I attended the Behavioral Science and Policy Association conference last month and learned a great deal about the latest thinking in nudges, choice architecture, social norms, persuasion and how these can improve policies and decisions that people make. I went hoping to get some good ideas to apply to my company, Decision Fish, and to ensure that the economic policy class that I teach at CUNY City College has the latest thinking. Here are some very brief highlights from most of the sessions that I attended.
- Authors Shaping New Perspectives
- Bob Cialdini and “Pre-Suasion”: There are lots of things you can do to increase the chances of getting someone to agree even before you deliver the message. For example, you can “prime” people with a related concept beforehand. He described two versions of a furniture store’s landing page, one with clouds and one with pennies. The reader can guess which one caused users to be more comfort- vs. money-conscious.
- Steven Sloman and “The Knowledge Illusion”: People generally know a lot less than they think about how things really work. Consequently, true knowledge is distributed among many people. He suggests that getting people to think causally will help uncover common ground
- Scott Sonenshein and “Stretch”: We can often accomplish more than we think we can with limited resources. It may even be helpful to introduce artificial constraints to increase creativity and satisfaction.
- Policy-Focused Addresses
- Rick Larrick: We can nudge behaviors to green ends. Instead of disclosing a car’s mileage in terms of miles per gallon, show gallons per 100 miles (5) or fuel costs (6), which is more intuitive and understandable. “Let’s not ask people to take reciprocals!”, he says.
- Bridget Terry Long: Contrary to popular belief, family income has a greater impact on matriculation and persistence in university than academic preparation. Her proposed solutions include simpler forms and reminders for underperforming students to get support.
- Jens Ludwig: Justice and Ethics. Jens described how a simpler summons materially reduces the number of people who fail to appear in court, and demonstrated an algorithm that he says can do a much better job of predicting who among the arrested should be jailed vs. released. Judges may be biased by irrelevant information such as appearance.
- Lightning Session 1: Energy & Environment
- Derrick Kohler spoke about how even the 97% consensus around climate change can appear to be uncertain to the public because people don’t understand that debate is fundamental to scientific progress.
- Arlie Liberberman spoke about how the framing of incentive policies can harness the power of social norms. Surcharges do a better job of establishing social norms and changing behaviors than discounts (say, for using your own bag at the grocery store).
- Christopher Ungemach: This was one of my favorite talks. According to Mr. Ungemach, every attribute of a decision can be expressed in many ways. For example, miles per gallon vs. gallons per mile vs. fuel cost per year. These can activate people’s dormant objectives and nudge them to the option that best achieves those objectives. Such “Decision Sign Posts” are a type of nudge that is not subject to the risk of being “more of a shove than a nudge” and they don’t exploit people’s biases like typical nudges. Instead, they help focus people on actions to achieve their pre-existing goals.
- Policy Challenge: In this audience participation exercise, a representative of a Rhode Island utility explained how a power shutoff due to nonpayment can lead to a “cascade” of further problems including homelessness and hospitalization. A panel of behavioral experts made some observations and suggestions. The audience broke into groups of four or five to come up with possible solutions. Since many people simply don’t open their bills, my group suggested using an orange colored envelope with notice of impending shutoff printed on the outside. The messaging would be targeted to specific neighborhoods, and auto-enroll people in a level payment plan that includes a savings incentive to participate.
- Mistakes Were Made But Not By Me: Bob Cialdini explained how it is a mistake to try to reduce “bad” behaviors by saying that too many people are doing it. For example, Iron Eyes Cody PSA. The power of social norms is such that people are more likely to litter if the area around them already has a lot of litter. (Alas, and perhaps unsurprisingly, Keep America Beautiful was emphatically not interested in Bob’s analysis.) Also, Bob explained that many managers resist evidence-based management because it undermines authority, slows down decision-making and because they are “not rewarded for doing what works.” For example, it is NOT true as is commonly believed, that the incompetent benefit more from feedback than the competent. Organizations should build transparency, feedback about outcomes and emphasize learning by doing.
- Lightning Talk Session 2: Financial Decision Making
- Luisa Blanco Royal reported on a study of an intervention to promote retirement savings among Hispanics. She found that there’s a social norm of not saving for retirement (43% of Hispanics have not saved at all compared to 26% of whites.) In the intervention, they sought to make saving for retirement more commonplace, more vivid, and held people more accountable, which turned out to be effective.
- Tatiana Homonoff described a field experiment where student loan borrowers who got frequent updates on their credit scores were less likely to pay late and more likely to improve their scores.
- Heather Kappes discussed how children perceive spending as a signal of wealth. While wealth is invisible, spending is very visible. So, we need to re-frame wealth more accurately as the result of not spending.
- Stephanie Tepper and Ari Kagan described how embedding a savings product with a loan helps reduce the pain of savings. Increased savings can reduce the risk of default on the associated loan.
- Policy-Focused Address
- Peter Ubel argued that it’s naïve to think that making consumers have “more skin in the game” by having large co-pays and deductibles will make them shop around more for better deals. Since consumers rarely get actionable information and analysis, they will often make mistakes in choosing insurance plans. They’ll follow their doctors’ advice, which often does not reflect patients’ goals and concerns over cost. He argues that patient goals need to be a much bigger part of the patient-doctor conversation.
- Bridgitte Madrian argued that we ought to “design financial institutions from the ground up with behavioral insights.” She noted that of every $2 saved for retirement, $1 “leaks” before retirement and that only 40% of Americans have an emergency fund. She proposes that employers offer a joint rainy day and retirement fund that uses mental accounting as a psychological barrier to using retirement savings for other purposes (Decision Fish also relies a bit on mental accounting to help people protect their rainy-day funds).
Whew…that was a big day. And you got the gist of it in less than six minutes! There was a wide range of authors and researchers who generally agree on the benefits of using evidence-based behavioral interventions to improve outcomes. Again, at this conference, there was little discussion of the moral responsibility that I think researchers and practitioner bear to ensure that these techniques are used with respect, empathy and transparency.
What do you think?
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