Policymakers around the world are embracing behavioural science


The Economist: “In 2013 thousands of school pupils in England received a letter from a student named Ben at the University of Bristol. The recipients had just gained good marks in their GCSEs, exams normally taken at age 16. But they attended schools where few pupils progressed to university at age 18, and those that did were likely to go to their nearest one. That suggested the schools were poor at nurturing aspiration. In his letter Ben explained that employers cared about the reputation of the university a job applicant has attended. He pointed out that top universities can be a cheaper option for poorer pupils, because they give more financial aid. He added that he had not known these facts at the recipient’s age.

The letters had the effect that was hoped for. A study published in March found that after leaving school, the students who received both Ben’s letter and another, similar one some months later were more likely to be at a prestigious university than those who received just one of the letters, and more likely again than those who received none. For each extra student in a better university, the initiative cost just £45 ($58), much less than universities’ own attempts to broaden their intake. And the approach was less heavy-handed than imposing quotas for poorer pupils, an option previous governments had considered. The education department is considering rolling out the scheme….

Some critics feared that nudges would do little good, and that their effects would fade over time. Others warned that governments were straying perilously close to mass manipulation. More recently, some of the findings on which the behavioural sciences rest have been questioned, as researchers in many fields have sought to replicate famous results, and failed.

By and large those doubts have been allayed. Even if specific results turn out to be mistaken, an experimental, iterative, data-driven approach to policymaking is gaining ground in many places, not just in dedicated units, but throughout government.

Nudging is hardly new. “In Genesis, Satan nudged, and Eve did too,” writes Cass Sunstein of Harvard University. From the middle of the 20th century psychologists such as Stanley Milgram and Philip Zimbardo showed how sensitive humans are to social pressure. Daniel Kahneman and Amos Tversky described the mental shortcuts and biases that influence decision-making. Dale Carnegie and Robert Cialdini wrote popular books on persuasion. Firms, especially in technology, retail and advertising, used behavioural science to shape brand perception and customer behaviour—and, ultimately, to sell more stuff.

But governments’ use of psychological insights to achieve policy goals was occasional and unsystematic. According to David Halpern, the boss of BIT, as far as policymakers were concerned, psychology was “the sickly sibling to economics”. That began to change after Mr Sunstein and Richard Thaler, an economist, published “Nudge”, in 2008. The book attacked the assumption of rational decision-making inherent in most economic models and showed how “choice architecture”, or context, could be changed to “nudge” people to make better choices…..

Now many governments are turning to nudges to save money and do better. In 2014 the White House opened the Social and Behavioural Sciences Team. A report that year by Mark Whitehead of Aberystwyth University counted 51 countries in which “centrally directed policy initiatives” were influenced by behavioural sciences. Non-profit organisations such as Ideas42, set up in 2008 at Harvard University, help run dozens of nudge-style trials and programmes around the world. In 2015 the World Bank set up a group that is now applying behavioural sciences in 52 poor countries. The UN is turning to nudging to help hit the “sustainable development goals”, a list of targets it has set for 2030….

Among the most effective nudges are “social” ones: those that communicate norms or draw on people’s networks. A scheme tested in Guatemala with help from the World Bank and BIT tweaked the wording of letters sent to people and firms who had failed to submit tax returns the previous year. The letters that framed non-payment as an active choice, or noted that paying up is more common than evasion, cut the number of non-payers in the following year and increased the average sum paid. And a trial involving diabetes shows that it matters to nudge at the right moment. In 2014 Hamad Medical Corporation, a health-care provider in Qatar, raised take-up rates for diabetes screening by offering it during Ramadan. That meant most Qataris were fasting, so the need to do so before the test imposed no extra burden….(More)”.

Tragic Design


Book by Cynthia Savard Saucier and Jonathan Shariat: “Bad design is everywhere, and its cost is much higher than we think. In this thought-provoking book, authors Jonathan Shariat and Cynthia Savard Saucier explain how poorly designed products can anger, sadden, exclude, and even kill people who use them. The designers responsible certainly didn’t intend harm, so what can you do to avoid making similar mistakes?

Tragic Design examines real case studies that show how certain design choices adversely affected users, and includes in-depth interviews with authorities in the design industry. Pick up this book and learn how you can be an agent of change in the design community and at your company.

