Lesson 8

Question 1

1.1 describe what a nudge is and their role

Answer 1

Any aspect of choice architecture that alters people’s behaviour in a predictable way without forbidding, penalizing or rewarding any of the options for behaviour.

To count as a nudge the intervention must be easy and cheap (opt in vs opt out policies)

Question 2

1.2 List 4 dimensions that can be used to classify nudge characteristics

Answer 2

1) Boosting Self control vs activating a desired behaviour

2) Externally imposed vs self imposed

3) Mindful vs Mindless

4) Encouraging vs discouraging

Question 3

1.2 In the context of a dimension used to classify nudge characteristics explain: Boosting Self control vs activating a desired behaviour

Answer 3

With certain behaviours, such as saving money or exercising, there is a discrepancy vs intent and action. Nudges that boost self control help correct this.

In other cases nudges to activate a desired behaviour are more useful if we are not actively considering the desired behaviour or are unsure what it is. (e.g. recycling bins with pictures of what is recyclable)

Question 4

1.2 In the context of a dimension used to classify nudge characteristics explain: Externally imposed vs self imposed

Answer 4

Self imposed nudges are voluntarily adopted

Externally imposed nudges don’t require us to seek them out. They present available options in a way that passively shapes behaviour

Question 5

1.2 In the context of a dimension used to classify nudge characteristics explain: Mindful vs Mindless

Answer 5

Considers whether the nudge will guide us to take a more deliberate cognitive approach to decision making or towards a more automatic implicit approach.

Mindful nudges guide us to a controlled state and help us follow through on a behaviour.

Mindless nudges include the use of emotion, framing or anchoring to sway the decisions we make

Question 6

1.2 In the context of a dimension used to classify nudge characteristics explain: Encouraging vs Discouraging

Answer 6

Encouraging nudges facilitate a particular behaviour.

Discouraging nudges hinder or prevent a behaviour believed to be undesirable.

Question 7

1.3 Explain the significance of mapping the decision context in designing an effective nudging strategy (4 points)

Answer 7

Mapping or auditing the decision making process is the first step for designing a nudging strategy.

This is followed by identifying the key heuristics and influences.

This helps identify factors that prevent us from following through on our intentions.

These bottlenecks represent areas where a nudging srategy might yield quick results.

Question 8

1.4 Outline aspects of the end user’s decision making process to address in a context audit (4)

Answer 8

1) The properties of the decision including incentives, motivations, the attention it receives, how choices are presented, and the default option

2) Information sources and how information related to the decision is gathered and presented.

3) Features of the individual’s mindset and whether emotions influence the outcome of the decision

4) Environmental and social factors such as peer pressure and lengthy application processes

Question 9

1.5 Outline factors to consider when prioritizing nudge selection to address bottlenecks in the decision making process (5)

Answer 9

1) Operational costs associated with implementation

2) What bottleneck the nudge addresses (prioritize those that are further upstream in the process first)

3) Relative reach - self imposed nudges such as pre-commitment may not reach as many people as defaults or automatic enrollment

4) Interventions like automatic enrollment have a high adoption rate but lead to everyone accepting the same terms and benefits. Look at different segments of the target audience that may have different behavioural preferences

5) Long term effectiveness

Question 10

1.6 Explain the role of process and evaluation of options in testing the effectiveness of nudges

Answer 10

An outcome evaluation is important to determining whether or not a nudge should be continued or if a different one should be implemented

Question 11

2.1 Explain the concept of choice architecture

Answer 11

The way a choice is presented influences what the decision maker does.

Choice can be influenced in many ways including
- order of choice presentation
- framing
- order of attributes
- ease of use
- selection of defaults

In reality there is no neutral architecture - any way the choice is presented influences the decision made.

