Lynne Kiesling
This video of a talk from British marketing expert Rory Sutherland is well worth 27 minutes of your time, especially if you are in any way associated with the electricity industry or its regulation. He uses insights from Ludwig von Mises to explain how human subjective and contextual valuation of alternatives can help businesses and governments make better decisions.
[youtube=http://www.youtube.com/watch?feature=player_embedded&v=P1mOsHFXZFA]
Why do I recommend his talk particularly to my electricity colleagues? Because Sutherland draws a poignant contrast between an engineering approach and a psychological approach to consumer value propositions. He does a great job of explaining why value is subjective and contextual and is not determined by the inputs or the costs associated with producing something. Value is a function of context and perception. Electricity has been so regulated and so dominated by the cost-based engineering approach to production that it has no experience having to think about that fact and incorporate it into business models in the industry. Sutherland helps us to think differently.
Thanks to Sam Bowman at the Adam Smith Institute for the link.
Very cool. I am reading Ariely “Predictably Irrational” right now and he covers many of the same effects; this should be required reading/viewing for economics students — AND professors!