Smart Business | Understanding the psychology of why people buy | Behavioral Economics - 290. Finding Balance in a Derived World: Nir Eyal's Guide to Traction and Productivity at Stitcher (2023)

56 minutes 23. May 2023

290. Finding Balance in a Derivative World: Nir Eyal's Guide to Traction and Productivity

Dealing with distractions is an everyday challenge for many professionals. Traction is the force that propels us towards our goals and objectives and keeps us focused on the things that really matter. To avoid distractions, it's important to create a plan that outlines the steps needed to succeed. This includes setting clear goals and breaking them down into manageable tasks, while also setting aside specific time for relaxation or personal enjoyment. In this way, people can achieve a balanced life that promotes productivity and happiness. During this conversation with host Melina Palmer, Nir Eyal emphasized the importance of the distinction between distraction and traction. Contrary to popular belief, the opposite of distraction isn't focus, it's traction. Eyal explained that distraction is anything that takes us away from our true goals, while traction is anything that brings us closer to achieving those goals. He challenged listeners to create schedules that align with their values, stick to them, and make sure they take the time they need and focus on what really matters. Improve focus by getting traction and structured planning to minimize distractions. Use technology with the intention of maximizing productivity and enriching personal experiences. Overcome internal triggers by understanding the nature of discomfort and controlling impulses. Create value-based schedules to strengthen time management and improve focus. Use tactical tools and approaches to curb the impact of digital distractions. Program Notes: 00:00:00 - Intro introduces Melina Palmer to the episode and guest Nir Eyal, a behavior designer. He talks about how Nir's book Indistractable helps people overcome distractions and be more productive. 00:04:30 - Personal reason for writing "Indistractable", Nir Eyal shares his personal reason for writing "Indistractable". She tells how she was distracted by her phone while spending time with her daughter. Through research and personal testing, he realized the problem went much deeper than just the technology. He decided to investigate the cause of the distraction and find an answer that actually worked. 00:09:40 - Distraction is an old problem. Nir talks about how distraction is not a new problem and has been with us for at least 2,500 years. He explains that people have always blamed various forms of entertainment and technology to distract them, and that it is lazy to blame technology for distraction without understanding the cause. 00:11:14 - The opposite of distraction is traction. Nir Eyal explains that the opposite of distraction is not focus, but traction. He defines traction as any action that pushes you toward what you want to do, and distraction as any action that distracts you from what you want to do. He emphasizes the importance of understanding the difference between the two. 00:12:27 - Tools to find balance, Nir Eyal talks about the importance of balance when using technology. He gives some tips and tricks that anyone can help with. 00:13:47 - Nir Eyal understands distraction and traction and explains that distraction is anything that distracts us from what we intend to do and anything can be a distraction. On the contrary, everything can resonate if we take the time to plan it according to our values. Becoming indistractable means living with personal integrity and knowing why we got distracted. 00:18:28 - The root cause of distraction, Eyal identifies the root cause of distraction as our inability to deal with discomfort in a healthy way. We use distraction as psychological calming and as an escape from uncomfortable emotions. In order not to be distracted, we must first learn how to deal with ailments in a healthy way, either by addressing the cause of the ailment or by finding ways to deal with it. 00:19:48 - Human motivation, Nir explains that human motivation is not about seeking pleasure and avoiding pain, but about being stimulated by discomfort. We have two neural circuits, the taste system and the desire system. The purpose of the wool system is to make us uncomfortable when trading. Time management is pain management, and to master distractions we must first master internal triggers. 00:22:21 - Time management and addiction, addiction isn't just about substances or behavior, it's more about our need to escape discomfort. We need to address the cause of the discomfort or learn to deal with it in a healthier way. Eyal tells the story of Dr. Zoe Chance who became temporarily addicted to her pedometer as she used it to escape her life. 00:27:21 - The development of the inner triggers, evolution, has constantly upset us and programmed us for things like hedonic adaptation, rumination and boredom that make us strive for more. We are not designed by evolution to be content, but rather to strive, seek, want and demand what has moved our species forward. The idea is to channel these uncomfortable feelings into traction rather than distraction. 00:29:21 - When we rethink mentality and temptation, our brains are wired for mentality problems and we need to rethink our temperament to avoid being distracted. When we have a problem, we need to understand the cause and shift our mindset to traction rather than distraction. We can reimagine the task, the trigger, or our temperament to overcome internal triggers, which is critical for not getting distracted. 00:32:00 - The nuances of technological distractions, our relationship to technology and other distractions is a differentiated discussion. Everything has unintended benefits and weaknesses, and it's important to take a closer look. We need to understand the good things that happened, not just the negative ones. If something doesn't serve us, we should switch off and purposefully use what we want. 00:35:23 - The story behind the moral panic Every moral panic over the years has had a scapegoat, and this time it was the technological distraction. Believing theories without scientific support is dangerous, leading to learned helplessness. The evidence is sparse and the story is much more nuanced. 00:41:33 - Why We Don't Need To Be Distracted, Nir Eyal talks about how constant interruptions from Facebook and news feeds distract us and how hacking into our phones and offices can help us not be distracted. 00:42:14 - Where coworker distractions come from, Eyal discusses how coworker distractions in open offices can hinder work progress and how a simple, explicit message can help. 00:43:10 - The role of upfront commitments, Eyal explains how upfront commitments can help avoid distractions and promote personal integrity. 00:48:29 - The antidote to impulsiveness. Eyal emphasizes that the antidote to impulsiveness is foresight and how to use our ability to see the future to plan for the future. 00:50:08 - Conclusion, Melina's main thoughts from the conversation. What did you remember while listening to the episode? what are you going to try Share it with Melina on social networks. You can find her everywhere as @thebrainybiz and as Melina Palmer on LinkedIn. Thanks for your time. Don't forget to subscribe to Apple Podcasts or Android. If you like what you heard, leave a review on iTunes and share what you liked about the show. I hope you enjoy everything recommended by The Brainy Business! Everything is independently reviewed and curated by me, Melina Palmer. So as an Amazon Associate, I earn on qualifying purchases. This means that The Brainy Business may receive a share of the sale or other compensation if you decide to make a purchase using the links on this page. Let's connect: The Brainy Business® on Facebook The Brainy Business on Twitter The Brainy Business on Instagram The Brainy Business on LinkedIn Melina on LinkedIn The Brainy Business on Youtube Join BE Thoughtful Revolution, our free behavioral economics community and stay tuned The conversation continues! Meet and support The Brainy Business - come by and get your copies of Melina's books. Download the books featured in this episode: Indistractable by Nir Eyal Hooked by Nir Eyal Influence is Your Superpower by Zoe Chance What Your Customer Wants and Can't Tell You by Melina Palmer What Your Employees Need and Can't Tell You by Melina Palmer Connect with Nir: Nir on Twitter Nir on LinkedIn Featured Tops Next Episode: Influence Is Your Superpower, by Zoe Chance Did You Hear? Try the following: Availability Habits The Power of Habits Setting Smart Goals, Reaching and Achieving Tips to Overcome Impostor Syndrome Finding Motivated Resolutions and Keeping Commitments Hearing Organize Your Brain with Behavioral Economics Bicycle Breakdown Planning Error Temptation Bundling Other Links Important: Brainy Bites - Melina's LinkedIn Newsletter 3 ways to limit everyday distractions How this year's Nobel Prize-winning economic research can help your business

