Art And Science Of The Nudge – Innovation In Indian Policymaking

Curated on Posted on by Stefaan Verhulst

Vinayak Dalmia at Swarajya: “In September last year, a news release stated that NITI Aayog, in partnership with the Bill & Melinda Gates Foundation, will help set up a “nudge unit”. The stated aim is to deepen the reach of certain flagship programmes including Swachh Bharat, Jan Dhan Yojana and Skill Development.

Mainstream publications have also begun to argue for the same. Since a lot of India’s social problems are behavioural in nature, subtle, inexpensive changes in the “environment” prove more effective than elaborate laws or policies. Prime Minister Narendra Modi himself hinted at the psychological nature of ills such as gender violence and sanitation. Pratap Bhanu Mehta states – “social failure is as serious a matter as market failure”. The Prime Minister has started with moral persuasion on issues of cleanliness or giving up LPG (liquefied petroleum gas) subsidies. A formal and rigorous approach to some of these problems should be the next logical step.

Government and/or policymakers are in many ways architects designing “choices” and social environments we live in. As designers, they must leverage the fundamental truth that all actors and agents are psychological beings having less-than-perfect rationality. So, while behavioural science operates on the premise that the brain is prone to making mistakes, psychology can address the flaws and design smarter policies.

For example, open defecation is a big problem in India. It stands tangential to the Prime Minister’s Swachh Bharat dream. In spite of building toilets, in some cases, the usage rates are no more than 50 per cent. World Bank economist Nidhi Khurana has proposed communicating the harms of this behaviour as opposed to the benefits of using a toilet. In effect, she is suggesting the use of the theory of “loss aversion” which states that people value potential losses more than potential gains (on average, twice as much). Studies have also found that subtle changes in the sense of ownership bring significant improvements.

Noteworthy is the immunisation rate in Rajasthan. It increased after free lentils were given to women who brought their children to dispensaries. Colour-coded footprints in the Delhi Metro is borrowed from Copenhagen in order to institute better civic sense. In Kenya, weekly text reminders help ensure HIV patients adhere to medication schedules….(More)”.

Misconceptions About Nudges

Curated on Posted on by Stefaan Verhulst

New paper by Cass R. Sunstein:  “Some people believe that nudges are an insult to human agency; that nudges are based on excessive trust in government; that nudges are covert; that nudges are manipulative; that nudges exploit behavioral biases; that nudges depend on a belief that human beings are irrational; and that nudges work only at the margins and cannot accomplish much. These are misconceptions. Nudges always respect, and often promote, human agency; because nudges insist on preserving freedom of choice, they do not put excessive trust in government; nudges are generally transparent rather than covert or forms of manipulation; many nudges are educative, and even when they are not, they tend to make life simpler and more navigable; and some nudges have quite large impacts….(More)”

Nudging and Boosting: Steering or Empowering Good Decisions

Curated on Posted on by Stefaan Verhulst

Ralph Hertwig and Till Grüne-Yanoff in Perspectives on Psychological Science: “In recent years, policy makers worldwide have begun to acknowledge the potential value of insights from psychology and behavioral economics into how people make decisions. These insights can inform the design of nonregulatory and nonmonetary policy interventions—as well as more traditional fiscal and coercive measures. To date, much of the discussion of behaviorally informed approaches has emphasized “nudges,” that is, interventions designed to steer people in a particular direction while preserving their freedom of choice. Yet behavioral science also provides support for a distinct kind of nonfiscal and noncoercive intervention, namely, “boosts.” The objective of boosts is to foster people’s competence to make their own choices—that is, to exercise their own agency. Building on this distinction, we further elaborate on how boosts are conceptually distinct from nudges: The two kinds of interventions differ with respect to (a) their immediate intervention targets, (b) their roots in different research programs, (c) the causal pathways through which they affect behavior, (d) their assumptions about human cognitive architecture, (e) the reversibility of their effects, (f) their programmatic ambitions, and (g) their normative implications. We discuss each of these dimensions, provide an initial taxonomy of boosts, and address some possible misconceptions….(More)”.

