There is a lot to learn from behavioural economy when it comes to designing learning experiences that will truly have an impact on behaviour and performance.

Our experiences and interaction with the environment and people around us shape our behaviour. This change in behaviour is what we refer to as learning. But what if we don’t remember these experiences? Is this the experience itself that affects our decisions and behaviour or is it what we remember from the experience that matters most?

To better design learning experiences, we need to have a good understanding of what affects people’s decision making and judgments.

Imagine these two scenarios:

1. You are asked to hold your hand up to the wrist in painfully cold water for 60 seconds. After 60 seconds you will have a warm towel to dry your hands.
2. You are asked to hold your hand up to the wrist in painfully cold water for 60 seconds. After 60 seconds some slightly warm water flows into to the tub for 30 seconds. So in the last 30 seconds your hands feel a bit less painful.

Imagine you have experienced both these scenarios. Which one would you choose to do again if you had to?

This is an experiment that Daniel Kahneman and his colleagues designed to demonstrate the power of memories vs experience when it comes to decision making. You can read the full experiment in Daniel Kahneman’s book ‘Thinking fast and slow‘. In their experiment, 80% of the participants chose to repeat the second scenario despite the fact that they would suffer 30 seconds of more pain. This and other experiments designed by Kahneman show that it is NOT the experience itself but the memory of the experience that can significantly impact the decisions we make.