Question 12

2.2 describe two categories of tools available to choice architects

Answer 12

1) Tools used in structuring or setting up the choice task,

such as the optimal number of options or using a technology to assist in the choice task

2) Tools available for describing choice options,

(how to present to decision makers) such as partitioning options into groups or categories

Question 13

2.3 What two considerations does a choice architect need to balance in terms of the number of options offered

Answer 13

1) More options increases the chance of offering a preference match to the decision maker

2) More options places a greater cognitive burden on the decision maker

Question 14

2.3 what are some factors that can affect the balance between the number of choice options a choice architect gives or rule of thumb guidelines (4)

Answer 14

1) characteristics of the decision maker

2) One wants the fewest number of options that will encourage a reasoned consideration between them

3) One wants an adequate number of options to avoid generating context specific preferences (where the presence or absence of an option influences what is chosen)

4-5 options is generally a good starting point, One could start with a limited choice set and then provide more options as desired

Question 15

2.4 Explain how using technology based decision aids while structuring the choice task can be both beneficial and detrimental (3+1)

Answer 15

Beneficial:
- help identify alternatives
- interactive decision making aids can be used to compare choice alternatives in terms of attractiveness in various dimensions
- can be designed to steer decision makers to a particular decision

Detrimental:
- can be designed to steer decision makers to a particular decision

Question 16

2.5 Explain the role of defaults in structuring the choice task

Answer 16

Option an individual gets if they don’t actively decide.

Powerful too for choice architect as most users choose the default

Question 17

2.6 List 4 kinds of default policies

Answer 17

1) Simple default - one for everyone

2) Random Defaults

3) Forced Choice - withholding the product or service is the default and releasing it to the recipient only after a choice is made

4) Sensory defaults - change according to what can be inferred about the user - change the language based on country for example

Question 18

2.5 List 3 default setting options for products and services that are frequently chosen

Answer 18

1) Persistent defaults - past choices are remembered

2) Reverting defaults - the last changes made to the default configuration are forgotten

3) Predictive defaults - intelligently alter reuse defaults based on observation of the user

Question 19

2.6 Outline ethical issues associated with the use of defaults and policy to address these issues (4 points)

Answer 19

Acceptability of using a default to guide choice has much to do with the reason the default is having an effect.

When decision makers are aware defaults are being used they exhibit a degree of metacognition showing they successfully retain autonomy and freedom of choice.

However if defaults are in effect because decision makers aren’t aware they have choices or because the transaction cost to change the default is too high the defaults impinge upon liberty.

An often prudent policy is to set the default to the option most people prefer when making an active choice.

Question 20

2.6 Outline ethical issues associated with the use of defaults and policy to address these issues (4 points)

Answer 20

Acceptability of using a default to guide choice has much to do with the reason the default is having an effect.

When decision makers are aware defaults are being used they exhibit a degree of metacognition showing they successfully retain autonomy and freedom of choice.

However if defaults are in effect because decision makers aren’t aware they have choices or because the transaction cost to change the default is too high the defaults impinge upon liberty.

An often prudent policy is to set the default to the option most people prefer when making an active choice.

Question 21

2.7 Many choices that we face involve outcomes that unfold over long periods of time. List 3 ways that this impacts decision making behaviour (Intertemporal biases)

Answer 21

1) We tend to be myopic - we prefer positive outcomes early and heavily discount future options

2) Uncertainty about the future can cause our preferences for future outcomes to be unclear such that certain types of outcomes are systematically over or under weighted. We can fail to consider satisfactory but second best options

3) We are often overly optimistic about the future and overestimate the probability that desired outcomes will occur as planned.

Question 22

2.8 Outline two tools that a choice architect has to address intertemporal biases

Answer 22

1) Order of consideration - drawing attention to the delayed options can refocus a decision maker towards satisficing by considering second best options in light of cost and constraints involved.

2) Placing limited windows of opportunity - can overcome the tendency to think that the future holds more resources

Tools that translate aspects of the choice into immediate salient outcomes are generally more successful

Question 23

2.9 Explain how structuring the choice task as a single choice vs a series of choices affects the decision maker’s search process

Answer 23

the strategies that people use to make complex decisions differ than those that only involve one decision.

Decision makers first screen choices based on a subset of attributes and then go back and look at the remaining alternatives.

