“NUDGE” 1 “CONNECTED” 2.?DISCUSS!

Notts Chief Executives Dec 2010.

BOOKS

• “Nudge: Improving decisions about health, wealth and happiness” Richard Thaler and Cass Sunstein (2008) Yale University Press

• “Connected: The amazing power of social networks and how they shape our lives” Nicholas Christakis and James Fowler (2010 Harper Press

TWO DIFFERENT PROPOSITIONS

• NUDGE: nudge people in directions that will make their lives better through “libertarian paternalism”: (mostly an individualistic approach)

• CONNECTED: the connections between individuals, the nature and shape of those ties affect the choices, attitudes and outlooks of individuals: (a social network approach.)

NUDGE:BEHAVIOUAL ECONOMICS

• Unrealistic optimism is a feature of human life

• Loss aversion: people mind more about losing something than if they never had it

• Status quo bias: default options are powerful nudges

• Expect error

NUDGE

Choice architecture Rules of thumb:1. Anchoring: anchors serve as nudges2. Availability: assess the likelihood of

risks by how readily examples come to mind

3. Representativeness ; people do not have accurate perceptions of what random sequences look like ( clusters)

How to influence individual decisions

• Incentives: lower pricing structures/rewards• Framing: frames are powerful nudges• Spotlight effect: people think others are looking at them

more than they are (odd one out)• Priming: asking people in advance ( voting)• Defaults: pad the path of least resistance( organ

donation, continuous subscriptions)• Give feedback: ( energy monitor)• Structure complex choices• Collaborative filtering; (eg Amazon)• Social influences: and peer pressure

Use of nudge in central government policy

• Freezing Council tax incentive money

• New homes bonus incentive

• Pensions Act 2008: automatic enrolment of over 22s into workplace pension default

• Can citizens be “nudged” into becoming good citizens – to be part of the “Big society”

CONNECTED: Important concepts• Emergent properties: new attributes of a

whole that emerge from the interaction and interconnection of the parts: the taste of cake transcends the sum of its ingredients.

• 6 degrees of separation: sending a letter from Nebraska to Boston

• Three degrees of influence• Dunbar’s number ( 150)

Rules of life in the network1. We shape our network: homophily - we associate with

people who resemble us. We also choose the structure of our network in 3 important ways

We decide how many people we are connected to We influence how deeply interconnected our friends

and family are We control how central we are to the social network

2. Our network shapes us3. Our friends affect us4. Our friends friends friends affect us5. The network has a life of its own

Evolution and genetics

• Homo economicus ( self interested man) gives way to homo dictyous ( network man)

Question: does this mean self interested citizens are becoming more amenable to becoming part of the “Big society” as they evolve into more networked individuals?

• Genetics: some traits that spread in social networks also appear to be heritable ( obesity, smoking, happiness, political behaviour) Happiness: long term happiness depends 50% on a person’s genetic set point, 10% on circumstances and 40% on what people choose to think and do. Happiness spreads 3 degrees just like loneliness

Examples of networks in operation

• Mortality of widowers

• Politics: Obama; www.my.barackobama.com 1.5m accounts

APPLICATION• Obesity; your friend’s friend’s friends can make you fat.

If a mutual friend becomes obese it nearly triples a persons risk of becoming obese. Obesity is not a unicentric epidemic but a multi centric one. Obesity can spread but not from one spot, and social contacts are not the only stimulus for weight gain. Imitation is not the only way obesity can spread. “In real life we measure ourselves against our friends. Inch for inch”

• Safe sex: campaigns should be targeted at high activity members at the core/hub of their network

• Immunisation; targeting 30% of those central to the network is as effective as immunising 99% of the population randomly.

• Smoking; what flows through a network is a norm about whether smoking is acceptable which results in a co-ordinated belief by people who are not directly connected

APPLICATION• Back pain: a culture bound phenomenon?• Suicide contagion; banking contagion??. We can

“catch” emotional states by a) facilitating interpersonnal bonds (b) synchronizing behaviour and c) communicating information

• Crime: a persistent mystery about crime is its variation across time and space. Much evidence suggests it is partially due to the reverberation of social interactions. As criminals act in a given time and place it increases the likelihood that others will commit crimes in collaboration with someone else. Nearly two thirds of criminals commit crime in collaboration with someone else.

“We might be better off helping interconnected groups of people avoid criminal behaviour rather than preventing/punishing crimes one at a time”

Some overlapping concepts

• You can change groups and communities by influencing one person at a time until a “critical mass” is generated

• The influencing methods of “nudge” can be deployed to impact networks and groups

• Individuals who are the subject of “nudging” are affected by “peers”, culture and environment

Some problems and uncertainties

• “operationalising” social network theory appears quite complicated and requires a degree of community insight that we don’t yet have.

• No one knows if the impacts of “nudges” can be sustained over long term

• There is an argument that change is driven by a mix of both broad social argument and small policy steps: eg smoking: regulation combined with better information, advertising, prohibition of smoking advertisement, changing social norms

• Perhaps both “nudge” and “connected” can form useful checklists to inform really good policy intervention design.

New social trends

• Enormity: a vast increase in networks and numbers who might be reached to join them

• Communality: broadening of the scale by which we can share information and collective efforts

• Specificity: increase in the particularity of ties we can form

• Virtuality: ability to assume virtual identities.• The internet is making interactions rushed; it opens us

up to a loss of privacy. People will replace close friendships within their communities with the weak connection to distant friends. The nature of the interaction is strongly influenced by the medium ( brief bursts of conversation)

Properties of networks

• Social networks have a memory of their structure and their function

• Networks become self replicating – they outlast their members

• Large social networks require turnover to survive ( like cell renewal)

NUDGE CONNECTED

Looks to influence individual behaviour

Looks to influence wider group behaviour

Seeks to actively encourage individual good choices and behaviours

Observes and explains the behaviour and outlooks of groups

Might be seen as manipulative

More of a tool for understanding group dynamics

Has policy applications which are being implemented in government

Policy applications complex , difficult to identify, and unique to areas.

Bespoke, stand alone Linked to social media, open data, internet