The News: A User’s Manual

Curated on Posted on by Stefaan Verhulst

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
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.

Habermas and the Garants : Narrowing the gap between policy and practice in French organisation – citizen engagement

Curated on Posted on by Stefaan Verhulst
New paper by Judy Burnside-Lawry, Carolyne Lee and Sandrine Rui: “This article draws on a case study of organisation–citizen engagement during railway infrastructure planning in southwest France, to examine the nature of participatory democracy, both conceptually —as elucidated by Habermas and others— and empirically, as recently practised within the framework of a model established in one democratically governed country.
We analyse roles played by the state organisation responsible for building railway infrastructure; the National Commission for Public Debate; and the Garants, who oversee and facilitate the participatory process as laid down by the French law of Public Debate. We conclude by arguing that despite its normative aspects and its lack of provision for analysis of power relations, Habermas’s theory of communicative action can be used to evaluate the quality of organisation –citizen engagement, potentially providing a basis for informing actual models of democratic participation.”

Index: Designing for Behavior Change

Curated on Posted on by Shruti Sannon

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

We need a new Bismarck to tame the machines

Curated on Posted on by Stefaan Verhulst
Michael Ignatieff in the Financial Times: “A question haunting democratic politics everywhere is whether elected governments can control the cyclone of technological change sweeping through their societies. Democracy comes under threat if technological disruption means that public policy no longer has any leverage on job creation. Democracy is also in danger if digital technologies give states powers of total surveillance.

If, in the words of Google chairman Eric Schmidt, there is a “race between people and computers” even he suspects people may not win, democrats everywhere should be worried. In the same vein, Lawrence Summers, former Treasury secretary, recently noted that new technology could be liberating but that the government needed to soften its negative effects and make sure the benefits were distributed fairly. The problem, he went on, was that “we don’t yet have the Gladstone, the Teddy Roosevelt or the Bismarck of the technology era”.

These Victorian giants have much to teach us. They were at the helm when their societies were transformed by the telegraph, the electric light, the telephone and the combustion engine. Each tried to soften the blow of change, and to equalise the benefits of prosperity for working people. With William Gladstone it was universal primary education and the vote for Britain’s working men. With Otto von Bismarck it was legislation that insured German workers against ill-health and old age. For Roosevelt it was the entire progressive agenda, from antitrust legislation and regulation of freight rates to the conservation of America’s public lands….

The Victorians created the modern state to tame the market in the name of democracy but they wanted a nightwatchman state, not a Leviathan. Thanks to the new digital technologies, the state they helped create now has powers of surveillance that threaten our privacy and freedom. What new technology makes possible, states will do. Keeping technology in the service of democracy will not be easy. Asking judges to guard the guards only bloats the state apparatus still further. Allowing dissident insiders to get away with leaking the state’s secrets will only result in more secretive, paranoid and controlling government.

The Victorians would have said there is a solution – representative government itself – but it requires citizens to trust their representatives to hold the government in check. The Victorians created modern, mass representative democracy so that collective public choice could control change for everyone’s benefit. They believed that representatives, if given the authority and the necessary information, could control the power that technology confers on the modern state.
This is still a viable ideal but we have plenty of rebuilding before our democratic institutions are ready for the task. Congress and parliament need to regain trust and capability; and, if they do, we can start recovering the faith of the Victorians we so sorely need: the belief that democracy can master the technologies that are transforming our lives.“

Selected Readings on Behavioral Economics: Nudges

Curated on Posted on by Andrew Young

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.”