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What is the behavioral economic theory? ›

Behavioral economics combines elements of economics and psychology to understand how and why people behave the way they do in the real world. It differs from neoclassical economics, which assumes that most people have well-defined preferences and make well-informed, self-interested decisions based on those preferences.

What are examples of behavioral economics? ›

Examples of behavioral economics
  • Example #1: Playing sports. Principle: Hot-Hand Fallacy—the belief that a person who experiences success with a random event has a greater probability of further success in additional attempts. ...
  • Example #2: Taking an exam. ...
  • Example #4: Playing slots. ...
  • Example #5: Taking work supplies.
Mar 16, 2018

How do behavioral economists view people differently than traditional economists? ›

Behavioral economics combines psychology and economic theory to examine why people sometimes make irrational decisions. Behavioral economists understand that humans are emotional, easily distracted by the modern world, and susceptible to outside influences.

What is the difference between behavioral economics and psychology? ›

Both behavioral economics and psychology refer to the dispositions, emotions, and decision-making of individuals. Behavior economics is a much more niche field that studies the financial decision-making of an individual, while psychology may cover any aspect of human rationality.

How does economics affect human behavior? ›

Key Takeaways. Economic theory tries to understand human action as it relates to prices, markets, production, and consumption. Mainstream economic theory rests on "laws" like supply and demand, and assumptions that include rational actors and efficient markets.

What are the 3 principles of economics? ›

The essence of economics can be reduced to three basic principles: scarcity, efficiency, and sovereignty. These principles were not created by economists. They are basic principles of human behavior. These principles exist regardless of whether individuals live in market economies or planned economies.

What is the relationship between psychology and economics? ›

Economic psychology is the interdisciplinary investigation of the interface between psychology and economics. It is concerned with the psychological basis of the economic behaviors of individuals, and the impacts of economic processes on individuals' psychology.

How do companies use behavioral economics? ›

For example, an online store could offer a $399 coat that's been marked down to $99, creating the idea that an expensive—and therefore more desirable—coat is now a great buy. Using these insights from behavioral economics can help marketers nurture positive consumer relationships and drive company growth.

