Saturday, February 24, 2007

Behavioural Economics

An interesting little lesson in behavioural economics here:

People will not give money if they are thanked in advance or presented with an empty donation box, but will dig deep if they see banknotes, according to a study by New Zealand academics released on Wednesday.

The research by Victoria University of Wellington's economics department showed that how much is already in a donation box, the mix of coins and notes, and what sorts of signs are present will influence how generous the public will be.

The behavior of people faced with a clear donation box at the entrance to the city's art gallery was filmed by a hidden camera.

"The most important thing is to never leave the box empty," said senior lecturer John Randal.

"But it is also important to ensure there is a balance of notes and coins so that whether people want to make a large or small donation, that they feel it is appropriate to do so."

You've got to provide people with the correct impressions: No money means that no one else has given, coins only means that no one gives generously, no coins means that the Widow's Mite is not socially acceptable and a box stuffed with money means that lots has already been given.

People sure can be complicated, eh?

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