing their business? Are they the same kinds of people who spend money with you? By asking these questions and doing in-person research, you can dig up a lot of information to help you define your unique selling position and create even better offers for your customers.

Tip #5: Get your target customers to open up and tell you everything.

A good customer survey is one of the most valuable market research tools because it gives you the opportunity to get inside your customer’s head. However, remember that some feedback may be harsh, so take criticism as a learning tool to point you in the right direction.

Creating a survey is simple. Ask questions about what your customer thinks you’re doing right, and what can be improved. You can also prompt them to tell you what kinds of products and services they’d like to see you add which gives you amazing insight into how to monetize your business more. Many customers will be delighted to offer feedback. You can even give customers who fill out surveys a gift like a special coupon for their next purchase.

Bonus Tip: Use an insight & research repository

An insight & research repository is a consolidated research management platform to derive insights about past and ongoing market research. With the use of such a tool, you can leverage past research to get to insights faster, build on previously done market research and draw trendlines, utilize research techniques that have worked in the past, and more.

Why Does Every Business Need Market Research?

Market research is one of the most effective ways to gain insight into your customer base, competitors, and the overall market. The goal of conducting market research is to equip your company with the information you need to make informed decisions.

It is especially important when small businesses are trying to determine whether a new business idea is viable, looking to move into a new market, or are launching a new product or service. Read below for a more in-depth look at how market research can help small businesses.

COMPETITION According to a study conducted by Business Insider, 72% of small businesses focus on increasing revenue. Conducting research helps businesses gain insight into competitor behavior. By learning about your competitor’s strengths and weaknesses, you can learn how to position your product or offering. In order to be successful, small businesses need to have an understanding of what products and services competitors are offering, and their price point.

CUSTOMERS Many small businesses feel they have an understanding of their customer, only to conduct market research and learn they had the wrong assumptions. By conducting research, you can create a profile of your average customer and gain insight into their buying habits, how much they’re willing to spend, and which features resonate with them. Additionally, and perhaps more importantly, you can learn what will make someone use your product or service over a competitor.

OPPORTUNITIES Potential opportunities, whether they are products or services, can be identified by conducting market research. By learning more about your customers, you can gather insights into complementary products and services. Consumer needs change over time, influenced by new technology and different conditions, and you may find new needs that are not being met, which can create new opportunities for your business.

FORECAST A small business is affected by the performance of the local and national economy, as are its’ customers. If consumers are worried, then they will be more restrained when spending money, which affects the business. By conducting research with consumers, businesses can get an idea of whether they are optimistic or apprehensive about the direction of the economy, and make adjustments as necessary. For example, a small business owner may decide to postpone a new product launch if it appears the economic environment is turning negative.


Regime Shifts, Resilience, and Biodiversity in Ecosystem Management

Carl Folke, Steve Carpenter, Brian Walker, Marten Scheffer, Thomas Elmqvist, Lance Gunderson, C.S. Holling
Vol. 35, 2004

Abstract

▪ Abstract We review the evidence of regime shifts in terrestrial and aquatic environments in relation to resilience of complex adaptive ecosystems and the functional roles of biological diversity in this context. The evidence reveals that the likelihood . Read More

Figure 1: Effects of eutrophication and fishing and observed shifts between states in coral reefs (modified from Bellwood et al. 2004).

Figure 2: Alternate states in a diversity of ecosystems (1, 4) and the causes (2) and triggers (3) behind loss of resilience and regime shifts. For more examples, see Thresholds Database on the Web si.


Discussion and Conclusions

Personality traits are defined as relatively enduring patterns of people’s thoughts, beliefs, and behaviors (i.e., thoughts and beliefs are considered a fundamental part of an individual’s personality from this perspective) (32). This view contrasts with the prevalent assumption in economics, where preferences are viewed as an individual characteristic, while beliefs are a property of the equilibrium and are often assumed to be formed rationally on the basis of the available evidence. This means that there should be no systematic relationship between what people believe about others’ behavior and their own preferences. We should thus not expect a systematic correlation between individuals’ social preferences and individuals’ beliefs about their partner’s behavior in a trust game.

