Wednesday, 17 February 2016
Economics was memorably described as ‘the dismal science’ by the Scottish writer and philosopher Thomas Carlyle in the early 19th Century. So it’s fitting that, in the early 21st Century there could be lessons on how to be happy from behavioural economics and the behavioural sciences.
Happiness by Design was written by fellow Brightonian (not that we know each other) and Professor of Behavioural Science at the London School of Economics Paul Dolan. The book is interesting for two main reasons: first, like other books on happiness, it covers a lot of useful research, including Dolan’s own contribution to the work on happiness – he was heavily involved with specifying the measures on happiness which are now included in the work of the Office for National Statistics.
But Dolan focuses on the personal, showing how to implement findings from the research. The second half of the book includes practical tips to help us be happy. Not by thinking about it, and not by devoting ourselves to 24x7 hedonism (which would be pretty exhausting). Rather, by using insights and techniques from the behavioural sciences. And concentrating on finding the right balance between pleasure and purpose. At the risk of stating the obvious, the book recommends that we spend more time on the things that make us happy, and less time on the things that make us unhappy – happiness comes from what you do, and what you don’t do. Which might even mean chucking in your job if it’s causing unhappiness - although it might be easier to quit the old job than find a new one which will make you happier. Which probably brings us back to traditional economics. As Thomas Carlyle might agree.
Thursday, 26 November 2015
Rethinking Economics is an international network of rethinkers working together to “demystify, diversify and invigorate economics.” It was great to be asked to write a chapter on Behavioural Economics for their forthcoming reader, “An Introduction to pluralist economics,” to be published this year by Routledge. It’s equally delightful that the draft has now been set to the editor! Each chapter of the book will contain a brief introduction to a different field of economic thinking, written by an academic in the subject, plus a case study co-written by a student. More details here.
Wednesday, 21 October 2015
Wednesday, 30 September 2015
The Behavioural Insights Team has now posted the videos from the plenary sessions, individual streams and workshops from the London Behavioural Insights Conference BX2015. So, no excuse for not catching up with all the latest material from behavioural economics and behavioural insights as applied to behaviour change interventions and policy. Click here.
If you don’t have time to watch all the videos, following, as a public service (we were there, in real time), is our pick of the quotes from the sessions which we attended.
Reasons to be humble
“When we observe behaviour that we don’t understand, it can be because people actually know things that we don’t.”
“The poor are largely unseen.”
Women Are Missing…and here’s what to do about it
“Between 100 million and 160 million girls and women are ‘missing’ because of sex-selective abortion, mistreatment and abuse.”
“Seeing is believing. If we don’t see women as CEOs or men as kindergarten teachers, we don’t believe it’s possible.”
“When it comes to tackling gender inequality, rather than change people’s minds, we should change the environment in which people live and work.”
“We have known for over 60 years that a selection interview is a poor predictor of future performance. And panel interviews are even worse because of groupthink.”
“Don’t establish a prescriptive norm by how you describe things, such as the lack of women in certain fields.”
The Curse of Knowledge strikes again
“Writing is an act of pretence and craftsmanship.”
“The curse of knowledge is the biggest barrier to clear writing.”
How reciprocity can beat the market
“There are six universal principles of social influence: reciprocation, liking, scarcity, social proof, authority, commitment.”
“If a change is small, it’s more likely to be implemented by the people who you are asking to do it.” (although it could bring major results)
“Reciprocity is about more than the traditional economic tit-for-tat model based on exchange. And it’s better if you go first, because people will want to give in return.”
“You should always think about what you can give that helps meet the needs of your audience.”
“Ernest Hemingway’s bet-winning short story, told in six words: ‘For Sale: baby shoes. Never used.’ “
“Start with a broad smile.”
Multi-tasker? Yeah, Right.
“Multi-tasking is a myth. We can’t do more than one thing at a time.”
Insights and Advice from Daniel Kahneman
Advice to those trying to influence policy makers: “What is preventing people doing the things that you want them to do? When you implement the policy who will be the losers and what will they do to you?
