Monday, November 28, 2011

Nudging traffic: How to save lives in a hurry

By Katrine Lund Skov & Andreas Maaløe

I’m a little late again. Driving a bit too fast, but what the hell, if that’s what it takes to avoid the bosses accusing glance of ‘you’re-late-again’ then it’s worth it right? Speeding just a little can’t be that dangerous anyway. Tomorrow I’ll get out of the door in time. I promise!

Habit and overconfidence on the road
How many of the 2381 persons that got injured or killed in traffic last year reasoned somewhat like the above before they got in their cars? Or the previous year, where that number was 2801. The good news is, that this year the number of accidents and fatalities has gone down by 500, so what happened? To answer that question we must first understand what caused the accidents. In a review from the Danish Road Safety Council, 75% of the interviewed speed offenders said it was due to a lack of attention from their part, because they were in a hurry or the thought that the road conditions invited faster driving.
If anything, our behaviour in traffic is mostly automatic, something we do everyday without thinking, a habit. The potential catastrophic consequences of bad driving are hard to imagine. In addition, it always happen to someone else – right? In behavioral economics this latter bias in judgement is known as the overconfidence effect. When you ask a class of students, usually 90% estimate that they will do better than the average on the final test.
Finally, and the only feedback we get from erroneous driving is when its too late.
Nudging for traffic safety
We can hardly argue that we don’t know the rules of the road, and with automatic behaviour, little feedback and abstract (but deadly) consequences, driving is in need of a nudge, where the trick is to make the drivers behaviour salient with driver feedback signs.
Credit to Jim Parkin
When feedback signs were erected on the Øresund Bridge the amount of drivers that exceeded the 40 km speed limit was cut in half, which significantly lowed the risk of accidents for the staff working there and for drivers themselves. Feedback signs remind us of our behaviour right there and then, which in turn forces the driver out of the automatic behaviour pattern – she can still speed with no economic sanction, but now the speeding becomes a choice instead of habit.

Individual salience is one thing, but perhaps more interesting (from a nudge perspective) is the trafficants desire to drive at the same pace as that of their peers. By informing drivers about other drivers actual speed, a significant impact can be made on how many drivers choose to adjust the speed they are travelling. Most drivers erroneously believe that everyone else is speeding – which in turn makes them speed themselves.
So – driver feedback signs coupled with strategic information about the behaviour of peers seem to be the way forward, and if you’re wondering about if it’s all worth it, just think of the 255 who could still have been alive this year if national speeding had been reduced to the same levels as those on the Øresunds Bridge.

Next post: Nudging traffic safety by visual illusions

Friday, November 25, 2011

Challenge: Happy Birthday nudge!

By Pelle Guldborg Hansen

I don't think that my sister have ever paid serious attention to anything I've said in my life.

Not until last Sunday at my niece's Birthday, that is.

The birthday nudge
My sister works with the Danish Cancer Society - the same organization (but different section) that we are working with through the Danish Nudging Network. Although I've once told her about nudging, I guess it's there that she has picked up some ideas.

Thus, last Sunday at my niece's Birthday party, my sister suddenly makes the announcement at the table that she has made a little nudge-experiment.

What nobody had noticed was that there were two different varieties of Birthday buns served in each their basket: one variety with sugar, one variety without. Ultimately nobody had noticed, and thus the result was that 50% less sugar was eaten, since pick of bread basket was more or less random (my sister switched bread baskets once in a while during the party).

Is it a nudge?
Whether this is a nudge depends on a few decisions. Thaler and Sunstein's definition of a nudge doesn't say explicitly whether adding a choice-option rules out a nudge. Thus one has to go to the background theory of behavioral economics to get it right. According to this, adding an option is a nudge if it influences real world behavior, but leaves the ideal agent of homo economicus unaffected.  

Ultimately, the Birthday buns manage the fundamental requirements. Adding a sugarless variety of buns left the standard singleton-choice of buns with sugar feasible. Also, there were no cost-benefit adjustment attached in any way to the intervention - not even of the social kind, since my sister didn't inform us about the addition of a new choice.

Rational Birthday party challenge
But the decisive question is: would an ideal agent be influenced by the addition of a choice?

Well, on the one hand he wouldn't have any information about the sugarless variety to begin with. That seems to leave a Birthday party of rational agents to end up with eating 50% less sugar given their imperfect information and the assumption that choice of bread basket is made at random.  

