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BSCI 101: USING BEHAVIOURAL SCIENCE TO DO GOOD! Think Think, Nudge Nudge: A Communicator’s Guide to Behavioural Insights May 22, 2015

Workshop: Behavioral Economics 101

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  1. 1. BSCI 101: USING BEHAVIOURAL SCIENCE TO DO GOOD! Think Think, Nudge Nudge: A Communicators Guide to Behavioural Insights May 22, 2015
  2. 2. TODAYS AGENDA I. Behavioural Science 101 II. Case Studies: Applying Behavioural Science to Government Communications III. Behavioural Audit: Key Principles in Communications 22015 ideas42
  3. 3. TODAYS AGENDA I. Behavioural Science 101 II. Case Studies: Applying Behavioural Science to Government Communications III. Behavioural Audit: Key Principles in Communications 32015 ideas42
  4. 4. FIRST, A FEW QUESTIONS 42015 ideas42
  5. 5. A cup and a saucer cost $1.10 in total. The cup costs a dollar more than the saucer. How much does the saucer cost? _______ cents 52015 ideas42
  6. 6. If it takes 5 machines 5 minutes to make 5 widgets, how long will it take 100 machines to make 100 widgets? _______ minutes 62015 ideas42
  7. 7. In a pond, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire pond, how long would it take for the patch to cover half the pond? _______ days 72015 ideas42
  8. 8. NEXT, A LITTLE PUZZLE 82015 ideas42
  9. 9. 2015 ideas425/25/2015 9 REPRESENTATIONS LEAD TO SOLUTIONS 9
  10. 10. HOW WE REPRESENT PEOPLE MATTERS 102015 ideas42 odd choice.
  11. 11. ARE YOU SMARTER THAN A FIFTH GRADER? 112015 ideas42 A cup and a saucer cost $1.10 in total. The cup costs a dollar more than the saucer. How much does the saucer cost? If it takes 5 machines 5 minutes to make 5 widgets, how long will it take 100 machines to make 100 widgets? In Lake Michigan, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half the lake? 5 5 min. 47 days 10 100 min. 24 days
  12. 12. THE STANDARD MODEL 122015 ideas42 Decision Action Outcome Benefits > Cost? A B YES! NO!
  13. 13. THE BEHAVIOURAL MODEL 132015 ideas42 Decision Action Outcome A B YES! NO! YES! NO! ??? YES! NO! ??? Failed to choose, didnt consider at all Process changes decision
  14. 14. CONTEXT MATTERS 142015 ideas42 10% Off - Sale Limit 12 Per Customer No Limit 7 cans per customer 3.5 cans per customer
  15. 15. BEHAVIOURAL SCIENCE REVEALS MANY OF THE INFLUENCES ON OUR DECISION-MAKING 152015 ideas42 Limited cognitive resources Complex context Time inconsistency Subjective construal Limited attention Automatic habits (Flawed) rules of thumb Tendency to focus on whats in front of us Self-control over temptations Forgetting Discounting the future Over-optimistic planning Identity Mood and attitude Self-enhancement Tendency to give self but not others benefit of the doubt Social norms Reference points Framing as losses or gains Presentation of alternatives
  16. 16. We use the theories of behavioural science to design solutions to some of the worlds most persistent social problems. 162015 ideas42
  17. 17. WE COMBINE THE KNOWLEDGE AND INSIGHTS OF LEADING ACADEMICS Manuel Adelino, Duke Fuqua Kate Baicker, Harvard School of Public Health Richard Thaler, Univ. of Chicago Booth Michael Barr, Univ. of Michigan Law School Todd Rogers, Harvard Kennedy School Betsy Levy Paluck, Princeton University Anuj Shah, Univ. of Chicago Booth Eldar Shafir, Princeton University (co-founder) Sendhil Mullainathan, Harvard University (co- founder) Antoinette Schoar, MIT Sloan (co-founder) 17
  18. 18. WITH LEADERS, EXPERIENCED IN GETTING THINGS DONE 182015 ideas42 Piyush Tantia is an ideas42 Executive Director. Before joining ideas42, Piyush was a Partner in Oliver Wymans financial services practice. Saugato Datta is a Managing Director at ideas42. He works to test and scale programs and products that use behavioral economics to benefit poor people around the world. Josh Wright is an Executive Director at ideas42, with a focus on financial services, economic mobility, healthcare, and strategy for the firm. Marina Dimova is a Vice President at ideas42, where she works on behavioral innovations in consumer finance and international development. Will Tucker is a Vice President at ideas42, where he works on household finance, consumer protection, and anti-poverty projects. Alissa Fishbane is a Managing Director at ideas42, where she works in the areas of global health, education, financial inclusion and criminal justice.
