Here is a TED talk given in Athens, Greece in Dec. 2011. Rory Sutherland is a colorful, creative fellow who humorously weaves his way through several examples of why businesses–really any organizational entity in the public or private sector that deals with the public, especially with regard to their wallets and how their money (and even their time) is spent–need to understand that the solutions they offer to their customers, clients and patrons or constituents, whether it be to save them time, money or to help them attain some other tangible or intangible benefit, must be a combination of technology, psychology and economics.
The blending of these three seemingly disparate areas of human endeavor into what Sutherland calls a “sweet spot” where they intersect, is based on the idea that perception affects value.
People will pay for what they perceive to be valuable, and they will pay more for what they perceive to be more valuable. And, rightly understood, economics (he mentions Austrian economics and Ludwig von Mises) is as much a study of human behavior and psychology as it is a scientific, rational analysis of markets and consumers based on an engineering model seeking only logical, numerical solutions.
Marketing and advertising that understands and identifies what its customers place a higher value on–and how much they’re willing to pay for it–will do much better than marketing and advertising that doesn’t.