Long or complex processes can be reduced with decision staging. This involves deciding what information to focus on as well as choices between attributes and alternatives. Breaking down a decision into multiples stages may make the process easier. Choice architects can also work with an understanding of sequential decision making by facilitating certain comparisons at different stages of the choice process.

Question 24

2.10 Explain what the tendency towards even allocation is (define + 3 examples)

Answer 24

When we allocate resources over a fixed set of possibilities we are typically biased toward even allocation over each group or category that has been identified. For example

1) Personal investment, we tend towards allocating 1/n of our savings to each of the options that are singled out in retirement plans

2) In consumer choice we tend to seek variety when choosing multiple goods for future consumption

3) In decision analysis we are biased towards assigning equal probabilities to each event that could occur and equal importance weights towards each attribute that is explicitly identified

Question 25

2.10 Discuss the tendency towards even allocation as it is used by choice architects (define + 3 examples)

Answer 25

When a resource is divided into smaller units we encounter additional decision points which can be influenced by the groups or categories.

1) Assigning favored investment accounts into separate superordinate categories and disfavored investment accounts into a single category we can nudge towards a greater investment into favored options

2) By segregating healthy menu items into separate categories and integrating unhealthy ones into one category we can nudge people to choose a greater number of healthy options.

3) By segregating later time periods into separate categories and integrating earlier periods into a single category we can induce greater patience in consumption. By splitting out the important attributes into several categories and unimportant ones into one category we can increase the importance given to more important attributes.

Question 26

2.10 Discuss the tendency towards even allocation as it is used by choice architects (define + 3 examples)

Answer 26

When a resource is divided into smaller units we encounter additional decision points which can be influenced by the groups or categories.

1) Assigning favored investment accounts into separate superordinate categories and disfavored investment accounts into a single category we can nudge towards a greater investment into favored options

2) By segregating healthy menu items into separate categories and integrating unhealthy ones into one category we can nudge people to choose a greater number of healthy options.

3) By segregating later time periods into separate categories and integrating earlier periods into a single category we can induce greater patience in consumption. By splitting out the important attributes into several categories and unimportant ones into one category we can increase the importance given to more important attributes.2

Question 27

2.11 Explain how an individual’s intrinsic preferences or beliefs impact partitioning

Answer 27

The impact of partitioning will be the strongest among decision makers with weaker intrinsic preferences or beliefs.

For example wine novices asked to choose among varieties of white wine were more likely to diversify over grape if that’s the way wines were grouped or by country of that’s the way wines were grouped. This effect was greatly weakened among wine experts.

Question 28

2.12 Explain how designing attributes can impact choice behaviour

Answer 28

Choice architects influence decision making behaviour by making particular attributes more or less salient.

Question 29

2.12 List the principles that improve accuracy in choices (4)

Answer 29

1) Parsimony
2) Linearity
3) Comparability
4) Evaluability

Question 30

2.12 In the context of a principle that improves accuracy in choices define: Parsimony

Answer 30

Decision makes understand more information and weigh important information better in choices that require less cognitive effort (they can parse it)

If overwhelmed by too many attributes we may simplify our decision by focusing on one.

Cognitive effort can be reduced by using a smaller set of attributes and highlighting the meaning of only the most important.

this must be balanced by the need to include all attributes

Question 31

2.12 In the context of a principle that improves accuracy in choices define: Linearity

Answer 31

A decision attribute may have a nonlinear relationship to a more fundamental objective.

Non linear attributes (e.g. monthly payments in relation to credit card payback periods) may be made more understandable by rescaling them or translating them (e.g. Monthly payment needed to eliminate the balance in a certain number of years)

Question 32

2.12 In the context of a principle that improves accuracy in choices define: Compatability

Answer 32

This is achieved by expressing the same attribute of different activities or products on a standardized scale (e.g. monthly dollar cost of subscriptions)

Question 33

2.12 In the context of a principle that improves accuracy in choices define: Evaluability

Answer 33

For higher quantitative information that can be difficult to process because the numbers are challenging or the domain is unfamiliar breaking into categories such as grades or assigning endpoints clearly labeled as good or bad facilitates evaluation.

