BSPA Pull Quote October 26-02

This week on #policyshop, Erin Frey wrote a must-read post on what makes behavioral interventions last. We're also pleased to feature Dilip Soman's cliff notes for generating behavioural* interventions.

*courtesy Canadian spelling of behavioral, since Dilip is at Rotman in Toronto

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The 1-2-3-4's of Behavioral Insights

By Dilip Soman

1

The central objective of any organization

 

Be it a government, a welfare organization of a business; and be they for profit or not for profit, a fundamental objective of all organizations is to influence and change their stakeholders’ behaviour.

 

2

The two flavours of rationality

 

The fact that people don’t make choices per the laws of economics doesn’t mean they are “irrational,” they are just being human. Instead:

 

Irrationality 1.0: When organizations act under the assumption that its stakeholders are rational. For instance, they offer a lot of choice, disclose a lot of information and make alternatives economically superior (but perhaps more complex) when consumers might just not care – or even worse – be confused by these actions.

 

Irrationality 2.0: When people can’t do what they intend to do. We all want to eat healthy, exercise regularly, get medical check-ups and save for the future. Life, though, gets in the way!

 

2

The two approaches to help people make better decisions

 

Equip: Equip them with the tools they need to improve decision making. This could include information, decision engines, advice or appropriate decision heuristics.

 

Pad: Change the context so that should the person neglect to make a choice, or chooses poorly, the consequences are not disastrous.

 

3

The three tools of the choice architect.

 

A Frame: Framing the decision by changing the context, alternatives, sequence of presentation, or the presentation of relevant information can have effects on what people choose.

 

A Lock: Designing locks allow people to accomplish things that they want to do. Locks can be social (using peer pressure to follow through on pre-commitments, e.g., stick.com), psychological (using a understanding of behaviour to make it easy to follow-through, e.g. Save More Tomorrow), technological (using technology to prevent deviant behaviour, e.g. Clocky) or – physically a lock on a consumption item! (e.g., Kitchensafe.com)

 

A Prod: Making choices active (or prompted choice) can serve as the prod for getting people to think and decide. Decision-points like reminders, interruptions or small transaction costs can give people the opportunity to convert passive actions into active choices.

 

4

The four types of choices that choice architects can influence

 

Compliance: Getting people to act in accordance with a regulation set by a government or agency (e.g., tax deadlines, regulatory paperwork requirements)

 

Switching: Getting people to convert from one choice to another (e.g., brand switching, replacing soda with water at meals)

 

Following Through: Getting people to follow through on commitments they themselves made (e.g., completing a weight loss regimen, or just acting on your intentions)

 

Active Choosing: Getting people to break undesired habits by converting passive mindless decisions into active choices.

 

4

The four approaches to behaviour change. In getting people who are currently choosing A to do B instead, we can

 

Restrict: Ban A, or withdraw Option A altogether

 

Incentivize: Give a discount / subsidy for B, a tax or penalty for A

 

Inform: Provide people with copious information containing good reasons to choose B over A

 

Nudge them: Change the default or add in a decision-point!

 

The best behaviour change programs might include a combination of all four approaches!

 

You can download a PDF version of the 1-2-3-4 guide here

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