Market Research is all about trying to predict the future. But predicting the future is getting tougher, some suggest, as we get more irrational.
Many look to the past as a guide for the future, but as Henry Kaufman put in the Wall Street Journal, quoting Mark Twain, "History doesn't repeat itself, but it does rhyme."
The stock market was tumbling in anticipation of a US debt default, once the deal was announced the market opened 150 points up (as predicted) and ended 10 points down (as no one predicted). The day the Senate sealed the deal the market dropped 265 points on worries the world economy just isn't that healthy.
Everyone in the business of business wants certainty, the unattainable edge, and it's becoming more unattainable as we realize how irrational consumer behavior actually is. Dan Arielly and others have made a career out of it, proving irrational behavior is just human nature.
Economists and politicians, Kaufman explains, are "heavily influenced by behavioral biases," adding that there is a bias against negative predictions. "No president, chairman of the Council of Economic Advisers, Secretary of the Treasury, or chairman of the Federal Reserve has ever forecast a recession," he writes.
Do we want certainty? Honesty? Predictability? History?
The market research field continues to improve helping businesses find a safe, if bold course. Taking into account the irrationality of behavior, however, is becoming an important ingredient in this mix.
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