When numbers are supplemented with evaluative labels we can integrate more information into our judgement more quickly.

Question 34

2.13 Describe the tool attribute translation

Answer 34

Mapping an attribute to its consequences for other objectives

Research suggests that we may bring to mind only half the objectives we care about in a decision. There may be benefits in translating between attributes. Such as labeling gas consumption both in terms of driving costs and CO2 emissions

Question 35

2.13 Describe the tool attribute expansion

Answer 35

Increasing the use of an attribute by changing the scale on which it is expressed.

For example gas consumption can be expressed over short or long distances. Expanding the denominator makes the numerators larger and makes the differences between alternatives appear larger, leading to more weight in choice

Question 36

3.1 Explain how characteristics of the decision maker can influence the effectiveness of nudges

Answer 36

The effectiveness of nudges can be increased if there is sensitivity to variation between individuals.

Question 37

3.2 Explain some of the challenges inherent in using the decision maker’s experience of the selected choice in evaluating the effectiveness of a choice architecture intervention

Answer 37

Most theories of choice assume that the utility of an outcome estimated before the event equals the utility after the event.

Hoever we often fail to accurately predict how we will feel about the outcomes of our choices. When we have more experience with an event we can more accurately predict how we will react.

Some features of choice environmnets can reflect this. For example cooling off periods for consumers, wherein they can cancel a choice, can protect them. Also experienced agents and advisors can encourage a decision maker to consider features of options that will be more important when the outcome is experienced

Question 38

4.1 What does MINDSPACE stand for

Answer 38

Messenger
Incentives
Norms
Defaults
Salience
Priming
Affect
Commitments
Ego

Question 39

4.1 In the context of the MINDSPACE framework define: Messenger

Answer 39

We are influenced by who communicates information

Question 40

4.1 In the context of the MINDSPACE framework define: Incentives

Answer 40

Our responses to incentives are shaped by prdictable mental shortcuts such as strongly avoiding losses

Question 41

4.1 In the context of the MINDSPACE framework define: Norms

Answer 41

We are strongly influenced by what others do

Question 42

4.1 In the context of the MINDSPACE framework define: Defaults

Answer 42

We go with the flow of preset options

Question 43

4.1 In the context of the MINDSPACE framework define: Salience

Answer 43

Our attention is drawn to what is novel and seems relevent to us

Question 44

4.1 In the context of the MINDSPACE framework define: Priming

Answer 44

Our acts are often influenced by subconcious cues

Question 45

4.1 In the context of the MINDSPACE framework define: Affect

Answer 45

Our emotional associations can powerfully shape our actions

Question 46

4.1 In the context of the MINDSPACE framework define: Commitments

Answer 46

We seek to be consistent with our public promises and to reciprocate acts

Question 47

4.1 In the context of the MINDSPACE framework define: Ego

Answer 47

We act in ways that make us feel better about ourselves

Question 48

4.1 In the context of MINDSPACE discuss automatic vs reflective behaviour

Answer 48

Some elements explain largely automatic effects on behaviour (norms, defaults, salience, priming, afftect) while others relate to elements that draw on more freflective processing (messenger, incentives, commitments, ego)

Traditional theories of behaviour change that relate to the reflective system inform and provide value. However to understand how influences on the reflective system work we need to account for the influence of the automatic system.

For example we better understand how incentives work when we account for the automatic effects of loss aversion alongside the more considered weighing of costs and benefits.

