Minor - Week 6 Flashcards
Opt out system
Default is in; you need to opt out
opt in system
To choose to be in
Nudge definition
Alters people behavior in a predictable way without forbidding any options or changing financial incentives
- Not forbidding
- Not an incentive
- Choice architecture
- Making people better of as judged by their own (contrast marketing, goal revenue)
choice architecture
the way in which choices are designed in different ways choices can be presented to consumers, and the impact on decision making
- Different ways of choice presention
- Impact
Choice architects
Person, team or organization who is involved in designing choice architecture
- Design in a way that getting healthier and maximizing utility is the goal
Libertarianism
- Maximizing political freedom, autonomy and freedom of choice, individual judgement
- Skepticism on authority and state power
Paternalism
- Action that limits a persons or group liberty or autonomy and is intended to promote own good
- Limit persons autonomy to their own good; even is behavior is against individual self
Libertarian Paternalism
Paternalism; influence choices, that consumers are better off as judged by their self (promote own good)
Libertarian; people should be free to opt out of choices (autonomy)
Cons nudging
Could help choose when having
- Unlimited self- control
- Full information
- Cognitive capacities (not relying on hunger)
Nudging psychologists viewpoint
- Aimed at nonconsious thought processes (system 1)
- None of choices should be difficult to avoid
- Umbrella term for predictable and deliberate methods of changing people behavior - different types
nudges acronym, different types of nudges
Where should you provide choice architecture in?
- Incentives; shape behavior;
- Understand mappings;
- Defaults;
- Give feedback;
- Expect errors;
- Structure complex choices
nudges acronym, different types of nudges - Incentives
Shape behavior;
- taxi meter or electricity reports with neighbours
nudges acronym, different types of nudges - Understand mappings;
predict relation between choice and welfare
- (complex mappings; understandable information; side effects medicines
nudges acronym, different types of nudges - Defaults
option when you do nothing; opt in and opt out
- Make use of laziness people stick to defaults, because of loss aversion
- Forced choice better
nudges acronym, different types of nudges - Give feedback
- Feedback can itself change behavior
-Some choice architectures promote unhealthy behavior because no feedback is presen
nudges acronym, different types of nudges - Expect errors
- Should expect to make erros, as we are not rational decision makers
- Choice architecture provide fixing errors and use them painless
nudges acronym, different types of nudges - Structure complex choices
When the number of options and dimension increase decisions will choose based 1 criteria (non compensatory)
- Choice providing structured information
- Zorgkaart/ alphabetical order
MINDSPACE acronym
Choice architecture to influence people behavior change
- Messenger
- Incentives
- Norms
- Defaults
- salience
- Priming
- Affect
- Commitments
- Ego
MINDSPACE - Messenger
Who brings information
- Authority or expertise
- Similarity
- Peers
MINDSPACE - Incentives
Responses to avoid losses stronger
- reference points matter
- overweight small probaliliteies
- Mentally allocate money to bundles (healthy budgets at work) - protects us overspending
- Present bias
MINDSPACE - Norms
Let the diserable norm know
- Consider social networks
- Descriptive norms
- Strong norms more effective
- Undesirable norms carefull
Can backfire
- Reactance
- Boomerang
MINDSPACE - Defaults
Preset option - opt out
MINDSPACE - Salience
What attracts people; perceptual system
- attention drawn to what seems relevant
- Simple; visuals not too much information
- attractive; meaning and visability
- Novel (something on contrast)
MINDSPACE - Priming
Making use of sub-conscious cues in the environment
- Words
- Sights; association sight and behavior (MCD looks clean)
- Smells
MINDSPACE - Affect
Use of emotional Association to shape our actions
- Handwassing in Ghana;
MINDSPACE - Commitments
Consistent with public promises and reciprocate acts
- Commitment contracts
- Public commitments
- Reciprocity (committing to returning the favor)
MINDSPACE - Ego
We act in ways that makes us feel better of ourselves
- Protect ego
- Positive outcomes; associated with skills
- Negative outcomes; associated with things outside you
Use positive outcomes and feedback
Cons of surrounding nudging
- Long term?
- Transparency
- Desirability; do you want to be nudged (libertariasm)
- Heterogeneity; does it work for everyone?
