Lecture 1) Introduction, 26/08/2019
WHY CHANGE PEOPLE’S BEHAVIOUR?
- Self-improvement
- Monetary reasons: work more efficiently
- Making better choices, more productive work
HOW TO CHANGE PEOPLE’S BEHAVIOUR?
- Education: providing information, change behaviour in line with what you learn
- Financial incentives: pay people for doing the right thing
- Legal/ prescriptive measures: keep people from cheating by making a law prohibiting it
DUAL PROCESS THEORY:
System 1 (unconscious, automatic, rapid, parallel, contextualised, heuristics, biases), system 2 (conscious, controlled, rational.
serial, deliberative)
- Bias: systematic deviations from rational decision making
- Heuristic: not using all information provided, mental shortcut, goal of making decisions more quickly/ accurately than
when using complex methods
- It was common to focus on system 2 when influencing behaviour but: telling people what to do doesn’t always work =
develop nudges!
NUDGING & CHOICE ARCHITECTURE:
Focus on system 1, any small feature in environment that influences our choices.
- Tversky & Shafir: disjunction effect: people are irrational: changing the decisional context/ adding uncertainty can
influence people’s decision. Decisions aren’t always rational. Context-dependent!
o Use deviations from rationality to change behaviour
§ Social norms
§ Gains vs. losses
§ Likeability
§ Reciprocity
§ Anchoring
§ Status quo bias
§ Framing
§ Priming
- Choice architecture: arrangement of e.g. food influences the choices we
take, reshape choice environment so that automatic choices align with
optimal/ preferred behaviour. Use all types of psychological phenomena
to shape decisional context.
o Difference nudging & architecture: arch.: reshape choice environment. Nudge: shaping it into the direction of
the optimal option.
- Oliver: Features of nudges:
o Rely on system 1) of dual process theory
o Do not have to choose nudged option: freedom! = libertarian paternalism: belief in protecting an individual’s
rights & freedoms. Paternalism: infringement in the personal freedom of an individual with a beneficent/
protective intent. It is paternalistic because it motivates behaviour change that aligns with target population’s
deliberative preferences.
= free will preserving infringement with a beneficent intent.
o No changes to economic incentives
o Informed by behavioural economics
o Beneficial/ optimised decision for decision maker (internalities)
- Classical nudge: cares about internality: you take decision that is good for you but doesn’t care about university.
o Behavioural, liberty, internality.
WHY A NOBEL PRIZE?
- Easy & cheap to implement: huge difference for governments
- Public policy interventions
- Rebranding behavioural economics
- Bridging the gap between academia & the real world
- Nudge unit: Mindspace report, behavioural insights team
, Lecture 2) Behavioural change in public policy, 26/08/2019
- Behavioural insights team: improve government & promote positive behavioural change; how do people take decisions
in daily life? = behavioural government (Nudge units)
o BUT: behavioural insights make money! Small companies sell studies to the government
ETHICS OF BEHAVIOURAL CHANGE INTERVENTIONS
- Libertarian paternalism: free-will preserving intervention with a positive intent. But: Do we have the right to make
people do what is best for them?
o Sunstein: totally ethical because of the idea of libertarian; no force.
o Choice architects take decisions: a lot of different ways; has to be arranged anyway, so why don’t they choose
the option that is best for the consumer?
o White (2013): against the use of paternalistic nudges by the government but enhance individual choice &
autonomy.
o Do people really have the freedom not to choose the nudged option?
- Sludge: when a nudge is not used to benefit the decisionmaker, e.g. travel insurance
- “Who determines what is good?” policy makers, government, companies or individuals?
o What is an optimal/ good choice?
§ Science: based on empirical evidence
§ Society: reduce harm to others
§ Environment: respect for nature & resources
§ Beliefs & ideology: value-based
§ Preferences:
• Classical economics: Mill: choices reveal value & are stable.
• Psychology: hedonic experiences & context aren’t stable. E.g. skin problems & tanning,
underweight & calorie intake.
UNDERSTANDING HOW NUDGES ARE USED IN POLICY
- Use knowledge about the 2 systems & how they interact with our
surroundings
- Are used to make our automatic system choose differently.
- Are used to activate our reflective system at the right time
- Transparent, non-transparent nudges. Are non-transparent nudges free-will
preserving?
VACCINATION
- Convince people to vaccinate in order to decrease the spread of diseases, e.g. measles. Only 75% of world
population are vaccinated while 95% are necessary!
- Possible solutions:
o Law
o Incentives: financial, social
o Nudge
- Chapman (2016): vaccination on default: Vaccination appointment defaults alter what constitutes the course of least
resistance, facilitating vaccination behaviour without necessarily changing people’s attitudes/ perceived norms about
vaccination.
o Opt-in version, no letter, opt-out version.
o Vaccination rates are highest in the opt-out version. No difference between no letter/ opt-in version, but more
people who didn’t receive a letter get their vaccination at the doctor’s office than at the flu clinic.
o scheduling patients by default for a flu shot appointment leads to higher vaccination rates at a medical practice
than does merely encouraging flu shot appointments
o Letter = nudge?
- Taylor et al.: Framing of vaccine effectiveness:
Statement A and F are most convincing because
they include certainty (100%).