Here, we used well-validated self-report measures from personality psychology to identify an antisocial personality profile that shows a systematic correlation between the beliefs of antisocial individuals and their behaviors. Moreover, no current theory of social preferences (in which pure selfishness is a special case) seems to be able to account for the belief–behavior patterns of the antisocial individuals. Antisocial individuals have high positive loadings on Machiavellianism and high negative loadings on empathy, trustworthiness, and agreeableness. Antisocial investors in the NPT believe that their agents’ will be considerably less likely to honor their trust compared with investors with low antisociality. Accordingly, highly antisocial investors also exhibit less behavioral trust than prosocial investors. Interestingly, however, if investors can punish their agents, highly antisocial investors respond to the punishment option with their beliefs and transfers much more strongly than prosocial investors: they become much more optimistic about their agents’ back transfers, and they exhibit much more behavioral trust relative to a situation without a punishment option.

Why do antisocial investors respond so differently to the existence of a punishment option? A plausible reason is that they take their own behavioral response to the punishment option into account and assume that other individuals—their agents—respond like they do. We observe, in fact, that antisocial individuals in the role of agents respond much more strongly to the punishment option by increasing their back transfers relative to a situation without punishment. Thus, when antisocial investors put themselves into their agents’ shoes and take their own likely response to the punishment option into account when predicting their agents’ back transfers, they should become more optimistic, and they have reason to show more behavioral trust.

However, why do antisocial agents respond so strongly to the presence of a punishment option? Again, a plausible reason is that antisocial agents may introspect into how they would punish agents if they were in the role of an investor who could punish. In fact, antisocial investors indeed punish agents who provide low back transfers much more severely compared with more prosocial investors, and they do so not in a “hot” state after their trust has actually been betrayed but in a “cold” state, in which they assign their sanctions to each possible back-transfer level ex ante (i.e., before they know their agent’s back transfer). Therefore, if antisocial agents project their own harsh sanction—if they were an investor—to their actual investors, it makes sense for them to respond more strongly to the punishment option by raising their back transfers. The overall picture that emerges is thus consistent with the idea that highly antisocial individuals believe that their partners in the trust game will behave similarly to how they themselves would in the other role.

No economic theory of social preferences predicts such a correlation between what antisocial individuals believe and the preferences that antisocial individuals reveal in the NPT and the PT. Note that a clean identification of behavioral preferences is only possible for agents in the NPT and for the investors at the punishment stage of the PT, because the respective players make the last move in the game in these situations, and their behavior, therefore, does not depend on beliefs about their opponents’ responses but only on their preferences.

These behavioral data clearly show that antisocial individuals are not simply selfish, because they still show significantly positive back transfers if the investor transfers CHF 10. They spend a lot of resources on the sanctioning of those agents who make low back transfers, although they derive no pecuniary benefit from this. Antisocial individuals are less trustworthy and less willing to honor others’ trust, but they are not complete defectors. These data also imply that antisocial individuals do not simply have envious or spiteful preferences in the sense that they unconditionally value the other players’ payoffs negatively, because such preferences would imply unconditional back transfers of zero in the trust game without punishment, and they would be hard to reconcile with the fact that antisocial individuals condition their sanctions on the agents’ back-transfer levels. Individuals who are simply envious or spiteful would always—regardless of the agents’ back transfer—exploit the opportunity to reduce others’ material payoffs. The behavioral preferences revealed by the agents in the NPT are consistent with weak preferences for reciprocity (20, 23, 24) or a weak aversion against advantageous inequality (21). In contrast, the behavior of antisocial investors at the punishment stage is consistent with a strong preference for negative reciprocity (20, 23, 24) or a strong aversion against disadvantageous inequality (21). However, neither theories of reciprocity nor the theory of inequity aversion explain why these antisocial individuals seem to have quite different beliefs compared with less antisocial individuals. Nevertheless, their belief–behavior pattern is coherent and makes sense if these individuals assume that most others are similar to themselves (i.e., exhibit a low willingness to honor others’ trust but a high willingness to punish others if their trust is not honored). In fact, this process of simulating one’s own thoughts, feelings, and intentions within a hypothetical scenario to make predictions about others’ behavior is referred to as self-projection (33), and there is considerable support from social neuroeconomics that investors utilize the neural processes that enable self-projection when making decisions in trust and similar games (34 ⇓ –36).

The more general lesson from our research is perhaps that beliefs may be a property of the individual as much as preferences are and that certain belief–behavior patterns may be associated with certain personality characteristics. The psychology of personality traits may thus help in constraining the assumptions that one can or should make about what people believe about others. In addition, our research shows that variations in personality can be as important as variations in “the situation” and that important interactions between personality characteristics and situational features exist (2, 19, 25 ⇓ –27).