4 arguments for nudging
- There is no thing such as no choice architecture or neutral design (always cues that will affect choice even is no-one designed it
- Preferable that the agent should design the choice architecture with best interest in mind
- Nudging is liberty preserving; Always reject behavior
- Nudges can be invisible, but no problem as they are willing to defend it to the public
2 main arguments against nudging
1) Nudging is manipulative – it is playing on our weaknesses, and works
best in the dark
2) Nudging is paternalistic, as we can not judge if we are making people better
off (as preferred by themselves)
Does nudging harm autonomy?
- Manipulation is hard to detect (goal of manipulator)
- People may consent to having their autonomy harmed
- May even promote autonomy (can help us reach goals, weight loss)
nudging manipulative?
- Use of unconscious thought process (playing around with the system)
- intentional perversion of thought processes; rational people would not make their decisions
When is nudging manipulative? Dimensions Hansen & Jespersen
- Type 1 or 2 system thinking - Reflective/ deliberate vs. automatic thinking
- transparency; can the recipient tell if the nudge is present or not
Manipulative if; system 1 and not transparent
Not better off as preferred by themselves
- True perference
- Or distorted preferences
What is Sugden’s main critique of nudging? - paternalistic viewpoint
Nudging assumes the choice architect knows what’s best, even if individuals consciously choose differently.
Key Points:
- Self-Licensing: People may feel they deserve a different choice.
- Mismatch: Nudged options might not align with personal preferences.
- Imposed Decisions: Nudging risks overriding conscious choices.
bounded rationality
Cognitive limitations; relying on heuristics to take decisions
Imperfect information; not all information
Time constraints; limited time to make decision
Try to be rational given these limits
boosting - Heuristics and biases
- Are good for quick decision making given contraints
- In contract to Kahneman, were there is nothing to do about this
Heuristics & Biases program
- People hardly educable
- experts also biased
- not much to do about this to become better decision makers
simple Heuristics & Biases program
- Often make good decisions by bounded rationality
- Because of heuristics and biases
Ecological rationality
Take in to account environment of individuals when decisions
- Depends on task and environment
- Rational decision used heuristics and simple decision rules
- Act fast and rational on incomplete information due to heuristics
modern environment and decisions
Sometimes our brain/decision-making tools are not adapted to the modern environment
- Change environment
- Change tools for decision making
Learn to make better decisions
Boosting
Intervention that targets people their decision making tools
- fostering existing competences or developing new ones for behavior
- Goal is autonomy, reason for development clear and deliberate use
- Targets competences
Nudges vs boosting
- behavior vs. competences
- Imperfect decision makers vs. bounded rationality and foster competences
- dual system vs. cognitive decision architecture
- intervention removed behavior old vs. effects should persist
- Long term vs. short term
- Might violate of autonomy and transparancy vs. Need to be transparent
- Local repair vs generalization repair
- Changes in external choice architecture vs. changes in competence (knowledge, skilss and decision tools) or external environment
example of boosting; numerical frequencies
Numerical frequencies; restructuring the way numerical examples used in your environment
- adresses asymmetric risk framing (relative and absolute increases)
- competence to put risks in perspective
- Choice architecture, decision tool of decision tree
- Boosts information to more cognitive system
Example boosting; fast and frugal decision trees
Decision trees to make better choice architecture
- competence to get more information in more time
- make use of availability heuristic
sunk costs fallacy
continue behavior as result of previously invested resources; if rational you should not care
planning fallacy
People are optimistic in planning; overestimate oppertunities in the future and underestimate obstacles in future
Why incentive can be a solution
- Introduced concrete, certain and immediate financial incentives for healthy behavior
Reward
a stimulus that is given to a person and serves to reinforce a
desired response or behavior
financial incentive
A reward offerd in monetary terms to encourage or motiviate individuals to behave in a certain way or achieve goals
commitment device
A tool for myself current to commit into my future self
Deposit contract
A monetary commitment contract with own money deposited as financial incentive
Carrot and sticks as financial incentive
Carrot; Rewards
- Effective
- maintenance effect low
Sticks
- Longer effect (loss aversion)
Deposit contract pro’s
Free to provide
Utilitizes loss aversion
Believing you are in charge of your own actions and results
Deposit contract cons
Low uptake
Vunerable groups (low income eg) participate en benefit)
Challenges when using behavioral insights in public policy
- conflicting goals: Autonomy vs maximum health gain
- time contraints in implementing behavioral insights
- Different ways of working; different ways of working
- Applying real word; not easy applying science in real life, every situation other, no time to cues view
Examples of challenges when using behavioral insights in public policy
- Smoking (intention behavior gap); used taxes
- Elderly care; no participation due to present bias
- vaccination; intention behavior gap (willingness); nudges in letter used
