New research by Ahreum Maeng, an assistant professor in the KU School of Business, finds that socially crowded environments lead consumers to be more conservative. Specifically, Maeng finds that consumers in crowded settings prefer safety-oriented options and are more receptive to prevention-framed messages than promotional messages — for example, preferring a toothpaste offering cavity protection over a toothpaste promising a whiter smile. Maeng also finds consumers in crowded settings are less willing to make risky investments.
“Consumers in crowded environments get conservative and safety-focused,” Maeng said. “We believe this is because people in socially crowded settings activate an avoidance system that results in a more prevention-focused mindset. This, in turn, makes socially crowded individuals more likely to choose options that provide prevention-focused benefits.”
Maeng points out that the research has important implications for retailers as well as policymakers. “For example, our findings indicate a store would benefit by selling and marketing products differently on a crowded Saturday during the holidays versus a Tuesday morning in August,” she says. “And even within the same day, stores might consider changing their signage or product placement to account for different levels of crowding.”
Members of the public are being encouraged to take on the Bank of England by betting on the U.K.’s future inflation and unemployment rates.
Free-market think tank the Adam Smith Institute on Wednesday launched two betting markets in an attempt to use the “wisdom of crowds” to beat the Bank of England’s official forecasters. Punters can place bets on what the rate of both U.K. inflation and unemployment will be on June 1, 2015.
Sam Bowman, the research director of the Adam Smith Institute, believes the new markets will “out-predict” official Bank of England predictions. “If these markets catch on, the government should consider outsourcing all of its forecasts to prediction markets instead of expert forecasters,” he said.
I recently read an engaging book on the use of crowds and crowd-based intelligence for generating innovation. Shaun Abrahamson is one of the authors of Crowdstorm: The Future of Innovation, Ideas, and Problem Solving.
I have to admit that I am not a big believer in leveraging crowds for change—I think there is a fetish of the role that masses play in idea formation. I do believe that intelligence is distributed, but I’m an old-fashioned proponent of formal organizations.
But after reading Shaun’s book, I changed some of my stubborn views. The book is a systematic (and critical) appraisal of the role that crowds can play in diverse organizational and personal settings. I think Freakonomics readers might benefit from hearing Shaun’s insights.
Q. Aristotle said that every new idea builds on something earlier by hiding/transforming it. What’s old and what’s “new” in crowdstorming?
A. The main newness is the identification of patterns for finding and evaluating ideas. More specifically the identification of patterns that seem to deliver good or better results than if we were to working with smaller groups of people. Read More »
Reader Noah Dentzel claims that crowdfunding has overlooked virtues, and that it is giving rise to products that may never have happened via the traditional business model:
Most companies either a) raise money through traditional financing avenues or b) build a business slowly and invest first and then bring a new product to market. Crowdfunding allowed us to do everything backwards: by pre-selling a product before the tooling for it even exists, we get a good feeling for market demand and we then gain a clear picture of whether or not to move forward.
Meanwhile, because companies like us are financed through consumers (pre-selling), it’s essentially consumer driven business growth and innovation. We don’t have to wait around for angels or VCs, we can allow anyone from around the world (and a good third of our orders are from overseas) to invest in new ideas, new businesses and whatever will be crowdfunded next. What’s also pretty cool is that we’re making this product right here in California which isn’t too typical for a consumer electronic device these days. People ask why we’re not doing it in China and I just tell them that both in terms of quality and cost, we couldn’t afford it if we wanted to–these are some of the twists and turns that you see in the Crowdfunding consumer product long tail of manufacturing.
Season 2, Episode 2
We have just released a series of five one-hour Freakonomics Radio specials to public-radio stations across the country (check here to find your local station), and now they’re hitting our podcast stream as well. If you are a dedicated podcast subscriber, then some of this material will be familiar to you. These new shows are what might best be called “mashupdates” — that is, mashups of earlier podcasts that have also been updated with new interviews, etc.
The following is a cross-post from NFL.com, where we’ve recently launched a Football Freakonomics Project.
Do home teams really have an advantage?
Absolutely. In their book Scorecasting, Toby Moscowitz and Jon Wertheim helpfully compile the percentage of home games won by teams in all the major sports. Some data sets go back further than others (MLB figures are since 1903; NFL figures are “only” from 1966, and MLS since 2002), but they are all large enough to be conclusive:
|League||Home Games Won|
But why does that advantage exist? There are a lot of theories to consider, including: “sleeping in your own bed” and “eating home cooking”, better familiarity with the home field/court, and crowd support. Read More »