You’ll explore:

  • Designs that can kill, including the bad interface that doomed a young cancer patient
  • Designs that anger, through impolite technology and dark patterns
  • How design can inadvertently cause emotional pain
  • Designs that exclude people through lack of accessibility, diversity, and justice
  • How to advocate for ethical design when it isn’t easy to do so
  • Tools and techniques that can help you avoid harmful design decisions
  • Inspiring professionals who use design to improve our world…(More)”.

Handbook of Behavioural Economics and Smart Decision-Making


Handbook edited by Morris Altman: “… a unique and original contribution of over thirty chapters on behavioural economics, examining and addressing an important stream of research where the starting assumption is that decision-makers are for the most part relatively smart or rational. This particular approach is in contrast to a theme running through much contemporary work where individuals’ behaviour is deemed irrational, biased, and error-prone, often due to how people are hardwired. In the smart people approach, where errors or biases occur and when social dilemmas arise, more often than not, improving the decision-making environment can repair these problems without hijacking or manipulating the preferences of decision-makers. This book covers a wide-range of themes from micro to macro, including various sub-disciplines within economics such as economic psychology, heuristics, fast and slow-thinking, neuroeconomics, experiments, the capabilities approach, institutional economics, methodology, nudging, ethics, and public policy….(More)”.

Human Agency and Behavioral Economics: Nudging Fast and Slow


Book by Cass R. Sunstein: “This Palgrave Pivot offers comprehensive evidence about what people actually think of “nudge” policies designed to steer decision makers’ choices in positive directions. The data reveal that people in diverse nations generally favor nudges by strong majorities, with a preference for educative efforts – such as calorie labels – that equip individuals to make the best decisions for their own lives. On the other hand, there are significant arguments for noneducational nudges – such as automatic enrollment in savings plans – as they allow people to devote their scarce time and attention to their most pressing concerns.  The decision to use either educative or noneducative nudges raises fundamental questions about human freedom in both theory and practice. Sunstein’s findings and analysis offer lessons for those involved in law and policy who are choosing which method to support as the most effective way to encourage lifestyle changes….(More)”.

The Nudge Wars: A Glimpse into the Modern Socialist Calculation Debate


Paper by Abigail Devereaux: “Nudge theory, the preferences-neutral subset of modern behavioral economic policy, is premised on irrational decision-making at the level of the individual agent. We demonstrate how Hayek’s epistemological argument, developed primarily during the socialist calculation debate in response to claims made by fellow economists in favor of central planning, can be extended to show how nudge theory requires social architects to have access to fundamentally unascertainable implicit and local knowledge. We draw parallels between the socialist calculation debate and nudge theoretical arguments throughout, particularly the “libertarian socialism” of H. D. Dickinson and the “libertarian paternalism” of Cass Sunstein and Richard Thaler. We discuss the theory of creative and computable economics in order to demonstrate how nudges are provably not preferences-neutral, as even in a state of theoretically perfect information about current preferences, policy-makers cannot access information about how preferences may change in the future. We conclude by noting that making it cheaper to engage in some methods of decision-making is analogous to subsidizing some goods. Therefore, the practical consequences of implementing nudge theory could erode the ability of individuals to make good decisions by destroying the kinds of knowledge-encoding institutions that endogenously emerge to assist agent decision-making….(More)”

For Whose Benefit? The Biological and Cultural Evolution of Human Cooperation


Book by Patrik Lindenfors: “… takes the reader on a journey, navigating the enigmatic aspects of cooperation; a journey that starts inside the body and continues via our thoughts to the human super-organism.

Cooperation is one of life’s fundamental principles. We are all made of parts – genes, cells, organs, neurons, but also of ideas, or ‘memes’. Our societies too are made of parts – us humans. Is all this cooperation fundamentally the same process?

From the smallest component parts of our bodies and minds to our complicated societies, everywhere cooperation is the organizing principle. Often this cooperation has emerged because the constituting parts have benefited from the interactions, but not seldom the cooperating units appear to lose on the interaction. How then to explain cooperation? How can we understand our intricate societies where we regularly provide small and large favors for people we are unrelated to, know, or even never expect to meet again? Where does the idea come from that it is right to risk one’s life for country, religion or freedom? The answers seem to reside in the two processes that have shaped humanity: biological and cultural evolution….(More)”

Nudging people to make good choices can backfire


Bruce Bower in ScienceNews: “Nudges are a growth industry. Inspired by a popular line of psychological research and introduced in a best-selling book a decade ago, these inexpensive behavior changers are currently on a roll.