How is behavioral economics used today? ›

Behavioral economic theories are used to explain most everyday decisions, such as what people buy, how they manage their finances, and whether or not they make healthy lifestyle choices.

What is nudge theory in economics? ›

Nudge theory is a concept in behavioral economics, decision making, behavioral policy, social psychology, consumer behavior, and related behavioral sciences that proposes adaptive designs of the decision environment (choice architecture) as ways to influence the behavior and decision-making of groups or individuals.

How do economists assume people behave? ›

Economists assume that individuals make choices that seek to maximize the value of some objective, and that they define their objectives in terms of their own self-interest. Individuals maximize by deciding whether to do a little more or a little less of something.

What is an example of an irrational economic behavior? ›

Different types of irrational behaviour

For example, if shares rise and people see an increase in wealth, this may encourage them to keep buying more. If prices rise above their long-term value, we can think 'this time is different', and perhaps there is some reason for the increased value of shares.

Does behavioral economics focus on the effects of psychological? ›

Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors in the decisions of individuals or institutions, and how these decisions deviate from those implied by classical economic theory.

Which is hard psychology or economics? ›

It'll be hard to stand out in a sea of psychology graduates all offering the same thing. Economics is more challenging in my personal opinion, and is incredibly useful. It can lead to so many fields and to a very successful, rewarding career.

What does behavioral economics have to do with cognitive psychology? ›

The starting point is “behavioral economics,” also known as the “heuristics and biases” subfield of cognitive psychology. It's associated with various studies of cognitive illusions, settings where people systematically mispredict uncertain events or make decisions.

How does economics impact your mental health? ›

The importance of socioeconomic factors for mental health

Experience of socioeconomic disadvantage, including unemployment, low income, poverty, debt and poor housing, is consistently associated with poorer mental health (Silva et al., 2016; Elliott, 2016; Platt et al., 2017; Friedli, 2009, Rogers and Pilgrim, 2010).

How do economic factors affect personality? ›

2.3.3 Economic Factors

Besides you might have seen that often children from low income groups have low self- confidence, feelings of inferiority and shyness. Economic condition determines access to opportunities to develop personality.

How does economics affect your personal life? ›

Social and economic factors affect how well and how long we live. Social and economic factors include factors such as income, education, employment, community safety and social support. The choices that are available in a community are impacted by social and economic factors.

What are the 4 key elements of economics? ›

Economists define four factors of production: land, labor, capital and entrepreneurship. These can be considered the building blocks of an economy.

What are the 4 basics of economics? ›

Four key economic concepts—scarcity, supply and demand, costs and benefits, and incentives—can help explain many decisions that humans make.

What are the 4 rules of economics? ›

The four principles of economic decisionmaking are: (1) people face tradeoffs; (2) the cost of something is what you give up to get it; (3) rational people think at the margin; and (4) people respond to incentives.

Which psychological factors affect economics? ›

Economic theories have traditionally acknowledged psychological factors in saving such as self-control, fear of economic uncertainty and pessimism about the economy.

Who is the father of economics psychology? ›

Adam Smith was an 18th-century Scottish philosopher. He is considered the father of modern economics.

Why is economics important in psychology? ›

Essentially, psychology helps people in large part because it can explain why people act the way they do. With this kind of professional insight, a psychologist can help people improve their decision making, stress management and behavior based on understanding past behavior to better predict future behavior.

How does economics play a role in business? ›

Every business also operates within the economy. Based on their economic expectations, businesses decide what products to produce, how to price them, how many people to employ, how much to pay these employees, how much to expand the business, and so on. Economics has two main subareas.

What companies use Behavioural economics? ›

  • Lemonade – making insurance more human by using BE. ...
  • Manulife – behavioral education about how people think of money. ...
  • Tinder – using BE from end to end. ...
  • Orangetheory – selling fitness through gamification.

What is the consumer behavior in economics? ›

Consumer behavior encompasses mental and physical activities that consumers engage in when searching for, evaluating, purchasing, and using products and services. In the marketplace, consumers exchange their scarce resources (including money, time, and effort) for items of value.

What is the most famous behavioral economics experiment? ›

A specific set of motivations that behavioral economists have spent a lot of time exploring are the social motivations and these are illustrated most extensively in what is possibly the most famous behavioral experimental game: the Ultimatum Game, devised by Werner Güth and colleagues (Güth et al., 1982).

What are the strengths of behavioral economics? ›

Behavioral economics research can help us better comprehend anomalies in consumer choices and better understand human behavior, preferences, and cognitive errors. Behavioral economics is used in various industries to understand consumer behavior better.

