Updated: Nov 15
Choice architecture and behavior economics help people make great decisions. Wedding and event planning is near the top of the list of complex decisions benefiting from choice architecture.
This article provides a powerful example of how a behavioral economist uses the tools of his trade and helps his family make great wedding decisions.
About the author: Jeff Hulett is a career banker, data scientist, behavioral economist, and choice architect. Jeff has held banking and consulting leadership roles at Wells Fargo, Citibank, KPMG, and IBM. Today, Jeff is an executive with the Definitive Companies. He teaches personal finance at James Madison University and provides personal finance seminars. Check out his new book -- Making Choices, Making Money: Your Guide to Making Confident Financial Decisions -- at jeffhulett.com.
Table of contents
2. Wedding and event planning framework - an introduction
3. A wedding example
4. Event decision support solutions
Next, pictured are my son Josh and my (now) daughter-in-law Sydney. This article recaps the suggestions I provided them when they were planning their wedding. Just like the strong, independent people they were raised to be -- they heeded some of the advice, did not use some of it, but were appreciative of all of it.
They did an amazing job planning and executing their wedding! It was a "first big couple decision" test. They passed with flying colors to initiate their future life together! I hope this may help you as you plan your next big event or wedding.
This article provides a wedding example for event planning. However, the ideas of this article may be applied to any event.
Photo Credit: Sarah Peterson
An informal survey:
I am of the age where many of my friends have children getting married. Since I am a behavioral economist, I can’t help but ask probing questions! I asked my friends 2 easy to answer questions. For the first question, almost everyone is aligned. For the second question, there is a decided split.
1. “How important is it to you that your children are engaged in the wedding decisions?”
The vast majority say “Very important!”
2. “Now that the wedding weekend has come and gone, was the wedding couple as involved in the wedding decisions as they could have been?”
This is where I see a big split.
About half say “Our adult children owned their wedding decision process. Their decisions were not always perfect, but they learned a lot and had an amazing wedding.”
The other half says - “We were probably over-involved. At the time, they just didn’t seem like they were able to make good decisions so we stepped in.”
Also - this is not necessarily related to wealth. I see this result split regardless of whether my friends are super wealthy or are of more modest means. The point of this article is to help the soon-to-be-married couple and their families make the best wedding decisions.
2. Wedding and event framework - an introduction
In this section, we explore the event framework, suitable for any event, like weddings or corporate events. In general, significant events require complex planning and may be expensive. Also, there is much excitement and some peer pressure tending to put upward pressure on event costs. To have an amazing event while managing costs, make your planning decisions by applying this single guiding principle as a decision rule objective.
Event Success Principle: How guests FEEL after the event will govern their perception of the event.
Next, is our framework supporting this event principle. It shows the critical aspects of building a great memory of your event.
Framework to activate your event community
This Event Success Principle is supported by 2 pillars.
Pillar 1 - The Community Trade: The guests attending your event are the true arbiters of event success, not the hosts. This may seem a little strange since the hosts are paying for the event. However, it is the guests the hosts wish to please. Events are centered upon the community. Hosts and guests are entering into a symbiotic relationship. They are trading community validation and community connection.
In effect, the hosts provide an environment suitable for community connection in exchange for community validation from the event community.
I appreciate this transactional way of positioning an event, especially a wedding, is a little unsettling. But let’s face it, if the couple didn’t want to engage their community, they would just elope! This may be generalized in the context of any big event, like a corporate event with important customers and prospects. The event hosts are gaining company brand validation and sales opportunities in trade for the event costs providing networking connections or education themes to the attendee community.
The Wedding Trade
The Corporate Event Trade
Pillar 2 - Event Emotions: It is how someone feels and not the “things” of the event that people will remember. As an example, for my wedding, I do not remember details of our clothes, the food, how much we drank, the decorations or many details of the venue. My bride will remember more. Since she ran the show, she does not represent a typical guest. My wedding role was much closer to that of a guest! What I do remember is the joy and love of our family and friends. I remember happy, smiling faces, many warm conversations, and many warm conversations between people that just met. Attendees of a corporate event will be impacted by similar event emotions --
How did you feel about the connections you made? or
How did you feel about the curiosity you were able to satisfy?
These are typically remembered more than the training details or the quality of the food.
There is significant academic research concerning event emotions and how they impact memory. Research shows that after an event, most people do not have a permanent memory of the event facts. (E.g., the kind of food or drink served, table arrangement, or the decorations) They are likely to remember event emotions or how they felt during the event. Community-based event emotions are mostly “free” and are activated by connecting people at the event. Also, it is important to have a finish to the event that will make your community feel especially good. This could be the last dance or a heartfelt toast that brings everyone together.
This research identifies our “remembering self” as putting greater emphasis on the following:
the peak emotional intensity during the event, and
the emotions related to the last part of the event.
As such, it is good to finish strong! This Event Success Principle is well-grounded in behavioral economics and behavioral psychological research by Nobel laureate Daniel Kahneman and others.
