The past five years have seen a
boom in media coverage and application in practice of insights from behavioral sciences,
particularly from behavioral economics. Books such as Nudge: Improving Decisions About Health, Wealth and Happiness by
Richard H Thaler and Cass R Sunstein, Predictably
Irrational: The Hidden Forces that Shape Our Decisions by Dan Ariely and Thinking, Fast and Slow by Daniel
Kahneman have contributed significantly to the popularization of behavioral
sciences and their application in practice.
The UK government has established
a “Nudge unit” which has the task of applying insights from behavioral sciences
into public policies. Apparently the US government is on the path of creating a
similar unit.
Businesses, particularly
marketing departments, are stepping up the application of this knowledge with
the aim of increasing sales and profits. NGOs use the findings in behavioral
sciences to increase the amounts collected in fundraising endeavors.
The truth is that applying
knowledge from behavioral sciences or nudging
is highly attractive and appealing. One reason for this is that nudging
promises large outcomes with small inputs (changes, investments etc.). The
second and most important reason is that Nudging
is simply cool.
Let’s focus a bit on what makes nudging so cool. My best (educated)
guess is that coolness is the result of the surprise we experience when
learning about findings in behavioral sciences. When we learn that simply changing
the default option in a form leads to huge differences in behaviors such as
enrollment in different programs we are amazed. This is because this finding
goes against the popular intuitions we hold. When we learn that diffusing a certain
smell in a shop leads to increase in sales and in the customers’ evaluations of
the service and the merchandise we experience the same high level of surprise;
again because we don’t consider that what we smell should make any difference
in our decisions and evaluations.
Knowledge from behavioral sciences is appealing and
surprising because we couldn’t think it was possible that a small change
in the context to make such a big difference in the behavior (outcome).
Knowledge from behavioral and
decision sciences is so cool that we all want to use it, we want to be in the
shoes of those researchers and after all, who wouldn’t want to increase sales,
donations or make their job easier by applying some cool tricks?
Nudging Seems Easy
Because small changes in the environment
can lead to huge changes in the behavior, nudging seams easy. Although you
couldn’t think that changing the structure of a form can have huge impact in
the number of people enrolling in a program, now that you know, it makes all
the sense in the world. Moreover, it seems so easy to do… after all, how hard
can it be to change a form?
It goes similar with using scent
in a shop. Once you know that diffusing the scent of chocolate in a book store
leads to an increase in sales of romantic books, it seems so easy to just place
some chocolates near the counter or buy some aerosols with chocolate smell and
place them around your shop.
After reading one of the books I
mentioned earlier or after viewing some interesting videos with behavioral
economics specialists we are aware of many “tricks” or tools that can be used
and there is a huge temptation to start applying them. However, the question is
which one? Should we simply pick up the one we found the most interesting?
Should we just do anything that comes to mind?
The main reason why Nudging seems easy is because individuals
are exposed to information on what works. People who want to start nudging often discard the context
in which it worked – such as book store – and most of the times the wannabe nudger knows close to zero on the psychological
mechanisms that underlie the alteration of behavior. Simply put, one knows that
something works, but doesn’t really understand why and often discards the
differences between the contexts in which the finding was made and the one in
which (s)he has to apply the finding.
Nudging seems easy ONLY POST FACTUM
Once you know it works it looks
easy, but it is damn hard to think of what would work before the fact and
before testing. Most researchers publish scientific papers on what works. Books
and mass-media give attention to what works. But behind all these things that
work, there are many more things that didn’t work. A researcher can’t publish
in a respectable scientific journal a paper which includes five failed
experiments, even if she spent half a year on a project that proved to give
insignificant results.
Remember that the surprise we
experience when hearing about the effectiveness of behavioral interventions
(nudges) comes from the fact that we couldn’t think it was possible! Now that
you want to design such nudges, you
have to think of something that previously was unthinkable. That’s not so easy,
is it?
If you want, things are similar
with the difference between explaining and predicting. Explaining why something
happened is infinitely easier than predicting the same event. Think for a few
seconds about the recession and banking crisis of 2008-2009. There were
countless people who showed up on TV or in the newspapers explaining in detail
how and why it happened. At the same time, very few of these people were able
to predict the same events.
Let me give you an example from
my own backyard. In October I’ll give
a training session on choice architecture and during the first day the ten
participants will learn about the established psychological effects on choice
such as the compromise effect, loss aversion, the status-quo bias etc. They will
also see illustrations of these effects put in practice. In the second day, during
the first hour the participants will see three case studies on how these effects
are used. Probably the most appealing case study will be the one on how Linked
In structured its offer for paid accounts.
I’m sure that these case studies
will be very interesting and things will make all the sense in the world.
However, after this first hour, participants will get to work on, first,
analyzing a choice set used by an on-line service provider. This I expect to go
quite smooth since they will only have to recognize the effects described in
the first day and presented at work in the first hour… But the fun begins only when the participants
will have to construct from scratch choice environments aimed at increasing
donations for a charity, increasing sales of high margin products for a company
that sells through a catalog and to help a museum increase its ticket sales for
tours outside the main exhibition.
Applying choice architecture in
an effective manner is far more difficult than seeing it already applied. It
will be a bit tough, but so is the work of creating behavioral interventions
(nudges) from scratch.
How to make the creation of nudges easier?
I have to be honest with you and
say that there aren’t five easy steps to
success. Creating behavioral interventions or nudges is hard and requires a lot of knowledge, work and testing.
What will help for sure is to
understand how and why these nudges work. Behind the examples you see published
in academic journals or in mass media there are some rules. Learn and
get an in depth understanding of these rules. My advice is to ask at least twice: why?
If you know that playing
classical music in a restaurant leads to an increase in sales in value, but not
in volume – people go more for the premium products, ask WHY?
The answer is that mental
constructs associated with high-class become more salient. After getting this
answer, you should ask again WHY? And then you should get the answer that
people associate classical music with high-class and that the music acts as
prime (priming tool).
This is only one illustration of getting
an in depth understanding on how nudges
work.
Don’t go head on
Even if nudging seems easy and
effective, you should think hard and look for the right intervention to use.
The kind of in depth knowledge I’ve illustrated above is needed to create
effective interventions. If you go head on and apply something that you find
cool, there is a big chance that it will not work.
Behavioral interventions
are science, not magic!
After you have designed one or
two carefully selected nudges, you should test if they work and my advice is to
run experiments. This is not easy and requires accuracy and patience. Don’t make
comparisons between before and after. There can be many reasons for why before
was different than after and some of them are unrelated to the nudge.
Should you not apply knowledge from behavioral
sciences?
I believe that businesses,
governments and NGOs should apply knowledge from behavioral sciences.
However, my main argument is that in order to create effective interventions
one needs to work professionally. There is a high risk of “nudge” becoming just
another buzz word used by people who don’t really understand its meaning.
Work with real professionals who
understand in depth how behavioral interventions work. Stay away from people who
promise fast miracles. Work with specialists who can give you pertinent answers
to at least two “Why” questions. Work with those who do / advise
experimentation in the sense of running controlled randomized experiments to
measure the effectiveness of the intervention.
Take Nudging Seriously!