Advice to students: “Be less about (the) literature and more about life.”
Advice to everyone: “Don’t study anything that isn’t interesting or fun. Don’t worry so much. And know when to give up.”
Answering a question from Steven Pinker on whether de-biasing should be part of the curriculum:
“It should be possible to give people the chance to slow down and reflect on what they are doing. But people can’t be reflective all the time. For decision making, structure is a good thing. But this isn’t the same as de-biasing.”
“A lot of decision making in firms and in government is of very poor quality. It has evolved, it has not been designed.”
The Power of Search and the trouble with economics
“If people are interested in economics, you can be pretty sure that the economy is in trouble.”
From Google search results, “The strongest correlations with “Hardest Place to live in America” are disability, diabetic, blood pressure, antichrist and the rapture.”
The thin line between honesty and dishonesty
“People normally only take a maximum of four free candies from a malfunctioning (experimentally fixed) vending machine, because five would be stealing.”
“People invite their friends to join in because of reverse social proof – if they do it, it makes it ok that you’ve done it.”
“Corruption is not about knowing that something is wrong – it’s about putting it into a place where you don’t care about it.” (e.g, not in the box marked ‘family’).
“Once you are in a corrupt environment, where the work takes place under different rules, behaviour changes very quickly.”
“The incidence of corruption and cheating is pretty similar across the world. But culture changes the domains in which corruption happens.”
“We think of ourselves in binary terms – we are either good or bad.”
“The logic of confession from the standpoint of an economist: if we can get absolution, why not cheat more. Even on the way to the church.”
“The standard models for understanding corruption are based on cost benefit analysis: the consequences of actions. But it’s actually more to do with rationalisation in the moment.”
“Whistleblowers are more likely to be women, because they aren’t part of ‘the boy’s club’ and aren’t betraying the group.”
“Drunk driving kills people, so we legislate to prevent it. But there are many other ways of killing people that we tolerate. Why?”
Markets are looking out for the naïve consumer – it could be you (some of the time)
“Consumers can be naïve or sophisticated, but not all the time. Even sophisticated consumers make mistakes, and markets are good at finding the instance when that mistake is made.”
Firms are not black boxes
“Because firms are run by humans, they may not always profit-maxmimise.”
“Regulatory remedies rely on people acting in certain ways. If these don’t happen, bad outcomes follow.”
“Behavioural economics can be incorporated into the market.”
Why mindless eating can be a good thing
“It’s easier to change your eating environment than to change your mind.”
“We don’t know what we like, and we don’t know why we do what we do. Both of which are opportunities to change behaviour.”
“In the US, it’s possible to predict a person’s weight based on about nine observable variables in their kitchen. If a cereal box is visible, they are likely to be 20lb heavier than their neighbours.”
Last but not least – a few concluding gems
“When it comes to food, the less you pay, the more you get.”
“If you have to go out of your way to think about healthy eating, you won’t do it.”
“The average British male is eating 200 calories a day more than he needs.”
“It’s important to learn from failure. It’s not just about saying ‘When it works, it’s all down to me and my colleagues. When it doesn’t work, we blame other factors.” You should not be afraid to create a situation in which interventions might fail – you could even give 3 “fails” a year to put in the bank”
“The ancient Greeks were familiar with ‘weakness of the will.’ People do not always do what’s best for themselves.”
Saturday, 5 September 2015
Nudging in The Smoke: Notes, Quotes and Thoughts on the London Behavioural Insights Conference BX2015
For two days this week Behavioural Exchange, the International Behavioural Insights Conference made London the global epicentre of behavioural economics as applied to policy and practice. Or, if you prefer, behavioural science. Or behavioural insight. Or, as Daniel Kahneman memorably (and acerbically put it) when video-linked for a transatlantic interview with Richard Thaler, “applied social psychology.”
