Essay by Royston Greenwood, C.R. Hiningsand Dave Whetten in the Journal of Management Studies: “In this essay we argue that institutional scholarship has become overly concerned with explaining institutions and institutional processes, notably at the level of the organization field, rather than with using them to explain and understand organizations. Especially missing is an attempt to gain a coherent, holistic account of how organizations are structured and managed. We also argue that when institutional theory does give attention to organizations it inappropriately treats them as though they are the same, or at least as though any differences are irrelevant for purposes of theory. We propose a return to the study of organizations with an emphasis upon comparative analysis, and suggest the institutional logics perspective as an appropriate means for doing so.”
Behavioural economics and public policy
Tim Harford in the Financial Times: “The past decade has been a triumph for behavioural economics, the fashionable cross-breed of psychology and economics. First there was the award in 2002 of the Nobel Memorial Prize in economics to a psychologist, Daniel Kahneman – the man who did as much as anything to create the field of behavioural economics. Bestselling books were launched, most notably by Kahneman himself (Thinking, Fast and Slow , 2011) and by his friend Richard Thaler, co-author of Nudge (2008). Behavioural economics seems far sexier than the ordinary sort, too: when last year’s Nobel was shared three ways, it was the behavioural economist Robert Shiller who grabbed all the headlines.
Behavioural economics is one of the hottest ideas in public policy. The UK government’s Behavioural Insights Team (BIT) uses the discipline to craft better policies, and in February was part-privatised with a mission to advise governments around the world. The White House announced its own behavioural insights team last summer.
So popular is the field that behavioural economics is now often misapplied as a catch-all term to refer to almost anything that’s cool in popular social science, from the storycraft of Malcolm Gladwell, author of The Tipping Point (2000), to the empirical investigations of Steven Levitt, co-author of Freakonomics (2005).
Yet, as with any success story, the backlash has begun. Critics argue that the field is overhyped, trivial, unreliable, a smokescreen for bad policy, an intellectual dead-end – or possibly all of the above. Is behavioural economics doomed to reflect the limitations of its intellectual parents, psychology and economics? Or can it build on their strengths and offer a powerful set of tools for policy makers and academics alike?…”
Personal Data for the Public Good
Final report on “New Opportunities to Enrich Understanding of Individual and Population Health” of the health data exploration project: “Individuals are tracking a variety of health-related data via a growing number of wearable devices and smartphone apps. More and more data relevant to health are also being captured passively as people communicate with one another on social networks, shop, work, or do any number of activities that leave “digital footprints.”
Almost all of these forms of “personal health data” (PHD) are outside of the mainstream of traditional health care, public health or health research. Medical, behavioral, social and public health research still largely rely on traditional sources of health data such as those collected in clinical trials, sifting through electronic medical records, or conducting periodic surveys.
Self-tracking data can provide better measures of everyday behavior and lifestyle and can fill in gaps in more traditional clinical data collection, giving us a more complete picture of health. With support from the Robert Wood Johnson Foundation, the Health Data Exploration (HDE) project conducted a study to better understand the barriers to using personal health data in research from the individuals who track the data about their own personal health, the companies that market self-track- ing devices, apps or services and aggregate and manage that data, and the researchers who might use the data as part of their research.
Perspectives
Through a series of interviews and surveys, we discovered strong interest in contributing and using PHD for research. It should be noted that, because our goal was to access individuals and researchers who are already generating or using digital self-tracking data, there was some bias in our survey findings—participants tended to have more educa- tion and higher household incomes than the general population. Our survey also drew slightly more white and Asian participants and more female participants than in the general population.
Individuals were very willing to share their self-tracking data for research, in particular if they knew the data would advance knowledge in the fields related to PHD such as public health, health care, computer science and social and behavioral science. Most expressed an explicit desire to have their information shared anonymously and we discovered a wide range of thoughts and concerns regarding thoughts over privacy.
Equally, researchers were generally enthusiastic about the potential for using self-tracking data in their research. Researchers see value in these kinds of data and think these data can answer important research questions. Many consider it to be of equal quality and importance to data from existing high quality clinical or public health data sources.
