General

Nudges can backfire…

Posted on by lindalindstroms

In  Sweden we have an alcohol monopoly, where only the store called Systembolaget is allowed to sell alcohol. Stated at Systembolagets webpage, it exists for one reason: “To minimize alcohol-related problems by selling alcohol in a responsible way, without profit motive.” During Christmas this year, they have a campaign with a message on their plastic bags stated as follows:

Bildtillblogpost4

“ The fact that we are the only one that sells beer, wine and liquor is a bit uncomfortable for you. But this is what you contribute to this year:

About 2000 saved lives

About 20 000 less violence crime

About 11 million less sick days”

Now… From a behavioural perspective, how does this make you feel? Perhaps I’m the only one, but this text actually puts me in a mood that make me feel – Yay, I just bought something for a good cause! Great, this justifies my alcohol shopping… Well, let’s be frank, I don’t think that’s the intention with the message.

Research led by Prof. Robert Cildini at Arizona State University proves that nudges can indeed backfire. In a national park, the research team tried to stop people from stealing petrified wood by posting: “Many past visitors have removed wood from the park, changing the state of the Petrified Forest”. But, with this warning, theft rates still stood high. So they changed the sign: “Your heritage is being vandalized every day by theft losses of petrified wood of 14 tons a year, mostly a small piece at a time”. Surprisingly, this warning influenced theft – but not in the intended direction: stealing jumped from 5 percent to almost 8 percent. The researchers concluded that the message people received was not “don’t steel the petrified wood” but rather “Stealing petrified wood is a common and socially acceptable behaviour.” This research proves that the intended effect the nudges can truly backfire. It emphasizes (as always) the importance of experimental testing thus, behavioural response to nudges can be unpredictable and very context depended.

I assume, that the intentions behind Systembolagets campaign are in line with the reason of why they exist, again: “To minimize alcohol-related problems by selling alcohol in a responsible way, without profit motive.” Maybe the campaign does work, we don’t know, as it’s most likely not tested.

But… According to me, from a behavioural perspective this is not a responsible campaign as it gives you a positive feedback holding a bag of alcohol. Hypothetically, this type of nudge may backfire making consumption of alcohol unintentionally justified as a good cause and consequently increase those numbers stated on the bag for next year…

merry christmas from systembolaget

“Systembolaget wishes you a very merry christmas”……

Reference:

Cialdini, R. B., Demaine, L. J., Sagarin, B. J., Barrett, D. W., Rhoads, K., & Winter, P. L. (2006). Managing social norms for persuasive impact. Social influence, 1(1), 3-15.

 

So, when is it legitimate to nudge?

Posted on by lindalindstroms

Critical debates about the nudge approach as a policy tool are often about that nudging “manipulates people’s choices“. That government tricks people to, in their unconsciousness, choose a certain choice. When it comes to this characterization of critique, Hansen and Jespersen (2013) highlights in a well written paper that there are often some unseen areas in the debate. Firstly, they argue that standard policy tools are seldom transparent. Hence, the critique about “manipulation of choice” applies not only for nudging – but for most types of policy instruments. E.g. who among us knows what taxes are applied to every product in the supermarket? So, perhaps a more accurate debate regarding this critique would be the question if paternalism is justified at all? And that’s another debate… Another valid point is that there are different types of nudges, some that may be more appropriate than others when it comes to policy implementation. Hansen and Jespersen divide nudges in to two types; type 1 and type 2. Both aim at influencing automatic behaviour*, but only type 2 is anchored in reflective behaviour*. Therefore, type 2 can be argued to change – not only people’s behaviour – but people’s choices, thus alleviate the manipulation of choice. The authors further divide these types in to two groups – transparent and non-transparent nudges. A transparent nudge is when the citizen being nudged, she or he reasonable understands the intention behind it. A Non-transparent nudge is working in a way that the citizen in situation cannot reconstruct the means by which the behavioural change is pursued. I have tried to clarify these types in the following table.