Policy makers throughout the world, guided by behavioral scientists, are devising ways to steer people toward decisions deemed to be in their best interests. These simple interventions don’t force, teach or openly encourage anyone to do anything. Instead, they nudge, exploiting for good — at least from the policy makers’ perspective — mental tendencies that can sometimes lead us astray.

But new research suggests that low-cost nudges aimed at helping the masses have drawbacks. Even simple interventions that work at first can lead to unintended complications, creating headaches for nudgers and nudgees alike…

Promising results of dozens of nudge initiatives appear in two government reports issued last September. One came from the White House, which released the second annual report of its Social and Behavioral Sciences Team. The other came from the United Kingdom’s Behavioural Insights Team. Created by the British government in 2010, the U.K. group is often referred to as the Nudge Unit.

In a September 20, 2016, Bloomberg View column, Sunstein said the new reports show that nudges work, but often increase by only a few percentage points the number of people who, say, receive government benefits or comply with tax laws. He called on choice architects to tackle bigger challenges, such as finding ways to nudge people out of poverty or into higher education.

Missing from Sunstein’s comments and from the government reports, however, was any mention of a growing conviction among some researchers that well-intentioned nudges can have negative as well as positive effects. Accepting automatic enrollment in a company’s savings plan, for example, can later lead to regret among people who change jobs frequently or who realize too late that a default savings rate was set too low for their retirement needs. E-mail reminders to donate to a charity may work at first, but annoy recipients into unsubscribing from the donor list.

“I don’t want to get rid of nudges, but we’ve been a bit too optimistic in applying them to public policy,” says behavioral economist Mette Trier Damgaard of Aarhus University in Denmark.

Nudges, like medications for physical ailments, require careful evaluation of intended and unintended effects before being approved, she says. Policy makers need to know when and with whom an intervention works well enough to justify its side effects.

Default downer

That warning rings especially true for what is considered a shining star in the nudge universe — automatic enrollment of employees in retirement savings plans. The plans, called defaults, take effect unless workers decline to participate….

But little is known about whether automatic enrollees are better or worse off as time passes and their personal situations change, says Harvard behavioral economist Brigitte Madrian. She coauthored the 2001 paper on the power of default savings plans.

Although automatic plans increase savings for those who otherwise would have squirreled away little or nothing, others may lose money because they would have contributed more to a self-directed retirement account, Madrian says. In some cases, having an automatic savings account may encourage irresponsible spending or early withdrawals of retirement money (with penalties) to cover debts. Such possibilities are plausible but have gone unstudied.

In line with Madrian’s concerns, mathematical models developed by finance professor Bruce Carlin of the University of California, Los Angeles and colleagues suggest that people who default into retirement plans learn less about money matters, and share less financial information with family and friends, than those who join plans that require active investment choices.

Opt-out savings programs “have been oversimplified to the public and are being sold as a great way to change behavior without addressing their complexities,” Madrian says. Research needs to address how well these plans mesh with individuals’ personalities and decision-making styles, she recommends….

Researchers need to determine how defaults and other nudges instigate behavior changes before unleashing them on the public, says philosopher of science Till Grüne-Yanoff of the Royal Institute of Technology in Stockholm….

Sometimes well-intentioned, up-front attempts to get people to do what seems right come back to bite nudgers on the bottom line.

Consider e-mail prompts and reminders. ….A case in point is a study submitted for publication by Damgaard and behavioral economist Christina Gravert of the University of Gothenburg in Sweden. E-mailed donation reminders sent to people who had contributed to a Danish anti-poverty charity increased the number of donations in the short term, but also triggered an upturn in the number of people unsubscribing from the list.

People’s annoyance at receiving reminders perceived as too frequent or pushy cost the charity money over the long haul, Damgaard holds. Losses of list subscribers more than offset the financial gains from the temporary uptick in donations, she and Gravert conclude.