Warren Buffett is a well-regarded investor and one of the richest people in the world. The following quote is advice that gets to the heart of event planning. Mr. Buffett encourages focusing first on the value of your investments and expenditures, in the service of paying the optimal price for that value:
“Price is what you pay. Value is what you get.”
For the rest of this article, we will focus on the wedding event as an example of our event success principle and helpful event decision solutions. We will show you how to apply Mr. Buffett's sage advice to focus first on value in the context of your wedding objective. The prices of the various event elements will be optimized in the context of how you define value. You may apply this example to many big events!
3. A wedding example
As a rule of thumb: If you keep the joy and love of your wedding community as the focus, you should be able to reduce the cost of lower-priority event facts.
Your family and friends look forward to bringing love and joy as your value. You need to provide a safe, supportive environment enabling your community to keep that love and joy as a memory. Anything more is likely overpaying.
As with any significant event, like a wedding, it is important to set a budget. The budget will lead you to make prioritization trade-offs. The resulting trade-offs are in the community-related context of event facts and event emotions. A budget will enable you to assign utility value to each cost. As you apply your Event Success Principle, the event decision criteria and trade-offs will become clearer. For example:
If people don’t really remember event facts like food and drink, work to keep those costs down. As an example, a buffet is less expensive than a plated dinner. Plus, buffets have the added benefit of increasing community interaction. In the context of the prior event symbiosis model, this “buffet for plated dinner” trade lowers the cost of “community connection” and provides higher value “community validation,” a high-value trade and a win-win!
The day of the week matters. If you can do an event during the week, or at least have part of the event during the week, that will help.
Venues tend to drive significant event costs. Would you consider a barn wedding over a ballroom wedding? I bet your friends would not care much either way! Also, seek less expensive geographies. Dense urban areas like Washington D.C. or New York City are traditionally more expensive than the suburbs or smaller, close proximity cities. For example, Richmond, Virginia is only 90 miles from the D.C. area. A 90-mile drive is do-able for a day trip or a single night sleepover.
Do you have a friend or family member that is an amazing speaker? Ask them to provide a toast. Some people have an amazing talent for giving moving speeches. This will help deliver the "end of the event" emotional impact and will provide the desired memory impression.
Involve your friends, they want to help! Give them an avenue to participate in a way that makes sense to them AND provides value to you. For example, some guests may wish to take and share candid photos. The important thing is to make this optional so they may both enjoy the wedding and take pics to the extent they wish. The guests who opt-in will feel more invested in the event and the host will get the added benefit of unique picture keepsakes.
These are just a few examples, you will naturally come across your own "high-value trade" ideas as you make your Event Success Principle trade-offs.
In terms of setting a budget, you may have options. Your funding options may include:
Family willing to kick in money for the wedding
Savings from the bride and groom
Borrowing to fund the event
Personally, I am not a fan of borrowing for an event. The timing of the interest costs (over, let's say, 10 years) is mismatched with the duration of the event value received by the community. (the event community value will be mostly realized over one weekend when you are married) By the way, the concept of "match funding" comes from the banking industry. A well-run bank will match the duration of its balance sheet sources and uses.
However, this is a personal decision. As guidance, we provide this decision sciences-informed approach to understand your economic trade-offs when setting a budget. In the appendix, we show how a wedding could increase your retirement by $3 million! Keeping your budget reasonable will help you maximize long-term value.
Alternatively, you may decide this Event Success Principle is not for you. Perhaps "Damn the torpedoes! Go Big or Go Home!" is more your style. Certainly, that objective may work as well. This is more a value and cost trade-off decision between consumption today (spend on the wedding) or consumption in the future (save for the future / build a nest egg). This is a complex decision because it often includes the soon-to-be-married couple and their families. Everyone has an opinion. The important takeaway is -- Please be clear about your event objective. Doing so enables the alignment of event criteria and event alternatives to your event objective. It will make your inevitable trade-off decisions easier. In fact, if you are having trouble making criteria or alternative decisions, chances are that you and your decision team are not yet fully aligned on the event objective.
For parents seeking to help their children, here are two suggestions:
Wedding decision-making is a good training ground to help the betrothed couple learn to make decisions together. Provide them with decision agency and decision support. Don't do it for them and resist the urge to 'concierge' the event with a wedding planner. It would be a shame to not use the wedding planning as a means to build their decision confidence together.
All capital used for the wedding is a trade for their inheritance, a grandchild’s college education, or some other future use. Be a wise example for the betrothed couple.
In the next section, we provide a decision support solution to help manage the event decision process. Most important, the smartphone app:
Enables the engaged couple's wedding decision agency, and,
Encourages family collaboration on the best wedding decisions.
With event objective alignment, the criteria will become clearer and easier to weigh. However, there are still a number of alternatives to consider. For example, once you decide on the kind of venue, you will need to decide between venue alternatives and apply your venue criteria to make a good decision. The same decisions must be made for other event considerations like food and drink, photo and video, and even the bridal party! The decision process is very involved. It is the kind of decision where people naturally struggle. Our brains do not easily handle multi-criteria, multi-alternative decisions. Fortunately, there are event decision support solutions that do much of the analytical heavy lifting and help you make great event decisions!