Transparent Non-transparent
Type 1 Reflective system not engaged in the behaviour change per se, but the nudge is transparent in the way that it allows the influenced person to recognize the means. Examples: Using color red to draw attention, changing printer defaults from one-sided to double-sided printing Trigger change in automatic behaviour, but doesn’t give away the intention behind the nudge.Examples: reducing plate size, changing order of food in restaurants.
Type 2 Engages the reflective system and prompts decision-making in ways that are transparent for the person. Examples: Fuel economy information label, prompted choice for organ-donation. Reflective system engaged, doesn’t happen in a way that by itself gives people epistemic access to the intentions and means. Example: posting faces to increase compliance rates with norms such as cleaning up after oneself or paying for coffee

Still, this is a general categorization and the transparency can have different scales. For a more detailed description – I recommend you to read the paper. Thus, one comment that I would like to add to this paper is that people have different reactions to the nudge depending on their own internal context. A nudge can be subjective – transparent for one person while non-transparent for another hence may be hard to charegorize. But in general, I think this is a quite nice way of analysing central component for a more nuanced ethical framework for policy recommendation. Nevertheless, behavioural market failures notion that people are in fact sometimes bad choosers – making their (and other) lives go worse. Sunstein (2014) argues that it is legitimate and good reasons to use choice architecture to counteract behavioural market failures (i.e. justify paternalism) when behavioural market failures occur and are significant. Sunstein ventures a general principle; the first (and only) law of behaviourally informed regulation: In the face of behavioural market failures, nudges are usually the best response, at least when there is no harm to others. Expectations to this law is that a careful analysis of the social welfare consequences from the choice response. For example, laws that require people to buckle their seatbelts, or prohibit them from texting while driving are based on well-justified cost-benefit grounds and count as acceptable forms of paternalism. Hence, if justified by this law of behaviourally informed regulation, e.g. some types 1 and non-transparent nudges can be legitimate to use in policy. Conclusions we can draw from this discussion are that by maintaining transparency in the goals and methods of nudges, policy-makers can avoid the moral pitfall of paternalism. However, this does not preclude the mandate of using e.g. type 1 non-transparent nudges, but that it is important to careful evaluate and proper acknowledge the cost and benefits of the potential response from the nudge. * The dual process theory underpins the nudge approach and encompasses the concept of ‘system 1 and system 2 thinking’ (Kahneman, 2011). It emphasizes that the human brain functions in two ways that invites for a distinction between two kinds of thinking. ‘System 1’ is fast, intuitive and automatic, and ‘system 2’ is slow, rational and reflective. The two cognitive modes of thinking can be active in combination or in isolation. Thaler and Sunstein (2008) names them ‘automatic’ and ‘reflective’ system. References: Hansen, P. G., & Jespersen, A. M. (2013). Nudge and the Manipulation of Choice: A Framework for the Responsible Use of the Nudge Approach to Behaviour Change in Public Policy. Eur. J. Risk Reg., 3. Kahneman, D. (2011). Thinking, Fast and Slow. New York Sunstein, C. R. (2014). Why Nudge?: The Politics of Libertarian Paternalism. Yale University Press. Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving Decisions About Health,Wealth, and Happiness. Yale University Press, Boston

Nudge – the word versus the concept

Posted on by Britt

Both those pro and against nudging as a tool for behaviour change often have a wrong idea about what nudging really entails. This is firstly because the concept is not easily definable. We’ve tried a bit in previous posts (see for instance this one or that one) to explain the concept but it remains a tricky concept. It is much easier to say what is not a nudge, than to define what is. Taxes, coercion and other means of force – those that take away freedom of choice – are not. Anything else might be a nudge, but not necessarily so. Hence, a lot of conceptual confusion.

 

However, there may be another reason why not everyone can agree on what is – and what isn’t – a nudge. After all, there is the word nudge itself, and then there is the conceptual meaning that we – in accordance to the initial ideas of Thaler and Sunstein – assume that the word nudge means. However, the official dictionary meaning of nudge is(as far as Webster Merriam is concerned, that is):

1) to touch or push (someone or something) gently

2) to push (someone) gently with your elbow in order to get that person’s attention

3) to encourage (someone) to do something

Possibly, the word has old scandinavian origins, for those interested in etymology.