Behaviour Workshops followed the footsteps and soaked up two days of great talks and discussion sessions from some of the greatest names in behavioural economics (and applied social psychology!), with keynote sessions from Thaler and a virtual Kahneman (video linked from New York), as well as Robert Cialdini, Steven Pinker, Dan Ariely, Max Bazerman and Eldar Shafir. Plus a range of parallel sessions featuring experts from fields such as digital behaviours, savings, education, crime, work, obesity, climate change and international development.
It’s impossible to summarise two such stimulating days - there's a lot of mental processing still going on. In fact, there were so many great quotes that we will be drip-feeding these into the blog over the next few postings.
As a taster, following are a few of the great quotes from Richard Thaler’s conference appearance, starting with his “Two Nudge Mantras”, notably:
1 If you want to nudge people to do something, make it easy.
2 We can’t do evidence-based policy without evidence.”
Another, memorable quote, which he always puts in his book signings,
“Nudge for good.”
And here are a few more,
“It’s good to have policy where, 'if you do nothing, good things happen.'”
“If you get great results, always replicate. If it looks too good to be true, it probably is.”
“So far, nudge units have used a small amount of psychology and virtually no economics.”
“People question the ethics when nudges are used in the public sector, but not when they are used in the private sector...firms and government should operate to the same standards of behaviour.”
“We didn’t invent nudging, it has been around forever. Private companies do it. And we can’t control what people do with it.”
Plenty to engage System 2 and reflect upon there. Speaking of which, here are some initial reflections on the conference.
Most Shocking Admission
A brilliant session on Revealing Preferences, with Dan Ariely on trust and Google’s Chief Economist Hal Varian on the rich data from search, was introduced by the Head of the UK Government Economic Service, Sir Dave Ramsden. After noting how behavioural economics was being incorporated into government economic policy making, he admitted that, in his personal life, he had been using the same bank for the last thirty plus years, ditto his car insurance, until last year. If the government’s chief economist is such a victim of intertia bias and reluctance to switch, it doesn’t portend well for the much-vaunted power of competition and consumer choice to drive market outcomes (a concept dear to HM Treasury)..
Most Terrifying Conference Workshop (Ever!)
One of the parallel sessions, ‘You Are The Doctor’ investigated the how and why of medical errors – crucial, because these occur in around 10% of UK acute hospital admissions, of which up to 75% are caused by cognitive errors and behavioural biases. Workshop delegates played the role of doctor in an emergency room at the end of a long shift. Using video with actors in key roles, and with a prompt card to remind us of the cognitive and behavioural biases that lurk below our decision making, we had to make quick judgements with life-or-death consequences for the patient. Responses were collected (thankfully, anonymously) and aggregated, using electronic keypads. It’s a fair bet that pulse rates, anxiety and blood pressure levels in the conference room were a lot higher by the end of the workshop. Spoiler alert: we killed the patient. Cognitive biases can kill!
The Corridors of Power
BIT CEO David Halpern noted that behavioural economics and the impact of the Behavioural Insight Team had gone “from the seminar table to the Cabinet table.” This was attested by the presence of the head of the UK Civil Service, Cabinet Secretary Sir Jeremy Heywood, and Matthew Hancock MP, Cabinet Office Minister, Paymaster General (and co-author with Nadhim Zahwai MP of a book on the economic crash, ‘Masters of Nothing,’ which looks at the human behaviour that caused the crash).
Lost In Translation: There Is No French word for Nudge
Look up Nudge in the Collins online dictionary, and here’s what you get: 1. donner un (petit) coup de coude à - to nudge each other se donner des coups de coude. Noun : 1 (= push) coup m de coude - to give sb a nudge donner un (petit) coup de coude à qn. 2 (= gentle persuasion) coup m de pouce - to give sb a nudge in the right direction pousser doucement qn dans la bonne direction. Or when, I asked a French delegate, I learned that the nearest is apparently “incitation.” Despite this, the French government does have a nudge unit. Only it's known as the Mission pour “Methodes d’ecoute et d’innovation.” No doubt that helps to keep the Academie Francaise on side.