Citizen Engagement: 3 Cities And Their Civic Tech Tools

Curated on Posted on by Stefaan Verhulst

Melissa Jun Rowley at the Toolbox: “Though democratic governments are of the people, by the people, and for the people, it often seems that our only input is electing officials who pass laws on our behalf. After all, I don’t know many people who attend town hall meetings these days. But the evolution of technology has given citizens a new way to participate. Governments are using technology to include as many voices from their communities as possible in civic decisions and activities. Here are three examples.
Raleigh, NC
Raleigh North Carolina’s open government initiative is a great example of passive citizen engagement. By following an open source strategy, Open Raleigh has made city data available to the public. Citizens then use the data in a myriad of ways, from simply visualizing daily crime in their city, to creating an app that lets users navigate and interactively utilize the city’s greenway system.
Fort Smith, AR
Using MindMixer, Fort Smith Arkansas has created an online forum for residents to discuss the city’s comprehensive plan, effectively putting the community’s future in the hands of the community itself. Citizens are invited to share their own ideas, vote on ideas submitted by others, and engage with city officials that are “listening” to the conversation on the site.
Seattle, WA
Being a tech town, it’s no surprise that Seattle is using social media as a citizen engagement tool. The Seattle Police Department (SPD) uses a variety of social media tools to reach the public. In 2012, the department launched a first-of-its kind hyper-local twitter initiative. A police scanner for the twitter generation, Tweets by Beat provides twitter feeds of police dispatches in each of Seattle’s 51 police beats so that residents can find out what is happening right on their block.
In addition to Twitter and Facebook, SPD created a Tumblr to, in their own words, “show you your police department doing police-y things in your city.” In a nutshell, the department’s Tumblr serves as an extension of their other social media outlets. “

‘Nudge Unit’ forming mutual joint venture

Curated on Posted on by Stefaan Verhulst

Press Release: “The government’s Behavioural Insights Team – also known as the Nudge Unit – has teamed up with Nesta, the UK’s innovation foundation, to create a new mutual joint venture, Minister for the Cabinet Office Francis Maude announced today.
The mutual joint venture will be a new UK-based company, paying taxes, exporting services across the world and helping get Britain on the rise.
The Behavioural Insights Team, which was set up in 2010 with a mission to find innovative ways of enabling people to make better choices for themselves and society, is now a world-leader in the application of insights from the behavioural sciences and credited with helping the UK government save millions of pounds for the taxpayer.
As a result, they have received an increasing number of requests to help apply insights from the behavioural sciences to tackle public policy problems, both at home and overseas. As of today, the team – which will continue to be known as the Behavioural Insights Team – is able to service this demand from any part of the UK public sector, charities and foreign governments. The new company will also be able to work with commercial organisations, where there is an underlying social purpose to the project….
The deal forms part of the government’s commitment to drive innovation in government commercial models – a central commitment in the Civil Service Reform Plan – and follows on from the launch of the civil service pension provider MyCSP in April 2012, which became the first mutual joint venture to spin out of government, and the launch of SSCL Ltd late last year in a joint venture with Steria Ltd to run shared services for Whitehall departments.
The government is determined to look beyond the old binary choice between in-house provision and outsourcing. As such they are working to develop a hybrid economy with a diverse range of suppliers from the mutual joint ventures to the voluntary sector, from in-house provision to straight sourcing.”

Civic Tech Forecast: 2014

Curated on Posted on by Stefaan Verhulst

Laura Dyson from Code for America: “Last year was a big year for civic technology and government innovation, and if last week’s Municipal Innovation discussion was any indication, 2014 promises to be even bigger. More than sixty civic innovators from both inside and outside of government gathered to hear three leading civic tech experts share their “Top Five” list of civic tech trends from 2013m, and predictions for what’s to come in 2014. From responsive web design to overcoming leadership change, guest speakers Luke Fretwell, Juan Pablo Velez, and Alissa Black covered both challenges and opportunities. And the audience had a few predictions of their own. Highlights included:
Mark Leech, Application Development Manager, City of Albuquerque: “Regionalization will allow smaller communities to participate and act as a force multiplier for them.”
Rebecca Williams, Policy Analyst, Sunlight Foundation: “Open data policy (law and implementation) will become more connected to traditional forms of governance, like public records and town hall meetings.”
Rick Dietz, IT Director, City of Bloomington, Ind.: “I think governments will need to collaborate directly more on open source development, particularly on enterprise scale software systems — not just civic apps.”
Kristina Ng, Office of Financial Empowerment, City and County of San Francisco: “I’m excited about the growing community of innovative government workers.”
Hillary Hartley, Presidential Innovation Fellow: “We’ll need to address sustainability and revenue opportunities. Consulting work can only go so far; we must figure out how to empower civic tech companies to actually make money.”
An informal poll of the audience showed that roughly 96 percent of the group was feeling optimistic about the coming year for civic innovation. What’s your civic tech forecast for 2014? Read on to hear what guest speakers Luke Fretwell, Juan Pablo Velez, and Alissa Black had to say, and then let us know how you’re feeling about 2014 by tweeting at @codeforamerica.”
 