Nudge: “to push slightly with the elbow,” 1670s, perhaps from Scandinavian (compare Norwegian nugge, nyggje “to jostle, rub;” Icelandic nugga “to rub, massage”). Related: Nudged; nudging. (http://www.etymonline.com)

Who are we to take an age-old word from the dictionary and claim it to be only that which we say it is. We can’t, really! And so there really is no way for us to say that something is or isn’t a nudge in the more general sense of the word. Take for instance the Dutch website http://www.nudge.nl. A cool website and initiative (sadly only in Dutch right now) which is about sustainable development projects. Freely translated from their ‘about’ section, they: “By facilitating bottom-up initiatives, offer negotiation perspectives that are easily accessible for all. Activities are based on ecological, economical and social impacts, both large scale and small scale.”. It is a social enterprise but it has not anything to do per se with the nudges we are talking about here. Confusing, yet who are we to criticize? They have just as much right to use the name as we do. So if some critic states that something is a nudge, and that he/she despises it for cooercing him/her into a certain direction, the only thing we really can say is “No, that is not a Thaler-Sunstein-nudge!”. It might be a normal nudge, if the person really is experiencing a government official shoving him/her in the back.

 

But then, with all this conceptual confusion, isn’t it better to take on a different name? Maybe. Maybe not. The weakness of the word – that it is used for other things as well because it is an already existing word – is also its strength. The word symbolizes what nudges are about. We of the behavioural-economy-nudge do not literally want to push – gently – consumers towards the right electricity choice, healthy and eco-friendly products or what not. I for one do not plan to improve the world by shoving people around. The strength of the word nudging lies in its symbolic meaning of giving people a little … well… nudge … in the right direction. It is a figurative way of saying we encourage people to do this and that, without standing in their way to do things differently.

 

I for one opt for maintaining the terminology as it is now, although a lot can be done about making clear (both to ourselves as towards others) what our Thaler-Sunstein-Nudge really is. But I am just one of many. Anyone who has the most brilliant term, slogan, or whatnot for what we really want with our nudge, make yourself known. There is ample space below this article for your very welcome feedback!

 

Britt

The Economic (Super)man vs. HomER economicus

Posted on by lindalindstroms

With this blog post, I intend to give a (very) brief taste for newbies to the field of behavioural economics. And by that – lets start by talking about some standard economic theory and a rarity of man called Homo Economicus. Homo economicus is a very rational man who carefully weighs cost and benefits and is well-informed by his existing preferences – that is, he computes the values of all the options he faces, and then follows the best possible path of choice. We can also call him superman – hrmhrm, minus the fact that he only maximizes utility in his choices with regard to his own self-interest. This self-interested Superman (nope, he doesn’t sound very charming at all) is what standard economic theory assumes we are as humans. Subsequently, it is also what standard policy tools (e.g. taxes, subsidies, bans & regulations) that target human behaviour are based on.

However, we all now that we as humans are not always rational in our choices. A substantial body of research proves that we are very much influenced by limited cognitive resources, incomplete information and heuristics that lead to systematic deviations from our “rational” choice. Heuristics are mental shortcuts that humans rely on which though to simplify judgemental operations. These heuristics are in general quite useful (it helps you to not being forced actively reflect on every little single bit action you do), but also quite often they lead to severe cognitive biases. Biases that reasons in a way, which is not in accordance with norms of logic and probability. Let’s give you one of the behaviour economics guru Daniel Kahnemans’s favourite examples of how a cognitive bias can occur (although I Swedishonized the version a bit):

An individual in Sweden has been described by a neighbour as follows: Veronika is a very shy and withdrawn person but always helpful to people. She has a passion for reading books and is a very tidy soul with a detail for order and structure. Is Veronika more likely to be a librarian or a doctor?