My, How You’ve Grown
There were 800-900 of us in the Westminster Plaza for the Behavioural Exchange 2015, from around 20 countries. According to BIT CEO David Halpern, this is more than double the number of attendees at last year’s gathering in Sydney. It would have been hard to imagine this even five years ago, when mention of the words “behavioural economics” would normally generate a blank look.
Most Brilliant Conference Organisation
The BBC’s Home Editor, Mark Easton, who hosted Day 2, commented that it had been the best-organised conference he had ever attended. From a delegate’s perspective, that was also true.
From the gent’s toilets at the event. (Now there’s a tricky photo assignment).
Find Out More
Everything will be posted online next week on storify
And Finally, A Behaviour Workshops Nudge
To find out more about our workshops, based on behavioural economics, behavioural science, behavioural insight, applied social psychology and/or social marketing, please drop us an email: email@example.com. We offer workshops that can be tailored to meet the needs of most organisations. Follow us on Twitter @BehaviourW
Wednesday, 17 June 2015
One of us Behaviour Workshoppers just renewed our UK passport. The process was smooth and efficient (if expensive). So far, so impressive. The new passport arrived promptly, and included in the envelope was a leaflet entitled "Your new passport: important information." The leaflet includes the following comment "UK passports are valuable documents and criminals attempt to use them to commit crimes which may affect you personally, such as identity theft." Fair enough. We all know that it’s important to safeguard your passport, which is highly sought after by those with nefarious intentions.
So why is it that the passport arrives via the post, in an envelope emblazoned with "Her Majesty's Passport Office" and "This Is Not A Circular - Important Documents enclosed." In case there is any doubt as to what the envelope contains, it’s easy to do the Christmas present test, feel the contents and confirm, yes, it’s a passport.
If you live in a single dwelling with a private letter box this may not be a security risk (assuming it gets through the postal system), but for people whose post goes to a communal area, it could be a real problem. Given that credit cards and other valuable documents are now sent out in more anonymous packages, why not passports? It’s time to stop this Nudge in the wrong direction. After all, unlike you and me, not everyone out there is an honest and upstanding citizen….and Nudging is all about helping people to do the right thing. Not the wrong thing.
Wednesday, 10 June 2015
At the end of January 1981, the late John Lennon dominated the UK pop music charts with the sadly posthumous Imagine at no. 1 and Woman at no. 2. Adam Ant and Blondie were at no. 4 and no. 5 and we’ll draw a veil over Phil Collins at no. 3. Around the same date, Daniel Kahnemann and Amos Tversky published a paper in Science, The Framing of Decisions and the Psychology of Choice.
The paper, now celebrated, demonstrated that people are sensitive to the framing of a decision problem, so that small differences in the presentation of data can have a substantial effect on their decisions. For example, consumers are influenced in their decisions by how choices and options are presented to them. In terms of behavioural economics, it’s clear that framing the same choice in terms of losses instead of gains can alter the decision.
Recently, one of us Behaviour Workshoppers was approached with an interesting proposition, namely to record an interview about economics, behavioural economics, behaviour change, nudging and living carfree. So far so good. But rather than “would you like to record an interview on these subjects”, what really captured the attention was the framing – the invitation was to appear as a guest on the Economic Rockstar podcast. Same content, same issues, but what a frame! Impossible to turn it down.
So hats off to Frank Conway, the man behind the Economic Rockstar podcast, for a brilliant piece of re-framing: how could anyone with a pulse refuse the invitation? Is it economics? Is it rock and roll? Listen up and decide for yourself – here’s the podcast. Or download the MP3. Meantime, Kahneman (still going) Tversky (sadly, no more), and rock and roll, (staggering on) we salute you!
Amos Tversky and Daniel Kahneman, The Framing of Decisions and the Psychology of Choice. Science,New Series, Vol. 211, No. 4481. (Jan. 30, 1981), pp. 453-458.