Companies operating in this space noted that advancing research was a worthy goal but not their primary business concern. Many companies expressed interest in research conducted outside of their company that would validate the utility of their device or application but noted the critical importance of maintaining their customer relationships. A number were open to data sharing with academics but noted the slow pace and administrative burden of working with universities as a challenge.
In addition to this considerable enthusiasm, it seems a new PHD research ecosystem may well be emerging. Forty-six percent of the researchers who participated in the study have already used self-tracking data in their research, and 23 percent of the researchers have already collaborated with application, device, or social media companies.
The Personal Health Data Research Ecosystem
A great deal of experimentation with PHD is taking place. Some individuals are experimenting with personal data stores or sharing their data directly with researchers in a small set of clinical experiments. Some researchers have secured one-off access to unique data sets for analysis. A small number of companies, primarily those with more of a health research focus, are working with others to develop data commons to regularize data sharing with the public and researchers.
SmallStepsLab serves as an intermediary between Fitbit, a data rich company, and academic research- ers via a “preferred status” API held by the company. Researchers pay SmallStepsLab for this access as well as other enhancements that they might want.
These promising early examples foreshadow a much larger set of activities with the potential to transform how research is conducted in medicine, public health and the social and behavioral sciences.
Opportunities and Obstacles
There is still work to be done to enhance the potential to generate knowledge out of personal health data:
- Privacy and Data Ownership: Among individuals surveyed, the dominant condition (57%) for making their PHD available for research was an assurance of privacy for their data, and over 90% of respondents said that it was important that the data be anonymous. Further, while some didn’t care who owned the data they generate, a clear majority wanted to own or at least share owner- ship of the data with the company that collected it.
- InformedConsent:Researchersareconcerned about the privacy of PHD as well as respecting the rights of those who provide it. For most of our researchers, this came down to a straightforward question of whether there is informed consent. Our research found that current methods of informed consent are challenged by the ways PHD are being used and reused in research. A variety of new approaches to informed consent are being evaluated and this area is ripe for guidance to assure optimal outcomes for all stakeholders.
- Data Sharing and Access: Among individuals, there is growing interest in, as well as willingness and opportunity to, share personal health data with others. People now share these data with others with similar medical conditions in online groups like PatientsLikeMe or Crohnology, with the intention to learn as much as possible about mutual health concerns. Looking across our data, we find that individuals’ willingness to share is dependent on what data is shared, how the data will be used, who will have access to the data and when, what regulations and legal protections are in place, and the level of compensation or benefit (both personal and public).
- Data Quality: Researchers highlighted concerns about the validity of PHD and lack of standard- ization of devices. While some of this may be addressed as the consumer health device, apps and services market matures, reaching the optimal outcome for researchers might benefit from strategic engagement of important stakeholder groups.
We are reaching a tipping point. More and more people are tracking their health, and there is a growing number of tracking apps and devices on the market with many more in development. There is overwhelming enthusiasm from individuals and researchers to use this data to better understand health. To maximize personal data for the public good, we must develop creative solutions that allow individual rights to be respected while providing access to high-quality and relevant PHD for research, that balance open science with intellectual property, and that enable productive and mutually beneficial collaborations between the private sector and the academic research community.”
New Journal Helps Behavioral Scientists Find Their Way to Washington
The PsychReport: “When it comes to being heard in Washington, classical economists have long gotten their way. Behavioral scientists, on the other hand, haven’t proved so adept at getting their message across.
It isn’t for lack of good ideas. Psychology’s applicability has been gaining momentum in recent years, namely in the U.K.’s Behavioral Insights Team, which has helped prove the discipline’s worth to policy makers. The recent (but not-yet-official) announcement that the White House is creating a similar team is another major endorsement of behavioral science’s value.