WHY CHANGE PEOPLE’S BEHAVIOUR?
- Self-improvement
- Monetary reasons: work more efficiently
- Making better choices, more productive work
HOW TO CHANGE PEOPLE’S BEHAVIOUR?
- Education: providing information, change behaviour in line with what you learn
- Financial incentives: pay people for doing the right thing
- Legal/ prescriptive measures: keep people from cheating by making a law prohibiting it
DUAL PROCESS THEORY:
System 1 (unconscious, automatic, rapid, parallel, contextualised, heuristics, biases), system 2 (conscious, controlled, rational.
serial, deliberative)
- Bias: systematic deviations from rational decision making
- Heuristic: not using all information provided, mental shortcut, goal of making decisions more quickly/ accurately than
when using complex methods
- It was common to focus on system 2 when influencing behaviour but: telling people what to do doesn’t always work =
develop nudges!
NUDGING & CHOICE ARCHITECTURE:
Focus on system 1, any small feature in environment that influences our choices.
- Tversky & Shafir: disjunction effect: people are irrational: changing the decisional context/ adding uncertainty can
influence people’s decision. Decisions aren’t always rational. Context-dependent!
o Use deviations from rationality to change behaviour
§ Social norms
§ Gains vs. losses
§ Likeability
§ Reciprocity
§ Anchoring
§ Status quo bias
§ Framing
§ Priming
- Choice architecture: arrangement of e.g. food influences the choices we
take, reshape choice environment so that automatic choices align with
optimal/ preferred behaviour. Use all types of psychological phenomena
to shape decisional context.
o Difference nudging & architecture: arch.: reshape choice environment. Nudge: shaping it into the direction of
the optimal option.
- Oliver: Features of nudges:
o Rely on system 1) of dual process theory
o Do not have to choose nudged option: freedom! = libertarian paternalism: belief in protecting an individual’s
rights & freedoms. Paternalism: infringement in the personal freedom of an individual with a beneficent/
protective intent. It is paternalistic because it motivates behaviour change that aligns with target population’s
deliberative preferences.
= free will preserving infringement with a beneficent intent.
o No changes to economic incentives
o Informed by behavioural economics
o Beneficial/ optimised decision for decision maker (internalities)
- Classical nudge: cares about internality: you take decision that is good for you but doesn’t care about university.
o Behavioural, liberty, internality.
WHY A NOBEL PRIZE?
- Easy & cheap to implement: huge difference for governments
- Public policy interventions
- Rebranding behavioural economics
- Bridging the gap between academia & the real world
- Nudge unit: Mindspace report, behavioural insights team
, Lecture 2) Behavioural change in public policy, 26/08/2019
- Behavioural insights team: improve government & promote positive behavioural change; how do people take decisions
in daily life? = behavioural government (Nudge units)
o BUT: behavioural insights make money! Small companies sell studies to the government
ETHICS OF BEHAVIOURAL CHANGE INTERVENTIONS
- Libertarian paternalism: free-will preserving intervention with a positive intent. But: Do we have the right to make
people do what is best for them?
o Sunstein: totally ethical because of the idea of libertarian; no force.
o Choice architects take decisions: a lot of different ways; has to be arranged anyway, so why don’t they choose
the option that is best for the consumer?
o White (2013): against the use of paternalistic nudges by the government but enhance individual choice &
autonomy.
o Do people really have the freedom not to choose the nudged option?
- Sludge: when a nudge is not used to benefit the decisionmaker, e.g. travel insurance
- “Who determines what is good?” policy makers, government, companies or individuals?
o What is an optimal/ good choice?
§ Science: based on empirical evidence
§ Society: reduce harm to others
§ Environment: respect for nature & resources
§ Beliefs & ideology: value-based
§ Preferences:
• Classical economics: Mill: choices reveal value & are stable.
• Psychology: hedonic experiences & context aren’t stable. E.g. skin problems & tanning,
underweight & calorie intake.
UNDERSTANDING HOW NUDGES ARE USED IN POLICY
- Use knowledge about the 2 systems & how they interact with our
surroundings
- Are used to make our automatic system choose differently.
- Are used to activate our reflective system at the right time
- Transparent, non-transparent nudges. Are non-transparent nudges free-will
preserving?
VACCINATION
- Convince people to vaccinate in order to decrease the spread of diseases, e.g. measles. Only 75% of world
population are vaccinated while 95% are necessary!
- Possible solutions:
o Law
o Incentives: financial, social
o Nudge
- Chapman (2016): vaccination on default: Vaccination appointment defaults alter what constitutes the course of least
resistance, facilitating vaccination behaviour without necessarily changing people’s attitudes/ perceived norms about
vaccination.
o Opt-in version, no letter, opt-out version.
o Vaccination rates are highest in the opt-out version. No difference between no letter/ opt-in version, but more
people who didn’t receive a letter get their vaccination at the doctor’s office than at the flu clinic.
o scheduling patients by default for a flu shot appointment leads to higher vaccination rates at a medical practice
than does merely encouraging flu shot appointments
o Letter = nudge?
- Taylor et al.: Framing of vaccine effectiveness:
Statement A and F are most convincing because
they include certainty (100%).