Question 49

4.2 Describe factors that influence the weight we give to information (5)

Answer 49

1) Reactions we have to the source of that information and their perceived authority

2) Demographic and behavioural similarities between the expert and the recipient can improve the effectiveness of the intervention

3) Peer effects

4) Feelings we have for the messenger (may disregard advice from someone we dislike)

5) More rational and cognitive means (societal consensus, consistency across occasions)

Question 50

4.3 List the five main related insights from behavioural economics that impact the effectiveness of incentive design

Answer 50

1) Losses loom larger than gains

2) Reference points matter

3) We overweight small probabilities

4) We mentally allocate money into discrete bundles and are reluctant to move it between them

5) We live for today at the expense of tomorrow

Question 51

14.4 Outline five lessons for policy makers from what is understood about the influence of norms on behaviour

Answer 51

1) If the norm is desirable let people know about it

2) Relate the norm to your target audience as much as possible

3) Consider social networks

4) Norms may need reinforcing

5) be careful when dealing with norms

Question 52

4.5 Explain the impact of priming on decision making

Answer 52

Exposure to one stimulus influences exposure to another stimulus.

The size of food containers primes us for subsequent eating

Question 53

4.5 Explain the impact of affect on decision making

Answer 53

The act of experiencing an emotion is a powerful force in decision making.

Emotions are rapid and automatic so we can experience one before we know what we’re reacting to.

People in good moods make unrealistically optimistic judgements

Question 54

4.5 Explain the impact of Ego on decision making

Answer 54

We tend to behave in a way that supports the impression of a positive and self consistent image

For example sports fans consistently misremember their teams behaviour in a better light as that aligns with their own positive self image.

Question 55

4.5 Explain how the desire to be consistent is used in marketing

Answer 55

This is used in foot in the door marketing which asks people to comply with a small request (such as a survey) which leads to them complying with a larger request (purchase of a product)

Question 56

4.5 describe the impact of expectations on preformance

Answer 56

the higher the expectations the better the performance, and the same in reverse

Question 57

5.1 Explain the intent (1 point) and intervention domains (4) of the 4Ps framework for behaviour

Answer 57

The 4Ps framework incorporates many behavioural levers that can be employed to support the healthy intentions of others

1) Process interventions: how choices are made

2) Persuasion interventions: How choices are communicated

3) Possibilities interventions: What choices are offered

4) Person interventions: How choices are reinforced

Together the framework provides comprehensive suggestions for engineering the environment to make healthy choices the easy choices

Question 58

5.2 Explain how process interventions can influence healthy behaviour (3 points from 4Ps)

Answer 58

1) Order - sequence has a strong impact on preferences and choices (1st candidate on the ballot gains a 3.5% advantage)

2) Defaults - defaults are extremely effective when people don’t have already established preferences

3) Accessibility - we tend to choose what is easy - we eat more fruit when it’s in a bowl on the counter

Question 59

5.3 Give three forms of persuasion interventions that can influence healthy behaviour

Answer 59

1) Vividness - triggering emotions such as delight or disgust can help the gut instinct be the right one. Adding vivid adjectives helps (“succulent” or “homemade”). People eat more when portions are labeled “small”

2) Comparisons (1 snickers bar = 20 min run) Standards can increase goal compliance by making progress measurable

3) Moments of truth - time and place where people are most receptive. stair prompts with messages such as “Burn calories, not electricity” have been found to be highly effective, increasing stair use by as much as 40%, even nine months later.

Question 60

5.4 List 3 Possibilities interventions that can influence behaviour

Answer 60

1) Assortment - One study found that people are more likely to choose a healthy option from a larger assortment than a small one. Variety is a powerful stimulant to consumption even when the variety is only in colour

2) Bundling - healthy options can be paired strategically with unhealthy ones (eg bundling a portion of salad with a smaller portion of fries or audiobooks with gym workouts)

3) Quantity - we tend to believe the appropriate amount to consume is the entire portion and eat more when dishes are large. So smaller dishes lead to smaller portions

Question 61

5.5 List 3 types of Person intervention and discuss why it is so powerul

Answer 61

1) Goals - setting explicit goals increases healthy choices

2) Pre-commitment - willpower s a depletable resource - if you believe it is. When we make decisions for the distant future we stick to them better.

3) Habits - automatic behaviours are ideal as they don’t take mental resources

It is only through the person, however, that behaviour can potentially be influenced across contexts over time and across multiple locations. The person intervention is the most challenging lever of change.