But when it comes to communicating those ideas to the public in general, psychologists and other behavioral scientists can’t name so many successes. Part of the problem is PR know-how: writing for a general audience, publicizing good ideas, reaching-out to decision makers. Another is incentive: academics need to publish, and many times publishing means producing long, dense, jargon-laden articles for peer-reviewed journals read by a rarified audience of other academics. And then there’s time, or lack of it.
But a small group of prominent behavioral scientists is working to help other researchers find their way to Washington. The brainchild of UCLA’s Craig Fox and Duke’s Sim Sitkin, Behavioral Science & Policy is a peer-reviewed journal set to launch online this fall and in print early next year, whose mission is to influence policy and practice through promoting high-quality behavioral science research. Articles will be brief, well written, and will all provide straightforward, applicable policy recommendations that serve the public interest.
“What we’re trying to do is create policies that are mindful of how individuals, groups, and organizations behave. How can you create smart policies if you don’t do that?”
In bringing behavioral science to the capital, Fox echoed a similar motivation as David Halpern of the Behavioral Insights Team.
“What we’re trying to do is create policies that are mindful of how individuals, groups, and organizations behave. How can you create smart policies if you don’t do that?” Fox said. “Because after all, all policies affect individuals, groups, and/or organizations.”
Fox has already assembled an impressive team of scientists from around the country for the journal’s advisory board including Richard Thaler and Cass Sunstein, authors of Nudge which helped inspire the creation of the Behavioral Insights Team, The New York Times columnist David Brooks, and Nobel Prize Winner Daniel Kahneman. They’ve created a strong partnership with the prestigious think tank Brookings Institute, who will serve as their publishing partner and who they plan will also co-host briefings for policy makers in Washington…”
Predicting Individual Behavior with Social Networks
Article by Sharad Goel and Daniel Goldstein (Microsoft Research): “With the availability of social network data, it has become possible to relate the behavior of individuals to that of their acquaintances on a large scale. Although the similarity of connected individuals is well established, it is unclear whether behavioral predictions based on social data are more accurate than those arising from current marketing practices. We employ a communications network of over 100 million people to forecast highly diverse behaviors, from patronizing an off-line department store to responding to advertising to joining a recreational league. Across all domains, we find that social data are informative in identifying individuals who are most likely to undertake various actions, and moreover, such data improve on both demographic and behavioral models. There are, however, limits to the utility of social data. In particular, when rich transactional data were available, social data did little to improve prediction.”
This algorithm can predict a revolution
Russell Brandom at the Verge: “For students of international conflict, 2013 provided plenty to examine. There was civil war in Syria, ethnic violence in China, and riots to the point of revolution in Ukraine. For those working at Duke University’s Ward Lab, all specialists in predicting conflict, the year looks like a betting sheet, full of predictions that worked and others that didn’t pan out.
Guerrilla campaigns intensified, proving out the prediction
When the lab put out their semiannual predictions in July, they gave Paraguay a 97 percent chance of insurgency, largely based on reports of Marxist rebels. The next month, guerrilla campaigns intensified, proving out the prediction. In the case of China’s armed clashes between Uighurs and Hans, the models showed a 33 percent chance of violence, even as the cause of each individual flare-up was concealed by the country’s state-run media. On the other hand, the unrest in Ukraine didn’t start raising alarms until the action had already started, so the country was left off the report entirely.
According to Ward Lab’s staff, the purpose of the project isn’t to make predictions but to test theories. If a certain theory of geopolitics can predict an uprising in Ukraine, then maybe that theory is onto something. And even if these specialists could predict every conflict, it would only be half the battle. “It’s a success only if it doesn’t come at the cost of predicting a lot of incidents that don’t occur,” says Michael D. Ward, the lab’s founder and chief investigator, who also runs the blog Predictive Heuristics. “But it suggests that we might be on the right track.”
If a certain theory of geopolitics can predict an uprising in Ukraine, maybe that theory is onto something
Forecasting the future of a country wasn’t always done this way. Traditionally, predicting revolution or war has been a secretive project, for the simple reason that any reliable prediction would be too valuable to share. But as predictions lean more on data, they’ve actually become harder to keep secret, ushering in a new generation of open-source prediction models that butt against the siloed status quo.
