Secrets of the Moneylab: How Behavioral Economics Can Improve Your Business

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Penguin, Sep 2, 2010 - Business & Economics - 256 pages
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Taking the findings of behavioral economics from the cocktail party to the boardroom.

Experimental economist Kay-Yut Chen leads an economics lab at Hewlett- Packard-the first of its kind at any company. His groundbreaking research into human behavior has turned into tangible results for HP. He has saved the company millions of dollars, simply by explaining why people really do the things they do. MoneyLab offers practical lessons being put to use right now at HP and other leading companies. It explains, for instance, how to:

? Use incentives to influence employees, suppliers, and buyers
? Determine whom to trust, and how much
? Reduce the negative effects of irrational behavior by noticing patterns that don't seem logical
? Take advantage of the human tendency to game the system

In the spirit of Predictably Irrational, but with a more practical approach, Chen shows how to translate the findings of behavioral economics into concrete actions to achieve new levels of success.

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good book. must have one


Learning from Mistakes the Easy Way
About Our Approach
How to Read This Book
Risk AvoiderWho Me?
Variance Can Kill
Risk Pooling and Risk Spreading
Transferring Risk
Insurance in Disguise
Rubbing Off Selling and Selling Out
Reputations as SelfFulfilling Prophecies
Improving the System
Reputations Downsides
The Trust Game
Trust and Prosperity
Aspects of Trust
The Force of Incentives

Beware Moral Hazard and Adverse Selection
Beyond Risk Aversion
Paying for Fairness
The Dictator Game
Fairness in Pricing
Sometimes Fair Sometimes Foul
Fairness Isnt Everything
In the Lab
In the Field
The Thought That Counts
First the Carrot
Reciprocity on Behalf of Others
The Escalation of Conflict
StockingThe Curious Gazette
Choosing Your Secretary
The Bullwhip Effect and the Beer Game
The Optimizers Paradox
An Example from HP
Contracting with the Fallible
Measuring Someones Rationality
The Value Proposition
Reputations Payoff
The Glue of Markets
Reputation to the Rescue
How and Why Reputation Works
Reputational Erosion
The Danger of Exploitation
Reputations and Reality
The Transparency Effect
Trust in Different Cultures
The Distrust Penalty
Untangling Trust Trustworthiness and Reciprocity
Incentives and Warranties
Costly Signals
Nothing Lasts Forever
The Nick of Time
When Timing Is Everything
Getting People to Follow the MAP
Guesstimation and Number Crunching
Tapping into Collective Intelligence
A Twist on Prediction Markets
When Prediction Markets Fail
The BRAIN Method
A Cautionary Tale
The Incentive Approach to Intentions
The Scientist in You
Chapter 1 Capitalizing on Uncertainty
Chapter 2 Fairs Fair
Chapter 5 Reputation Reputation Reputation
Chapter 6 In Whom We Trust
Chapter 7 Playing to the Rules of the Game
Chapter 8 Predicting the Unpredictable

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