Now, most people’s first intuitive thought or image that pops up into their mind is that Veronika is a librarian. Surely, this is because Veronika resembles a librarian more than a doctor. But, what “rational” people first should think of is that there are almost ten times more doctors than librarians in Sweden – hence Veronika is more likely to be a doctor. This example is just one out of MANY that proves that we deviates from Mr. Rational Superman.

In fact, we are far more complex than just being rational and therefore behavioural economists rather call us humans HomER economicus. For example, we tend to postpone things that we rather would like to be done with, have unhealthy living habits where we smoke, eat too much and exercise to little and – we consume beyond the planet’s capacity to recover. Therefore, in the area of public policy-making and tools that are based on biased assumptions – the intended effect may lead to failures. Behaviour economics, and in particular nudging, which recently has become a field within applied behavioural economics, is all about understanding these failures in order to change human behaviour.

Applied behavioural economics acknowledge the importance of having an interdisciplinary evidence-based approach using economic with insights from psychology. It emphasizes the role of analyze and test (often via experiments) in order to reveal if the policy intervention actually reached an intended effect on human behaviour. In conclusion, the purpose with this blog – as Britt mentioned in her previous post is NOT to say that “nudging” is the solution of all problems – but to spur an open debate about use of it as a tool with the aim of increasing “good” behaviour in Sweden. Nevertheless, not all nudges are good nudges – nudging is a powerful tool and can be harmful if being used in the wrong hands. But a debate about the ethics of nudging requires much more space than what I will dedicate this post – we’ll save that discussion for an upcoming one!

For those of you how had no clue what behavioural economics is about – hopefully this post gave you a teaser about it and why we should look at policy through a evidence-based behavioural lens.

Over and out!

On the behalf of the Swedish nudging team,

Linda

Ps.. Oh, and to be clear – I only shared a glance from my own head in this post. For a more comprehensive understanding I suggest you to dig deeper in to the literature. We will soon provide a reading – and watching list for those who are interested in knowing more!

The Swedish Nudging Network – Warm Words of Welcome

Posted on by Britt

Welcome to the new blog site of the Swedish Nudging Network. We are happy to see you found us. Are you familiar with nudging? Nudging, is it the solution to all our problems or the greatest joke in behavioural science since Milgram* and colleagues got people to stare into the distance, for no apparent reason other than that others seemed to be doing it? It is easy to be excited about it, but nudging people is not a panacea for all the world’s problems. It will not solve wars nor will it feed the poor, but what it can do, is help people in good behaviour in their everyday lives. That is great, right? But what is it, then, to nudge? The term nudging as it was invented by Richard Thaler and Cass Sunstein is all about making small changes in a person’s choice environment (we often like to call it choice architecture). This choice environment can be physical (the place you are standing at, the items around you, the view in a distance) as mental (the memories of good old days, your identity, or knowledge about something) and social (who is watching, what would they think, do you care?). All these things affect behaviour, and they do so, always. There is no choice nor behaviour that does not have an choice architecture (just as there is no building that has no ‘real’ architecture). Here is where nudging comes into play. Nudging is trying to facilitate better behaviour (for health, society and the environment) by changing the choice architecture. Pivotal (and we cannot emphasize this enough) is that the options remain open. If a so-called choice architect decides to remove A and B from an ABC choice, then he is not nudging, he is coercing. Nudging would be to make it more likely for any individual to choose one over the others, but always without infringing on a person’s own freedom to choose.

Here ends the first lesson on nudges. We hope that the reader will scroll down and enjoy the many posts that we will put on here. They are all related to nudging, and will hopefully enlighten and inspire both the expert and the lay-person. Enjoy and never hesitate to give your feedback! Kind regards on behalf of the nudging team of Sweden   Britt

* Milgram and colleagues, they did an experiment to see what people would do if they see others behave in certain ways. They posted an individual on a streetcorner and had him stare at the sky. Little happened. They then had five people stare at the sky, same point, same time of the day. What happened? All of the sudden, a lot of pedestrians started staring at the sky as well! Social proof. Useful for something? Feel free to let us know how you would use this. Help us inspire