Will this country’s government face an acute existential threat in the next six months?
The story of automated conflict prediction starts at the Defense Advance Research Projects Agency, known as the Pentagon’s R&D wing. In the 1990s, DARPA wanted to try out software-based approaches to anticipating which governments might collapse in the near future. The CIA was already on the case, with section chiefs from every region filing regular forecasts, but DARPA wanted to see if a computerized approach could do better. They looked at a simple question: will this country’s government face an acute existential threat in the next six months? When CIA analysts were put to the test, they averaged roughly 60 percent accuracy, so DARPA’s new system set the bar at 80 percent, looking at 29 different countries in Asia with populations over half a million. It was dubbed ICEWS, the Integrated Conflict Early Warning System, and it succeeded almost immediately, clearing 80 percent with algorithms built on simple regression analysis….
On the data side, researchers at Georgetown University are cataloging every significant political event of the past century into a single database called GDELT, and leaving the whole thing open for public research. Already, projects have used it to map the Syrian civil war and diplomatic gestures between Japan and South Korea, looking at dynamics that had never been mapped before. And then, of course, there’s Ward Lab, releasing a new sheet of predictions every six months and tweaking its algorithms with every development. It’s a mirror of the same open-vs.-closed debate in software — only now, instead of fighting over source code and security audits, it’s a fight over who can see the future the best.”
The GovLab Index: Designing for Behavior Change
Please find below the latest installment in The GovLab Index series, inspired by the Harper’s Index. “The GovLab Index: Designing for Behavior Change” explores the recent application of psychology and behavioral economics towards solving social issues and shaping public policy and programs. Previous installments include The Networked Public, Measuring Impact with Evidence, Open Data, The Data Universe, Participation and Civic Engagement and Trust in Institutions.
- Year the Behavioural Insights or “Nudge” Team was established by David Cameron in the U.K.: 2010
- Amount saved by the U.K. Courts Service a year by sending people owing fines personalized text messages to persuade them to pay promptly since the creation of the Nudge unit: £30m
- Entire budget for the Behavioural Insights Team: less than £1 million
- Estimated reduction in bailiff interventions through the use of personalized text reminders: 150,000 fewer interventions annually
- Percentage increase among British residents who paid their taxes on time when they received a letter saying that most citizens in their neighborhood pay their taxes on time: 15%
- Estimated increase in organ-donor registrations in the U.K. if people are asked “If you needed an organ transplant, would you take one?”: 96,000
- Proportion of employees who now have a workplace pension since the U.K. government switched from opt-in to opt-out (illustrating the power of defaults): 83%, 63% before opt-out
- Increase in 401(k) enrollment rates within the U.S. by changing the default from ‘opt in’ to ‘opt out’: from 13% to 80%
- Behavioral studies have shown that consumers overestimate savings from credit cards with no annual fees. Reduction in overall borrowing costs to consumers by requiring card issuers to tell consumers how much it would cost them in fees and interest, under the 2009 CARD Act in the U.S.: 1.7% of average daily balances
- Many high school students and their families in the U.S. find financial aid forms for college complex and thus delay filling them out. Increase in college enrollment as a result of being helped to complete the FAFSA financial aid form by an H&R tax professional, who then provided immediate estimates of the amount of aid the student was eligible for, and the net tuition cost of four nearby public colleges: 26%
- How much more likely people are to keep accounting records, calculate monthly revenues, and separate their home and business books if given “rules of thumb”-based training with regards to managing their finances, according to a randomized control trial conducted in a bank in the Dominican Republic: 10%
- Elderly Americans are asked to choose from over 40 options when enrolling in Medicaid Part D private drug plans. How many switched plans to save money when they received a letter providing information about three plans that would be cheaper for them: almost double
- The amount saved on average per person by switching plans due to this intervention: $150 per year
- Increase in prescriptions to manage cardiac disease when Medicaid enrollees are sent a suite of behavioral nudges such as more salient description of the consequences of remaining untreated and post-it note reminders during an experiment in the U.S.: 78%
