Posts Tagged ‘behaviouralEconomics’

Behavioral insights

November 3, 2017

EAST framework

  • E-asy
    • Harness the power of defaults. – We have a strong tendency to go with the
      default or pre-set option, since it is easy to do so. Making an option the
      default makes it more likely to be adopted.
    • Reduce the ‘hassle factor’ of taking up a service.- The effort required to
      perform an action often puts people off. Reducing the effort required can
      increase uptake or response rates.
    • Simplify messages – Making the message clear often results in a significant

      increase in response rates to communications. In particular, it’s useful to
      identify how a complex goal can be broken down into simpler, easier actions.
  • A-ttractive
    • Attract attention. – We are more likely to do something that our attention
      is drawn towards. Ways of doing this include the use of images, colour or
      personalisation.
    • Design rewards and sanctions for maximum effect. – Financial incentives are
      often highly effective, but alternative incentive designs — such as lotteries —
      also work well and often cost less
  • S-ocial
    • Show that most people perform the desired behaviour. – Describing what most people do in a particular situation encourages others to do the
      same. Similarly, policy makers should be wary of inadvertently reinforcing
      a problematic behaviour by emphasising its high prevalence.
    • Use the power of networks. – We are embedded in a network of social
      relationships, and those we come into contact with shape our actions.
      Governments can foster networks to enable collective action, provide
      mutual support, and encourage behaviours to spread peer-to-peer.
    • Encourage people to make a commitment to others. – We often use
      commitment devices to voluntarily ‘lock ourselves’ into doing something
      in advance. The social nature of these commitments is often crucial.
  • T-imely
    • Prompt people when they are likely to be most receptive. – The same offer made at different times can have drastically different levels of success.
      Behaviour is generally easier to change when habits are already disrupted,
      such as around major life events.
    • Consider the immediate costs and benefits. – We are more influenced by costs
      and benefits that take effect immediately than those delivered later. Policy
      makers should consider whether the immediate costs or benefits can be
      adjusted (even slightly), given that they are so influential.
    • Help people plan their response to events. – There is a substantial gap between intentions and actual behaviour. A proven solution is to prompt people to identify the barriers to action, and develop a specific plan to address them.
The EAST framework is at the heart of this methodology, but it cannot be applied in isolation from a good understanding of the nature and context of the problem. Therefore, we have developed a fuller method for developing projects, which has four main stages:
  1. Define the outcome – Identify exactly what behaviour is to be influenced. Consider how this can be measured reliably and efficiently. Establish how large a change would make the project worthwhile, and over what time period.
  2. Understand the context – Visit the situations and people involved in the behaviour, and understand the context from their perspective. Use this opportunity to develop new insights and design a sensitive and feasible intervention.
  3. Build your intervention – Use the EAST framework to generate your behavioural insights. This is likely to be an iterative process that returns to the two steps above.
  4. Test, learn, adapt – Put your intervention into practice so its effects can be reliably measured. Wherever possible, BIT attempts to use randomised controlled trials to evaluate its interventions. These introduce a control group so you can understand what would have happened if you had done nothing.

 

Smart

S-pecific

M-easurable

A-ssignable

R-ealistic

T-ime-based

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Nash equilibrium

June 1, 2017

In a Nash equilibrium, every person in a group makes the best decision for himself, based on what he thinks the others will do. And this inevitably ends up being a bad decision for the collective.

A. Madhavan: Why we need a dating app that understands Nash’s equilibrium

What Causes Behavior Change?

September 19, 2016

The Fogg Behavior Model shows that three elements must converge at the same moment for a behavior to occur: Motivation, Ability, and Trigger. When a behavior does not occur, at least one of those three elements is missing.

Behaviour change elements: motiviation, ability, trigger

Core Motivators: pleasure/pain; hope/fear; social acceptance/rejection

Simplicity factors: time; money; physical effort; brain cycles; social deviance; non-routine

Triggers: facilitator; spark; signal

BJ Fogg’s Behavioral Model

Behavioural economics

January 21, 2014

Behavioural economics teaches us that human behaviour is often automatic and unthinking, and is shaped far more heavily by momentary contextual factors than we realise. These contexts can be both internal and external. They include our automatic habitual responses, the heuristics or rules of thumb that we follow every day, and the constraints of the physical environment.

(…)

In this way, the ‘unconscious’ factors that often trigger behaviour are not a pool of deep desires and feelings such as that conceived of by Freud, but an active, adaptive management system, focused on navigating life and responding to the physical environment as efficiently and effectively as possible. One frequently observed outcome is that people do not usually seek out ideal solutions; instead they ‘satisfice’, adopting choices that are ‘good enough’ but avoid them expending angst and energy seeking something better.

(…)

‘Fridge fit’ is a well-known example of a satisficing heuristic that leads shoppers to make unexpected choices in categories like salad dressing. They choose their dressing not based on how well it fits with their beliefs about food and nutrition, but on how well
it fits into their fridge

(…)

This approach aligns with the human brain’s inherent striving for meaning, interpreting, categorising and generally making sense of our actions for future reference.

TNS: The value of context