The Nudging Divide in the Digital Big Data Era

Curated on Posted on by Stefaan Verhulst

Julia M. Puaschunder in the International Robotics & Automation Journal: “Since the end of the 1970ies a wide range of psychological, economic and sociological laboratory and field experiments proved human beings deviating from rational choices and standard neo-classical profit maximization axioms to fail to explain how human actually behave. Behavioral economists proposed to nudge and wink citizens to make better choices for them with many different applications. While the motivation behind nudging appears as a noble endeavor to foster peoples’ lives around the world in very many different applications, the nudging approach raises questions of social hierarchy and class division. The motivating force of the nudgital society may open a gate of exploitation of the populace and – based on privacy infringements – stripping them involuntarily from their own decision power in the shadow of legally-permitted libertarian paternalism and under the cloak of the noble goal of welfare-improving global governance. Nudging enables nudgers to plunder the simple uneducated citizen, who is neither aware of the nudging strategies nor able to oversee the tactics used by the nudgers.

The nudgers are thereby legally protected by democratically assigned positions they hold or by outsourcing strategies used, in which social media plays a crucial rule. Social media forces are captured as unfolding a class dividing nudgital society, in which the provider of social communication tools can reap surplus value from the information shared of social media users. The social media provider thereby becomes a capitalist-industrialist, who benefits from the information shared by social media users, or so-called consumer-workers, who share private information in their wish to interact with friends and communicate to public. The social media capitalist-industrialist reaps surplus value from the social media consumer-workers’ information sharing, which stems from nudging social media users. For one, social media space can be sold to marketers who can constantly penetrate the consumer-worker in a subliminal way with advertisements. But also nudging occurs as the big data compiled about the social media consumer-worker can be resold to marketers and technocrats to draw inferences about consumer choices, contemporary market trends or individual personality cues used for governance control, such as, for instance, border protection and tax compliance purposes.

The law of motion of the nudging societies holds an unequal concentration of power of those who have access to compiled data and who abuse their position under the cloak of hidden persuasion and in the shadow of paternalism. In the nudgital society, information, education and differing social classes determine who the nudgers and who the nudged are. Humans end in different silos or bubbles that differ in who has power and control and who is deceived and being ruled. The owners of the means of governance are able to reap a surplus value in a hidden persuasion, protected by the legal vacuum to curb libertarian paternalism, in the moral shadow of the unnoticeable guidance and under the cloak of the presumption that some know what is more rational than others. All these features lead to an unprecedented contemporary class struggle between the nudgers (those who nudge) and the nudged (those who are nudged), who are divided by the implicit means of governance in the digital scenery. In this light, governing our common welfare through deceptive means and outsourced governance on social media appears critical. In combination with the underlying assumption of the nudgers knowing better what is right, just and fair within society, the digital age and social media tools hold potential unprecedented ethical challenges….(More)”

Responding to problems: actions are rewarded, regardless of the outcome

Curated on Posted on by Stefaan Verhulst

Asmus Leth Olsen at Public Management Review: “When faced with a problem, policymakers have a choice of action or inaction. Psychological research shows varying results on how individuals evaluate (in)actions conditional on the subsequent outcome. I replicate, generalize, and extend this research into a public management setting with two independent experiments embedded in a nationally representative sample of Danish citizens (n = 2,007).

Both experiments show that actions are evaluated more positively than inactions – regardless of the outcome. This finding runs contrary to the inaction (or omission) bias but is consistent with evidence on a “norm of action”, in response to poor performance in political–administrative settings….(More)”

Nudges in a post-truth world

Curated on Posted on by Stefaan Verhulst

Neil Levy at the Journal of Medical Ethics: “Nudges—policy proposals informed by work in behavioural economics and psychology that are designed to lead to better decision-making or better behaviour—are controversial. Critics allege that they bypass our deliberative capacities, thereby undermining autonomy and responsible agency. In this paper, I identify a kind of nudge I call a nudge to reason, which make us more responsive to genuine evidence. I argue that at least some nudges to reason do not bypass our deliberative capacities. Instead, use of these nudges should be seen as appeals to mechanisms partially constitutive of these capacities, and therefore as benign (so far as autonomy and responsible agency are concerned). I sketch some concrete proposals for nudges to reason which are especially important given the apparent widespread resistance to evidence seen in recent political events….(More)”.