- Reduction in street-litter when a trail of green footprints leading to nearby garbage cans is stenciled on the ground during an experiment in Copenhagen, Denmark: 46%
- Reduction in missed National Health Service appointments in the U.K. when patients are asked to fill out their own appointment cards: 18%
- Reduction in missed appointments when patients are also made aware of the number of people who attend their appointments on time: 31%
- The cost of non-attendance per year for the National Health Service: £700m
- How many people in a U.S. experiment chose to ‘downsize’ their meals when asked, regardless of whether they received a discount for the smaller portion: 14-33%
- Average reduction in calories as a result of downsizing: 200
- Number of households in the U.K. without properly insulated attics, leading to high energy consumption and bills: 40%
- Result of offering group discounts to motivate households to insulate their attics: no effect
- Increase in households that agreed to insulate their attics when offered loft-clearing services even though they had to pay for the service: 4.8 fold increase
Full list and sources at http://thegovlab.org/the-govlab-index-designing-for-behavior-change/
The News: A User’s Manual
New book by Alain De Botton: “The news is everywhere, we can’t stop checking it constantly on our screens, but what is it doing to our minds?
The news occupies the same dominant position in modern society as religion once did, asserts Alain de Botton – but we don’t begin to understand its impact on us. In this dazzling new book, de Botton takes 25 archetypal news stories – from an aircrash to a murder, a celebrity interview to a political scandal – and submits them to unusually intense analysis.
He raises questions like: How come disaster stories are often so uplifting? What makes the love lives of celebrities so interesting? Why do we enjoy politicians being brought down? Why are upheavals in far off lands often so… boring?
De Botton has written the ultimate manual for our news-addicted age, one sure to bring calm, understanding and a measure of sanity to our daily (perhaps even hourly) interactions with the news machine.
Inspired by writing the book, he has also created a news outlet, which can be visited here: www.philosophersmail.com.
Index: Designing for Behavior Change
The Living Library Index – inspired by the Harper’s Index – provides important statistics and highlights global trends in governance innovation. This installment focuses on designing for behavior change and was originally published in 2014.
- Year the Behavioural Insights or “Nudge” Team was established by David Cameron in the U.K.: 2010
- Amount saved by the U.K. Courts Service a year by sending people owing fines personalized text messages to persuade them to pay promptly since the creation of the Nudge unit: £30m
- Entire budget for the Behavioural Insights Team: less than £1 million
- Estimated reduction in bailiff interventions through the use of personalized text reminders: 150,000 fewer interventions annually
- Percentage increase among British residents who paid their taxes on time when they received a letter saying that most citizens in their neighborhood pay their taxes on time: 15%
- Estimated increase in organ-donor registrations in the U.K. if people are asked “If you needed an organ transplant, would you take one?”: 96,000
- Proportion of employees who now have a workplace pension since the U.K. government switched from opt-in to opt-out (illustrating the power of defaults): 83%, 63% before opt-out
- Increase in 401(k) enrollment rates within the U.S. by changing the default from ‘opt in’ to ‘opt out’: from 13% to 80%
- Behavioral studies have shown that consumers overestimate savings from credit cards with no annual fees. Reduction in overall borrowing costs to consumers by requiring card issuers to tell consumers how much it would cost them in fees and interest, under the 2009 CARD Act in the U.S.: 1.7% of average daily balances
- Many high school students and their families in the U.S. find financial aid forms for college complex and thus delay filling them out. Increase in college enrollment as a result of being helped to complete the FAFSA financial aid form by an H&R tax professional, who then provided immediate estimates of the amount of aid the student was eligible for, and the net tuition cost of four nearby public colleges: 26%
- How much more likely people are to keep accounting records, calculate monthly revenues, and separate their home and business books if given “rules of thumb”-based training with regards to managing their finances, according to a randomized control trial conducted in a bank in the Dominican Republic: 10%
