Lecture 7 Flashcards
4 aspects to improve incentives with behavioral design?
- Timing of rewards
- Size of rewards
- Framing of rewards
- Gamification
How to improve timing of rewards?
- Instant gratification
2. Frequent reinforcement
How to optimize the “size” of rewards if you can’t simply make it bigger?
1) Turn the incentive into a lottery
2) Make it team based lottery (such that if your team wins but you didn’t complete the task, you win nothing)
How to optimize to framing of rewards?
A separate reward is more motivating than a discount
Overview of mental accounting of rewards?
Tendency to divide current and future assets into separate, nontransferable buckets
(eg receiving a deduction is not the same as receiving a deduction on a premiuim)
Which are more popular: individal/group rewards/deposits?
Which are more efficacious - rewards or deposits?
individual rewards
collarborative rewards
Deposits
4 criticisms of behavorial economics?
- Fils to make sharp preductions
- Effect sizes are small
- Promoting conservative political agenda
- Ethcs are debatable
Why does BE fail to make sharp predictions?
(does not preduct which bias will predominate)
Implementation intention?
Specifc where, when and how
IF I am at home and I want dessert, THEN I will make a fruit salad
Ethical issues of BE include opt-out systems.
One solution is active choice, which is?
Forcing a choice, no default
Rules for when to nudge
- Errors are common (ie mindless eating)
- Nudge imposes a trival cost (simple to undo for those who opt out)
- Latent demand for the nudge (people will not object if they found out)
Low SES people are more liklely to fall into which problems (compared to high SES people)
Scarcity Tax and Sadness Trap
Pros of Behavioral design?
- If it has low cost, its a public health victory
- In some cases could help narrow health disparities