Some Countries Like ‘Nudges’ More Than Others

Curated on Posted on by Stefaan Verhulst

Cass Sunstein at Bloomberg: “All over the world, private and public institutions have been adopting “nudges” — interventions that preserve freedom of choice, but that steer people in a particular direction.

A GPS device nudges you. So does a reminder from your doctor, informing you that you have an appointment next Wednesday; an automatic enrollment policy from your employer, defaulting you into a 401(k) plan; and a calorie label at fast-food restaurants, telling you that a cheeseburger won’t be great for your waistline.

Recent evidence demonstrates that nudges can be amazingly effective — far more so, per dollar spent, than other tools, such as economic incentives. But a big question remains: Across different nations, do nudges have the same impact? Here’s a cautionary note.

One of the most famous success stories in the annals of nudging comes from the U.K. To encourage delinquent taxpayers to pay up, British officials simply informed them, by letter, that the overwhelming majority of British taxpayers pay their taxes on time.

It worked. Within just a few weeks, the letters produced millions of dollars in additional revenue. Consistent with standard findings in behavioral science, recipients of the letters didn’t like learning that they were deviating from the social norm. Like most of us, they didn’t want to be creeps or shirkers, and so they paid up.

For other nations, including the U.S., that was an intriguing finding. So our Department of Treasury tried the same approach. It sent letters to delinquent taxpayers, informing them (accurately) that 91 percent of American taxpayers pay on time. On the basis of the British data, the expectation was that a lot of people would be ashamed, and pay their taxes.

Except they didn’t. The U.S. Treasury didn’t get any more money.

How come? It’s reasonable to speculate that in the U.S., delinquent taxpayers just don’t care about the social norm. If they learn about it, they still aren’t motivated to pay.

This finding demonstrates that different groups can react very differently to nudges. It’s well known that when people are told that they are using more energy than their neighbors, they scale back — so that information is an effective nudge. But a study in California suggests that things are a bit more complicated….

In general, we don’t yet have a lot of evidence of international differences on the impact of nudges. But it would be surprising if such evidence doesn’t start to accumulate. Wherever people begin with strong preferences, and don’t like the direction in which they are being nudged, nudges are going to have a weaker effect.

For many nudges, that’s just fine. Actually, it’s part of the point….(More)”.

Towards Crowd-Scale Deliberation

Curated on Posted on by Stefaan Verhulst

Paper by Mark Klein: “Let us define deliberation as the activity where groups of people (1) identify possible solutions for a problem, (2) evaluate these alternatives, and (3) select the solution(s) that best meet their needs. Deliberation processes have changed little in centuries. Typically, small groups of powerful players craft policies behind closed doors, and then battle to engage wider support for their preferred options. Most people affected by the decisions have at best limited input into defining the solution options. This approach has become increasingly inadequate as the scale and complexity of the problems we face has increased. Many important ideas and perspectives simply do not get incorporated, squandering the opportunity for far superior outcomes. We have the potential to do much better by radically widening the circle of people involved in complex deliberations, moving from “team” scales (tens of participants) to “crowd” scales (hundreds, thousands, or more).