- Elderly Americans are asked to choose from over 40 options when enrolling in Medicaid Part D private drug plans. How many switched plans to save money when they received a letter providing information about three plans that would be cheaper for them: almost double
- The amount saved on average per person by switching plans due to this intervention: $150 per year
- Increase in prescriptions to manage cardiac disease when Medicaid enrollees are sent a suite of behavioral nudges such as more salient description of the consequences of remaining untreated and post-it note reminders during an experiment in the U.S.: 78%
- Reduction in street-litter when a trail of green footprints leading to nearby garbage cans is stenciled on the ground during an experiment in Copenhagen, Denmark: 46%
- Reduction in missed National Health Service appointments in the U.K. when patients are asked to fill out their own appointment cards: 18%
- Reduction in missed appointments when patients are also made aware of the number of people who attend their appointments on time: 31%
- The cost of non-attendance per year for the National Health Service: £700m
- How many people in a U.S. experiment chose to ‘downsize’ their meals when asked, regardless of whether they received a discount for the smaller portion: 14-33%
- Average reduction in calories as a result of downsizing: 200
- Number of households in the U.K. without properly insulated attics, leading to high energy consumption and bills: 40%
- Result of offering group discounts to motivate households to insulate their attics: no effect
- Increase in households that agreed to insulate their attics when offered loft-clearing services even though they had to pay for the service: 4.8 fold increase
Sources
- “Applying Behavioural Insights to Organ Donation: preliminary results from a randomised controlled trial,” The Cabinet Office Behavioural Insights Team, December 2013.
- Bennhold, Katrin. “Britain’s Ministry of Nudges,” New York Times, December 2013.
- Darling, Matthew. Datta, Saugato. and Mullainathan, Sendhil. “The Nature of the BEast: What Behavioral Economics Is Not,” The Center for Global Development. October 2013.
- Gyani, Alex. “Applying behavioural insights to public policy.”
- Haynes, Laura, Owain Service, Ben Goldacre, and David Torgerson. “Test, Learn, Adapt: Developing Public Policy with Randomised Controlled Trials,” The Cabinet Office Behavioural Insights Team, June 2012.
- “H&R Block FAFSA Randomized Experiment,” Coalition for Evidence-Based Policy, February 2011.
- Lunn, Pete. “Regulatory Policy and Behavioural Economics,” OECD Publishing, January 2014.
- “Organ donor registrations: trialling different approaches,” The Cabinet Office Behavioural Insights Team, December 2013.
- Schoar, Antoinette and Datta, Saugato. ‘The Power of Heuristics’. January 2014. Ideas42.
- “UK Cabinet Office ‘nudge’ team to be spun off into private group,” Financial Times, February 2014.
- “Using nudges to improve health: sticking to statins,” Ideas42.
- Schwartz, J., Riis, J., Elbel, B., Ariely, D. (2012), “Inviting consumers to downsize fast-food portions significantly reduces calorie consumption,” Health Affairs, 31, 2399–2407.
- “Simple measures ‘cut NHS missed appointments’,” BBC News Health, 8 March 2012.
- Webster, George. “Is a ‘nudge’ in the right direction all we need to be greener?” CNN, 2012.
Selected Readings on Behavioral Economics: Nudges
The Living Library’s Selected Readings series seeks to build a knowledge base on innovative approaches for improving the effectiveness and legitimacy of governance. This curated and annotated collection of recommended works on the topic of behavioral economics was originally published in 2014.
The 2008 publication of Richard Thaler and Cass Sunstein’s Nudge ushered in a new era of behavioral economics, and since then, policy makers in the United States and elsewhere have been applying behavioral economics to the field of public policy. Like Smart Disclosure, behavioral economics can be used in the public sector to improve the decisionmaking ability of citizens without relying on regulatory interventions. In the six years since Nudge was published, the United Kingdom has created the Behavioural Insights Team (also known as the Nudge Unit), a cross-ministerial organization that uses behavioral economics to inform public policy, and the White House has recently followed suit by convening a team of behavioral economists to create a behavioral insights-driven team in the United States. Policymakers have been using behavioral insights to design more effective interventions in the fields of long term unemployment; roadway safety; enrollment in retirement plans; and increasing enrollment in organ donation registries, to name some noteworthy examples. The literature of this nascent field provides a look at the growing optimism in the potential of applying behavioral insights in the public sector to improve people’s lives.