What is an example of a nudge in economics? ›

Examples of nudges

Often it is 'drinks, extras and deserts' which are the most profitable part of the meal. If you buy a coffee, and a barista offers a pastry as well – we are more likely to buy the pasty when it is offered as a suggestion.

What is framing economics? ›

In behavioral economics, framing effect refers to the principle that information is not static, but fluid based on how, when and where it is communicated. In other words, people's decisions tend to be affected by the way in which the choices are framed through copywriting, imagery, tone, pricing and placement.

What is anchoring in economics? ›

Anchoring is a behavioral finance term to describe an irrational bias towards an arbitrary benchmark figure. This benchmark then skews decision-making regarding a security by market participants, such as when to sell the investment.

What is the default choice in economics? ›

The default choice or default option is the option that a consumer “selects” if he or she does nothing. Studies have shown that consumers rarely change the default settings. So, the nature of the default option strongly affects consumer behaviour.

What is the most fundamental economic problem? ›

The fundamental economic problem faced by all societies is Scarcity. The economic resources are insufficient to satisfy human wants and needs. Human wants are unlimited, but the means to satisfy human wants are limited. Scarcity affect the economic growth of the country.

What personality do economists have? ›

Economists score highly on openness, which means they are usually curious, imaginative, and value variety. They also tend to be high on the measure of conscientiousness, which means that they are methodical, reliable, and generally plan out things in advance.

What do economists assume about human wants? ›

Economists typically assume human wants and needs are limitless.

What causes irrational behaviour? ›

Some other causes of irrational thoughts may include: Poor self-esteem. Past traumatic experiences. Bullying or being treated unkindly by others.

What is irrational behavior in psychology? ›

n. the state, condition, or quality of lacking rational thought. The term is typically used in relation to cognitive behavior (e.g., thinking, decision making) that is illogical or delusional.

What is irrational behaviour of consumers? ›

Summary: The irrational consumer refers to situations in which consumers' actual behaviors don't match the rational approach to decision making. We should consider various approaches to uncover the drivers of such behaviors.

What is the difference between the economic theory and the behavioral theory? ›

Unlike classical economic theory, which assumes that people are rational and able to make decisions based on self-interest and information, behavioral economics focuses on the psychology behind irrational decisions.

What is behavioral economics in healthcare? ›

Insight into people's irrational choices can improve healthcare. Advertisement. Behavioral economics is the study of how individuals analyze economic choices and make decisions. It recognizes that they are not the rational, reasoned people described in classic supply-and-demand economic theory.

What is the definition of behavioral economics quizlet? ›

Behavioral economics: the study of irrational decision making attempts to integrate psychological theories, the motivation behind our choices with economic theories, what we actually do.

Why is behavioral economics important? ›

Why study behavioral economics? Behavioral economics research can help us better comprehend anomalies in consumer choices and better understand human behavior, preferences, and cognitive errors. Behavioral economics is used in various industries to understand consumer behavior better.

What are the three different types of behavioral theories? ›

The most-often used theories of health behavior are Social Cognitive Theory, The Transtheoretical Model/Stages of Change, the Health Belief Model, and the Theory of Planned Behavior.

What are the two different approaches to economic theory? ›

Positive economics and normative economics are two standard branches of modern economics. Positive economics describes and explains various economic phenomena, while normative economics focuses on the value of economic fairness or what the economy should be.

What does Behavioural economics teaches? ›

Behavioral economics studies how individual, social, cognitive and emotional biases influence economic decisions.

Why is behavioral economics important in public health? ›

Behavioral economics provides an empirically informed perspective on how individuals make decisions, including the important realization that even subtle features of the environment can have meaningful impacts on behavior.

What does behavioral economics ultimately focus on? ›

Behavioral economics studies how individuals behave, and how thinking and emotions affect individual decision-making. By adding insights from psychology, behavioral economics tries to modify the conventional economic approach, and to analyze how “flesh-and-blood” people act in social contexts.

What is economics that studies the behavior of individual consumer called as? ›

microeconomics, branch of economics that studies the behaviour of individual consumers and firms.

Which branch of economics focuses on the behavior of the entire economy? ›

Definition: Macroeconomics is the branch of economics that studies the behavior and performance of an economy as a whole. It focuses on the aggregate changes in the economy such as unemployment, growth rate, gross domestic product and inflation.

What is the rule of thumb in economics? ›

A rule of thumb is an informal piece of practical advice providing simplified rules what apply in most situations. There are many rules of thumb in finance that give guidance on how much to save, how much to pay for a house, where to invest, and so on.

How do people make decisions in economics? ›

The four principles of economic decisionmaking are: (1) people face tradeoffs; (2) the cost of something is what you give up to get it; (3) rational people think at the margin; and (4) people respond to incentives.


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