This is because crowd-scale interactions have been shown to produce, in appropriate circumstances, such powerful emergent phenomena as:

  • The long tail: crowd-scale participation enables access to a much greater diversity of ideas than would otherwise be practical: potentially superior solutions “small voices” (the tail of the frequency distribution) have a chance to be heard .
  • Idea synergy: the ability for users to share their creations in a common forum can enable a synergistic explosion of creativity, since people often develop new ideas by forming novel combinations and extensions of ideas that have been put out by others.
  • Many eyes: crowds can produce remarkably high-quality results (e.g. in open source software) by virtue of the fact that there are multiple independent verifications – many eyes continuously checking the shared content for errors and correcting them .
  • Wisdom of the crowds: large groups of (appropriately independent, motivated and informed) contributors can collectively make better judgments than those produced by the individuals that make them up, often exceeding the performance of experts,because their collective judgment cancels out the biases and gaps of the individual members…

Our team has been developing crowd-scale deliberation support technologies that address these three fundamental challenges by enabling:

  • better ideation: helping crowds develop better solution ideas
  • better evaluation: helping crowds evaluate potential solutions more accurately
  • better decision-making: helping crowds select pareto-optimal solutions…(More)”.

Should Governments Invest More in Nudging?

Curated on Posted on by Stefaan Verhulst

Shlomo Benartzi, John Beshears, Katherine L. Milkman et al in Psychological Science: “Governments are increasingly adopting behavioral science techniques for changing individual behavior in pursuit of policy objectives. The types of “nudge” interventions that governments are now adopting alter people’s decisions without coercion or significant changes to economic incentives. We calculated ratios of impact to cost for nudge interventions and for traditional policy tools, such as tax incentives and other financial inducements, and we found that nudge interventions often compare favorably with traditional interventions. We conclude that nudging is a valuable approach that should be used more often in conjunction with traditional policies, but more calculations are needed to determine the relative effectiveness of nudging….(More)”.

How to increase public support for policy: understanding citizens’ perspectives

Curated on Posted on by Stefaan Verhulst

Peter van Wijck and Bert Niemeijer at LSE Blog: “To increase public support, it is essential to anticipate what reactions they will have to policy. But how to do that? Our framework combines insights from scenario planning and frame analysis. Scenario planning starts from the premise that we cannot predict the future. We can, however, imagine different plausible scenarios, different plausible future developments. Scenarios can be used to ask a ‘what if’ question. If a certain scenario were to develop, what policy measures would be required?  By the same token, scenarios may be used as test-conditions for policy-measures. Kees van der Heijden calls this ‘wind tunnelling’.

Frame-analysis is about how we interpret the world around us. Frames are mental structures that shape the way we see the world. Based on a frame, an individual perceives societal problems, attributes these problems to causes, and forms ideas on instruments to address the problems. Our central idea is that policy-makers may use citizens’ frames to reflect on their policy frame. Citizens’ frames may, in other words, be used to test conditions in a wind tunnel. The line of reasoning is summarized in the figure.

Policy frames versus citizens’ frames

policy framinng

The starting-points of the figure are the policy frame and the citizens’ frames. Arrow 1 and 2 indicate that citizens’ reactions depend on both frames. A citizen can be expected to respond positively in case of frame alignment. Negative responses can be expected if policy-makers do not address “the real problems”, do not attribute problems to “the real causes”, or do not select “adequate instruments”. If frames do not align, policy-makers are faced with the question of how to deal with it (arrow 3). First, they may reconsider the policy frame (arrow 4). That is, are there reasons to reconsider the definition of problems, the attribution to causes, and/or the selection of instruments? Such a “reframing” effectively amounts to the formulation of a new (or adjusted) policy-frame. Second, policy-makers may try to influence citizens’ frames (arrow 5). This may lead to a change in what citizens define as problems, what they consider to be the causes of problems and what they consider to be adequate instruments to deal with the problems.

Two cases: support for victims and confidence in the judiciary

To apply our framework in practice, we developed a three-step method. Firstly, we reconstruct the policy frame. Here we investigate what policy-makers see as social problems, what they assume to be the causes of these problems, and what they consider to be appropriate instruments to address these problems. Secondly, we reconstruct contrasting citizens’ frames. Here we use focus groups, where contrasting groups are selected based on a segmentation model. Finally, we engage in a “wind tunnelling exercise”. We present the citizens’ frames to policy-makers. And we ask them to reflect on the question of how the different groups can be expected to react on the policy measures selected by the policy-makers. In fact, this step is what Schön and Rein called “frame reflection”….(More)”.