Selected Reading List (in alphabetical order)
- John Beshears, James Choi, David Laibson and Brigitte C. Madrian – The Importance of Default Options for Retirement Savings Outcomes: Evidence from the United States – a paper examining the role default options play in encouraging intelligent retirement savings decisionmaking.
- Cabinet Office and Behavioural Insights Team, United Kingdom – Applying Behavioural Insights to Health – a paper outlining some examples of behavioral economics being applied to the healthcare landscape using cost-efficient interventions.
- Matthew Darling, Saugato Datta and Sendhil Mullainathan – The Nature of the BEast: What Behavioral Economics Is Not – a paper discussing why control and behavioral economics are not as closely aligned as some think, reiterating the fact that the field is politically agnostic.
- Antoinette Schoar and Saugato Datta – The Power of Heuristics – a paper exploring the concept of “heuristics,” or rules of thumb, which can provide helpful guidelines for pushing people toward making “reasonably good” decisions without a full understanding of the complexity of a situation.
- Richard H. Thaler and Cass R. Sunstein – Nudge: Improving Decisions About Health, Wealth, and Happiness – an influential book describing the many ways in which the principles of behavioral economics can be and have been used to influence choices and behavior through the development of new “choice architectures.”
- U.K. Parliament Science and Technology Committee – Behaviour Change – an exploration of the government’s attempts to influence the behaviour of its citizens through nudges, with a focus on comparing the effectiveness of nudges to that of regulatory interventions.
Annotated Selected Reading List (in alphabetical order)
Beshears, John, James Choi, David Laibson and Brigitte C. Madrian. “The Importance of Default Options for Retirement Savings Outcomes: Evidence from the United States.” In Jeffrey R. Brown, Jeffrey B. Liebman and David A. Wise, editors, Social Security Policy in a Changing Environment, Cambridge: National Bureau of Economic Research, 2009. http://bit.ly/LFmC5s.
- This paper examines the role default options play in pushing people toward making intelligent decisions regarding long-term savings and retirement planning.
- Importantly, the authors provide evidence that a strategically oriented default setting from the outset is likely not enough to fully nudge people toward the best possible decisions in retirement savings. They find that the default settings in every major dimension of the savings process (from deciding whether to participate in a 401(k) to how to withdraw money at retirement) have real and distinct effects on behavior.
Cabinet Office and Behavioural Insights Team, United Kingdom. “Applying Behavioural Insights to Health.” December 2010. http://bit.ly/1eFP16J.
- In this report, the United Kingdom’s Behavioural Insights Team does not attempt to “suggest that behaviour change techniques are the silver bullet that can solve every problem.” Rather, they explore a variety of examples where local authorities, charities, government and the private-sector are using behavioural interventions to encourage healthier behaviors.
- The report features case studies regarding behavioral insights ability to affect the following public health issues:
- Smoking
- Organ donation
- Teenage pregnancy
- Alcohol
- Diet and weight
- Diabetes
- Food hygiene
- Physical activity
- Social care
- The report concludes with a call for more experimentation and knowledge gathering to determine when, where and how behavioural interventions can be most effective in helping the public become healthier.
Darling, Matthew, Saugato Datta and Sendhil Mullainathan. “The Nature of the BEast: What Behavioral Economics Is Not.” The Center for Global Development. October 2013. https://bit.ly/2QytRmf.
- In this paper, Darling, Datta and Mullainathan outline the three most pervasive myths that abound within the literature about behavioral economics:
- First, they dispel the relationship between control and behavioral economics. Although tools used within behavioral economics can convince people to make certain choices, the goal is to nudge people to make the choices they want to make. For example, studies find that when retirement savings plans change the default to opt-in rather than opt-out, more workers set up 401K plans. This is an example of a nudge that guides people to make a choice that they already intend to make.