Belonging: Solidarity and Division in Modern Societies

Curated on Posted on by Stefaan Verhulst

New book by Montserrat Guibernau: “It is commonly assumed that we live in an age of unbridled individualism, but in this important new book Montserrat Guibernau argues that the need to belong to a group or community – from peer groups and local communities to ethnic groups and nations – is a pervasive and enduring feature of modern social life.
The power of belonging stems from the potential to generate an emotional attachment capable of fostering a shared identity, loyalty and solidarity among members of a given community. It is this strong emotional dimension that enables belonging to act as a trigger for political mobilization and, in extreme cases, to underpin collective violence.
Among the topics examined in this book are identity as a political instrument; emotions and political mobilization; the return of authoritarianism and the rise of the new radical right; symbols and the rituals of belonging; loyalty, the nation and nationalism. It includes case studies from Britain, Spain, Catalonia, Germany, the Middle East and the United States.”

Don’t believe the hype about behavioral economics

Curated on Posted on by Stefaan Verhulst

Allison Schrager: “I have a confession to make: I think behavioral economics is over-rated. Recently, Nobelist Robert Shiller called on economists to incorporate more psychology into their work. While there are certainly things economists can learn from psychology and other disciplines to enrich their understanding of the economy, this approach is not a revolution in economics. Often models that incorporate richer aspects of human behavior are the same models economists always use—they simply rationalize seemingly irrational behavior. Even if we can understand why people don’t always act rationally, it’s not clear if that can lead to better economic policy and regulation.

Mixing behavioral economics and policy raises two questions: should we change behavior and if so, can we? Sometimes people make bad choices—they under-save, take on too much debt or risk. These behaviors appear irrational and lead to bad outcomes, which would seem to demand more regulation. But if these choices reflect individuals’ preferences and values can we justify changing their behavior? Part of a free-society is letting people make bad choices, as long as his or her irrational economic behavior doesn’t pose costs to others. For example: Someone who under-saves may wind up dependent on taxpayers for financial support. High household debt has been associated with a weaker economy…

It’s been argued that irrational economic behavior merits regulation to encourage or force choices that will benefit both the individual and the economy as a whole. But the limits of these policies are apparent in a new OECD report on the application of behavioral economics to policy. The report gives examples of regulations adopted by different OECD countries that draw on insights from behavioral economics. Thus it’s disappointing that, with all economists have learned studying behavioral economics the last ten years,   the big changes in regulation seem limited to more transparent fee disclosure, a ban on automatically selling people more goods than they explicitly ask for, and standard disclosures fees and energy use. These are certainly good policies. But is this a result of behavioral economics (helping consumers over-come behavioral bias that leads to sub-optimal choices) or is it simply requiring banks and merchants to be more honest?

Poor risk management and short-term thinking on Wall Street nearly took down the entire financial system. Can what we know about behavioral finance regulate Wall Street? According to Shiller, markets are inefficient and misprice assets because of behavioral biases (over-confidence, under-reaction to news, home bias). This leads to speculative bubbles. But it’s not clear what financial regulation can do to curb this behavior. According Gene Fama, Shiller’s co-laureate who believes markets are rational, (Disclosure: I used to work at Dimensional Fund Advisors where Fama is a consultant and shareholder) it’s not possible to systematically separate “irrational” behavior (that distorts prices) from healthy speculation, which aids price discovery. If speculators (who have an enormous financial interest) don’t know better, how can we expect regulators to?…

So far, the most promising use of behavioral economics has been in retirement saving. Automatically enrolling people into a company pension plan and raising their saving rates has been found to increase savings—especially among people not inclined to save. That is probably why the OECD report concedes behavioral economics has had the biggest impact in retirement saving….

The OECD report cites some other new policies based on behavioral science like the the 2009 CARD act in America. Credit card statements used to only list the minimum required payment, which people may have interpreted as a suggested payment plan and wound up taking years to pay their balance, incurring large fees. Now, in the US, statements must include how much it will cost to pay your balance within 36 months and the time and cost required to repay your balance if you pay the minimum. It’s still too early to see how this will impact behavior, but a 2013 study suggests it will offer modest savings to consumers, perhaps because the bias to under-value the future still exists.

But what’s striking from the OECD report is, when it comes to behavioral biases that contributed to the financial crisis (speculation on housing, too much housing debt, under-estimating risk), few policies have used what we’ve learned.”