“Researchers have tended to overlook the hidden costs of nudging,” Damgaard says….(More)”

Analytics Tools Could Be the Key to Effective Message-Driven Nudging


 in Government Technology: “Appealing to the nuances of the human mind has been a feature of effective governance for as long as governance has existed, appearing prominently in the prescriptions of every great political theorist from Plato to Machiavelli. The most recent and informed iteration of this practice is nudging: leveraging insights about how humans think from behavioral science to create initiatives that encourage desirable behaviors.

Public officials nudge in many ways. Some seek to modify people’s behavior by changing the environments in which they make decisions, for instance moving vegetables to the front of a grocery store to promote healthy eating. Others try to make desirable behaviors easier, like streamlining a city website to make it simpler to sign up for a service. Still others use prompts like email reminders of a deadline to receive a free checkup to nudge people to act wisely by providing useful information.

Thus far, examples of the third type of nudging — direct messaging that prompts behavior — have been decidedly low tech. Typical initiatives have included sending behaviorally informed letters to residents who have not complied with a city code or mailing out postcard reminders to renew license plates. Governments have been attracted to these initiatives for their low cost and proven effectiveness.

While these low-tech nudges should certainly continue, cities’ recent adoption of tools that can mine and analyze data instantaneously has the potential to greatly increase the scope and effectiveness of message-driven nudging.

For one, using Internet of Things (IoT) ecosystems, cities can provide residents with real-time information so that they may make better-informed decisions. For example, cities could connect traffic sensors to messaging systems and send subscribers text messages at times of high congestion, encouraging them to take public transportation. This real-time information, paired with other nudges, could increase transit use, easing traffic and bettering the environment…
Instantaneous data-mining tools may also prove useful for nudging citizens in real time, at the moments they are most likely to partake in detrimental behavior. Tools like machine learning can analyze users’ behavior and determine if they are likely to make a suboptimal choice, like leaving the website for a city service without enrolling. Using clickstream data, the site could determine if a user is likely to leave and deliver a nudge, for example sending a message explaining that most residents enroll in the service. This strategy provides another layer of nudging, catching residents who may have been influenced by an initial nudge — like a reminder to sign up for a service or streamlined website — but may need an extra prod to follow through….(More)”

Digital Nudging: Altering User Behavior in Digital Environments


Tobias Mirsch,Christiane Lehrer, and Reinhard Jung in Wirtschaftsinformatik: “Individuals make increasingly more decisions on screens, such as those on websites or mobile apps. However, the nature of screens and the vast amount of information available online make individuals particularly prone to deficient decisions. Digital nudging is an approach based on insights from behavioral economics that applies user interface (UI) design elements to affect the choices of users in digital environments. UI design elements include graphic design, specific content, wording or small features. To date, little is known about the psychological mechanisms that underlie digital nudging. To address this research gap, we conducted a systematic literature review and provide a comprehensive overview of relevant psychological effects and exemplary nudges in the physical and digital sphere. These insights serve as a valuable basis for researchers and practitioners that aim to study or design information systems and interventions that assist user decision making on screens….(More)”

#Republic: Divided Democracy in the Age of Social Media


Book by Cass Sunstein: “As the Internet grows more sophisticated, it is creating new threats to democracy. Social media companies such as Facebook can sort us ever more efficiently into groups of the like-minded, creating echo chambers that amplify our views. It’s no accident that on some occasions, people of different political views cannot even understand each other. It’s also no surprise that terrorist groups have been able to exploit social media to deadly effect.

Welcome to the age of #Republic.

In this revealing book, Cass Sunstein, the New York Times bestselling author of Nudge and The World According to Star Wars, shows how today’s Internet is driving political fragmentation, polarization, and even extremism—and what can be done about it.

Thoroughly rethinking the critical relationship between democracy and the Internet, Sunstein describes how the online world creates “cybercascades,” exploits “confirmation bias,” and assists “polarization entrepreneurs.” And he explains why online fragmentation endangers the shared conversations, experiences, and understandings that are the lifeblood of democracy.

In response, Sunstein proposes practical and legal changes to make the Internet friendlier to democratic deliberation. These changes would get us out of our information cocoons by increasing the frequency of unchosen, unplanned encounters and exposing us to people, places, things, and ideas that we would never have picked for our Twitter feed.

#Republic need not be an ironic term. As Sunstein shows, it can be a rallying cry for the kind of democracy that citizens of diverse societies most need….(More)”