- Second, they reiterate that the field is politically agnostic. Both liberals and conservatives have adopted behavioral economics and its approach is neither liberal nor conservative. President Obama embraces behavioral economics but the United Kingdom’s conservative party does, too.
- And thirdly, the article highlights that irrationality actually has little to do with behavioral economics. Context is an important consideration when one considers what behavior is rational and what behavior is not. Rather than use the term “irrational” to describe human beings, the authors assert that humans are “infinitely complex” and behavior that is often considered irrational is entirely situational.
Schoar, Antoinette and Saugato Datta. “The Power of Heuristics.” Ideas42. January 2014. https://bit.ly/2UDC5YK.
- This paper explores the notion that being presented with a bevy of options can be desirable in many situations, but when making an intelligent decision requires a high-level understanding of the nuances of vastly different financial aid packages, for example, options can overwhelm. Heuristics (rules of thumb) provide helpful guidelines that “enable people to make ‘reasonably good’ decisions without needing to understand all the complex nuances of the situation.”
- The underlying goal heuristics in the policy space involves giving people the type of “rules of thumb” that enable make good decisionmaking regarding complex topics such as finance, healthcare and education. The authors point to the benefit of asking individuals to remember smaller pieces of knowledge by referencing a series of studies conducted by psychologists Beatty and Kahneman that showed people were better able to remember long strings of numbers when they were broken into smaller segments.
- Schoar and Datta recommend these four rules when implementing heuristics:
- Use heuristics where possible, particularly in complex situation;
- Leverage new technology (such as text messages and Internet-based tools) to implement heuristics.
- Determine where heuristics can be used in adult training programs and replace in-depth training programs with heuristics where possible; and
- Consider how to apply heuristics in situations where the exception is the rule. The authors point to the example of savings and credit card debt. In most instances, saving a portion of one’s income is a good rule of thumb. However, when one has high credit card debt, paying off debt could be preferable to building one’s savings.
Thaler, Richard H. and Cass R. Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness. Yale University Press, 2008. https://bit.ly/2kNXroe.
- This book, likely the single piece of scholarship most responsible for bringing the concept of nudges into the public consciousness, explores how a strategic “choice architecture” can help people make the best decisions.
- Thaler and Sunstein, while advocating for the wider and more targeted use of nudges to help improve people’s lives without resorting to overly paternal regulation, look to five common nudges for lessons and inspiration:
- The design of menus gets you to eat (and spend) more;
- “Flies” in urinals improve, well, aim;
- Credit card minimum payments affect repayment schedules;
- Automatic savings programs increase savings rate; and
- “Defaults” can improve rates of organ donation.
- In the simplest terms, the authors propose the wider deployment of choice architectures that follow “the golden rule of libertarian paternalism: offer nudges that are most likely to help and least likely to inflict harm.”
U.K. Parliament Science and Technology Committee. “Behaviour Change.” July 2011. http://bit.ly/1cbYv5j.
- This report from the U.K.’s Science and Technology Committee explores the government’s attempts to influence the behavior of its citizens through nudges, with a focus on comparing the effectiveness of nudges to that of regulatory interventions.
- The author’s central conclusion is that, “non-regulatory measures used in isolation, including ‘nudges,’ are less likely to be effective. Effective policies often use a range of interventions.”
- The report’s other major findings and recommendations are:
- Government must invest in gathering more evidence about what measures work to influence population behaviour change;
- They should appoint an independent Chief Social Scientist to provide them with robust and independent scientific advice;
- The Government should take steps to implement a traffic light system of nutritional labelling on all food packaging; and
- Current voluntary agreements with businesses in relation to public health have major failings. They are not a proportionate response to the scale of the problem of obesity and do not reflect the evidence about what will work to reduce obesity. If effective agreements cannot be reached, or if they show minimal benefit, the Government should pursue regulation.”