  19. 19. IDEAS42 BEHAVIOURAL DESIGN METHODOLOGY 192015 ideas42
  20. 20. IDEAS42 DESIGNS LOW-COST HIGH IMPACT INTERVENTIONS Recent Examples: A behaviourally informed HIV risk game doubled young girls correct identification of potentially risky partners in South Africa A goal and commitment based savings intervention in the Philippines increased savings rates by 21% A social norm intervention in Costa Rica reduced water consumption amongst treatment households by 5.5% A technology planning tool reduced the incidence of violence experienced by almost 50% amongst youth in South Africa A behaviourally informed raffle brought attention to rent due dates, doubling the rate of on time payment in a US housing development 202015 ideas42
  21. 21. LIMITED ATTENTION and HASSLE FACTORS 212015 ideas42
  22. 22. 222015 ideas42 Simons, D. J [Daniel Simons]. (2010, April 28). The Monkey Business Illusion. Retrieved from https://www.youtube.com/watch?v=IGQmdoK_ZfY
  23. 23. LIMITED ATTENTION The cognitive process of concentrating on one aspect of the environment while ignoring or unintentionally missing other aspects 232015 ideas42
  24. 24. WE DONT ATTEND TO THINGS THAT MATTER 242015 ideas42
  25. 25. WE PAY ATTENTION TO WHATS MOST SALIENT (BUT MAYBE NOT IMPORTANT) 252015 ideas42 Drew, Trafton. Vo, Melissa L.-H. Wolfe, Jeremy M. (2013) The Invisible Gorilla Strikes Again: Sustained Inattentional Blindness in Expert Observers. Association for Psychological Science , dol:10.
  26. 26. WE MAY NOT ATTEND TO THINGS IN TIME 262015 ideas42
  27. 27. WE MAY NOT BE ATTENTIVE IN THE ABSENCE OF FEEDBACK 272015 ideas42 Wansink, B., Painter, J. E., & North, J. (2005). Bottomless Bowls: Why visual cues of portion size may influence intake. Obesity Research, 13, 93-100
  28. 28. WERE ALL SUSCEPTIBLE, AND POLICYMAKERS HAVE CAUGHT ON New FDA nutrition labels Schumer Boxes for Credit Card Offers Bill-Shock Legislation Overdraft Fee Legislation 282015 ideas42
  29. 29. LIMITED ATTENTION: TAKEAWAYS Attention is a scarce resource. Were all susceptible to it. We could fail to notice even when it matters a lot. 292015 ideas42
  30. 30. HASSLE FACTORS Small barriers that inhibit following through on an intended action. 302015 ideas42
  31. 31. SMALL HASSLES CAN MEAN BIG COSTS TO CONSUMERS 312015 ideas42
  32. 32. COMPLEXITY IS A PROBLEM 322015 ideas42
  33. 33. MAKE IT EASY 332015 ideas42 40% 27% 56% 35% 0% 10% 20% 30% 40% 50% 60% Submit FAFSA Enrolled into College Control Pre-fill form Bettinger, Eric. et. al (2009) The Role of Simplification and Information in College Decisions: Results from the H&R Block FAFSA Experiment. (NBER Working Paper). FAFSA Forms and College Enrollment
  34. 34. DECIDING BETWEEN OPTIONS IS COMPLICATED 342015 ideas42 Enrolling in a 401(k): What funds should I select? What contribution rate should I set? Should I enroll?
  35. 35. HASSLES INHIBIT PARTICIPATION 352015 ideas42 Within five months: 45% versus 71%
  36. 36. HASSLE FACTORS: TAKEAWAYS Small hassles can have a big impact. Processes with too many or different kinds of steps. Perceived hassles are just as powerful. 362015 ideas42
  37. 37. EXCELLENT AIRMEN COMMIT NO ERRORS 372015 ideas42
  38. 38. Alissa Fishbane, Managing Director [email protected] 392015 ideas42