As a Dad, I am fortunate, my son and his betrothed 'killed it' planning and executing their wedding. They had an amazing event. I'm proud of them for being very thoughtful and practical about the inevitable event trade-offs they had to make. It was a test they passed with flying colors to initiate their future life together.
4. Event decision support solutions
Confidently making the best decisions is challenging. Our brains are simply not wired to make complex decisions like wedding or event planning. The key is using high-quality decision support. While our families are well-intentioned, most wedding couples desire to make independent decisions while engaging family as needed for help and guidance. It is a fine line.
Definitive Choice is a smartphone app that provides a straightforward user experience and is backed by time-tested decision science algorithms. It uses a proprietary "Decision 6™" approach that organizes the criteria (what is important to us?) and alternatives (what are our choices?) in a series of bite-size ranking decisions. Since it is on your smartphone, you can use it while touring a venue or doing online research. It is like having an event planner in your pocket! The dashboard provides a rank-ordered list of "best choices," completely tailored to your preferences! Definitive Choice allows decision collaboration. For a corporate event, it facilitates including the event planners, stakeholders, subject matter experts, or anyone else important for building decision confidence. For a wedding, it facilitates including the bride, groom, moms, dads, or anyone else important for building decision confidence.
Also, Definitive Choice comes pre-loaded with event and wedding templates. You will want to customize your own criteria, but the pre-loaded templates provide a nice starting point. Event criteria are a way of creating "what is important to you" categories about your event. Earlier, we discussed the Event Success Principle. This principle suggests an approach that helps to guide your event planning process. As a means to operationalize the Event Success Principle, start with organizing the key event decisions. For example:
Photographer and videographer
Wedding Caterer selection
Wedding venue selection
Then, for each selection, confirm the criteria for each one of the selections. The app already has most of these selections and common criteria preloaded.
To apply the "Event Facts" and "Event Emotions" of the Event Success Principle, you will do so as you compare criteria. Prior to the criteria comparison process being done in the app, consider each criterion in the context of the degree to which you believe these criteria will drive memorable event emotions for your guests. For example for the Wedding Caterer selection, here is a subset of criteria. I have added an example overlay of my belief about wedding emotion. Yours may be different!
Accessibility - does the caterer enable guests to easily mingle, like a buffet? (medium-high emotion)
Availability - is it available for the dates we want? (low emotion)
Capacity - is it enough for our party (medium-high emotion, running out is not good if someone is still hungry)
Quality of bar - good enough drink? (low emotion)
Quality of food - good enough food? (low emotion)
Now, when you perform your comparisons, it will be easier to make the comparative trade-offs by applying your perspective on event emotions. Think of the Event Success Principle as a tiebreaker to guide your criteria comparison process.
This decision process is quick AND accurate. The behavioral sciences teach us that, owing to our evolutionary biology, we are amazingly good at making binary trade-off decisions. This app helps present, organize, and track those trade-offs in a way that leads to a confident decision! Think of the app as a little event concierge, helping you throughout your decision process.
Also, you are not in this alone! You may easily share this decision process with your partner or others involved in the decision process. The good news is, the main decision-makers have total decision agency. This means that they may include as much, or as little, of the feedback from their decision team.
With your criteria defined, weighted, and shared with your event decision team, it is time to go hunting for alternatives! In the Wedding Caterer selection example or any other criterion, you will be able to easily rate each alternative. The app quickly and accurately manages all those trade-offs from your criteria selection and weighting. It will rank order the benefits and costs of each alternative. Also, this is helpful when negotiating. Knowing how far off a price is based on your criteria-based value is critical for either negotiating or deciding to walk away from an alternative.
Make decision science your friend! Make decision confidence your outcome!
What are the long-term wedding budget trade-offs?
Let's say, there are 4 wedding expenditure levels. Also, it is assumed the opportunity cost of the event spending is saving for future consumption. This means that if someone does NOT spend the money on the wedding, they will make it available for investment in the future. The future consumption may be retirement or other important future needs. Economists do not pass judgment on what future use is most important, just that there IS some future use worth saving for. This is a standard economist's way of viewing consumption and saving.
We make a few assumptions about the age of marriage and retirement. Plus, we make an assumption about the pre-tax yield you would achieve on your long-term investment. To play with the model and adjust the assumptions for your reality, please see the following link.
As an example, let's say you consider a "level 1" wedding as a reasonable cost if you keep your wedding attendance small and keep your venue cost under control. But then you change your mind. You figure, "Hey, I only live once! Go Big or Go Home!" So you switch to "level 4." This is a much more posh but expensive wedding event. In terms of opportunity cost, trading level 1 for level 4 will cost you almost $3 million for retirement. This model does NOT include the cost of borrowing. In this case, all wedding levels assume private funding was available.
This way of looking at it changes the narrative. Instead of saying:
"Is it worth paying $100,000 for the wedding?
the better question is:
"Is it worth giving up $3 million to support my children and my grandchildren in their future lives?"
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