The Concept in Psychology

Self-compassion, according to Kristen Neff, a self-compassion researcher, has three main elements:

    Self-kindness or having the ability to refrain from harsh criticism.

Self-compassion is often intertwined with self-esteem, but they really are two distinct concepts. Self-compassion is more about self-acceptance and self-esteem focuses on favorable self-evaluation, especially for achievements, according to Neff.

Self-compassion is not dependent on social comparisons or personal success. It’s more about recognizing and accepting your flaws, which is a process that often leads to growth and personal development.


The Impact of Trust on the Bottom Line

The quantitative results of a trust-based culture were remarkable. Zak concluded that those working in high-trust cultures:

  • Enjoyed their jobs 60% more
  • Were 70% more aligned with their companies' purpose
  • Felt 66% closer to their colleagues
  • Had 11% more empathy for their workmates,
  • Experienced 40% less burnout from their work
  • Earn an additional $6,450 a year, or 17% more than those working at low-trust organizations

Science has spoken. Trust is no longer optional for organizations that want to attract and retain the best people and want to achieve the best results.


Empathy and perspective taking: How social skills are built

Understanding what other people want, how they feel, and how they see the world is becoming increasingly important in our complex, globalised society. Social skills enable us to make friends and create a network of people who support us. But not everyone finds it easy to interact with other people. One of the main reasons is that two of the most important social skills -- empathy, i.e. being able to empathise with the other person's emotions, and the ability to take a perspective, i.e. being able to gain an information by adopting another person's point of view -- are developed to different degrees.

Researchers have long been trying to find out what helps one to understand others. The more you know about these two social skills, the better you can help people to form social relationships. However, it still not exactly clear what empathy and perspective taking are (the latter is also known as "theory of mind"). Being able to read a person's emotions through their eyes, understand a funny story, or interpret the action of another person -- in everyday life there are always social situations that require these two important abilities. However, they each require a combination of different individual subordinate skills. If it is necessary to interpret looks and facial expressions in one situation, in another it may be necessary to think along with the cultural background of the narrator or to know his or her current needs.

To date, countless studies have been conducted that examine empathy and perspective taking as a whole. However, it has not yet been clarified what constitutes the core of both competencies and where in the brain their bases lie. Philipp Kanske, former MPI CBS research group leader and currently professor at the TU Dresden, together with Matthias Schurz from the Donders Institute in Nijmegen, Netherlands, and an international team of researchers, have now developed a comprehensive explanatory model.

"Both of these abilities are processed in the brain by a 'main network' specialised in empathy or changing perspective, which is activated in every social situation. But, depending on the situation, it also involves additional networks," Kanske explains, referring to the results of the study, which has just been published in the journal Psychological Bulletin. If we read the thoughts and feelings of others, for example, from their eyes, other additional regions are involved than if we deduce them from their actions or from a narrative. "The brain is thus able to react very flexibly to individual requirements."

For empathy, a main network that can recognise acutely significant situations, for example, by processing fear, works together with additional specialised regions, for example, for face or speech recognition. When changing perspective, in turn, the regions that are also used for remembering the past or fantasising about the future, i.e., for thoughts that deal with things that cannot be observed at the moment, are active as the core network. Here too, additional brain regions are switched on in each concrete situation.

Through their analyses, the researchers have also found out that particularly complex social problems require a combination of empathy and a change of perspective. People who are particularly competent socially seem to view the other person in both ways -- on the basis of feelings and on the basis of thoughts. In their judgement, they then find the right balance between the two.

"Our analysis also shows, however, that a lack of one of the two social skills can also mean that not this skill as a whole is limited. It may be that only a certain factor is affected, such as understanding facial expressions or speech melody," adds Kanske. A single test is therefore not sufficient to certify a person's lack of social skills. Rather, there must be a series of tests to actually assess them as having little empathy, or as being unable to take the other person's point of view.

The scientists have investigated these relationships by means of a large-scale meta-analysis. They identified, on the one hand, commonalities in the MRI pattern of the 188 individual studies examined when the participants used empathy or perspective taking. This allowed the localisation of the core regions in the brain for each of the two social skills. However, results also indicated how the MRI patterns differed depending on the specific task and, therefore, which additional brain regions were used.