But is this the right baseline to compare observed effect with when evaluating whether the intervention ultimately qualifies as a nugde?

I want to pose this as a challenge to you readers out there: is the Birthday Bun Nudge, really a nugde?
I'll provide my answer later on. For now, I leave you with the following clues.

(1) Ideal decision makers have taste-buds just like everyone else, but they also have perfect recall.
(2) At the rational birthday party ideal decision makers have imperfect information, but are also capable of learning.
(3) People did not eat the same number of Birthday buns. Some ate 1, most ate 2 or 3, and a few ate 4.
(4) My sister was willing to answer any question honestly.

Wednesday, November 23, 2011

Nudging young people to a better economy

Press here to play

By Pelle Guldborg Hansen

This morning I appeared on the national news station TV2news in an interview about how to nudge young people to a better economy.

When I reach my lunch-break I'll write an English recap with references to the survey we're discussing, plus with reference to some of the interesting findings and claims that I mention.

Until then you may enjoy the interview... in Danish.

Tuesday, November 22, 2011

NudgeNews Nov. 22, 2011

By Pelle Guldborg Hansen

Everyday quite a few articles, blogs and papers on Nudge and related issues are made available online. NudgeNews is our way of trying to facilitate a better understanding of nudging by giving you access and an overview.

Nov. 22, 2011

Nudge politics: More on the disbandment of the British obesity panel
(nudge politics, obesity)

We have often warned about what happens if nudging becomes too entangled with politics. A press release from PR fire on the recent dispandment of the British obesity panel gives a good picture of what happens with rethoric about nudge, when it becomes possible to evaluate it as nudge politics. Even Jamie Oliver seems to have an opinion:
Coalition Turns It’s Back On Obesity
More on Chatterjee and the psychology of credit cards
On the CreditCardGuide Marcia Frellick picks up Charretjee's recent study about how just being primed about credit cards leads customers to be willing to spend more as well as over-evaluate the value of wanted goods. A nice feat of this post is that Frellick has asked Art Markman (Professor of Psychology and Marketing at the University of Texas at Austin) as well as Jill Norvilitis (professor of psychology at Buffalo State College in New York) for additional information:

Under the Influence of Credit, Shoppers Primed to Buy
That's all for today.

Monday, November 21, 2011

NudgeNews Nov. 21, 2011

By Pelle Guldborg Hansen

Everyday quite a few articles, blogs and papers on Nudge and related issues are made available online. NudgeNews is our way of trying to facilitate a better understanding of nudging by giving you access and an overview.

Nov. 21, 2011

Green nudges, Singapore, energy use. - Asia Pacific's sustainable business community reports on from Singapore International Energy Week, where a discussion of the role of behavioural economics in energy use was organised by the National University of Singapore’s Energy Studies Institute (ESI):

To save the earth, know human nature, (Nov 20, 2011)
Nudge, books, criticism.
Yesterday Farnham street reported on Steven Cave's piece in Financial Times from Nov. 18
Nudge thyself
Basically Nudge thyself is a book review of three books potrayed as alternatives to the Nudge-doctrine. Ultimately the book review isn't that encouraging, and Steven Cave ends by giving a criticism we recently saw in William Easterly's book review of Kahneman's Thinking, fast and slow, but which were later rejected by Leigh Caldwell in his
Does Nudge require regulators to be "more rational" than consumers?

Keeping to the book reviews Sander van der Linden reviews the long awaited Nudge, Nudge, Think, Think by Peter John et al. You may read the book review here:
Book Review: Nudge, Nudge, Think, Think: Experimenting with Ways to Change Civic Behaviour
That's all for today:)

Saturday, November 19, 2011

NudgeNews Nov. 20, 2011

By Pelle Guldborg Hansen

Everyday quite a few articles, blogs and papers on Nudge and related issues are made available online. NudgeNews is our way of trying to facilitate a better understanding of nudging by giving you access and an overview.

Nov. 20, 2011.

food, public health, obesity. The Atlantic reports on the UK Government decision to disband advisory group on obesity issues, picking up very well, how nudging easily may become a political smokescreen for inaction.   
UK Government Quietly Disbands Advisory Group on Obesity Issues
Interestingly the reporter also decides to refer the reader directly to a discussion in BMJ (good journalism is rare these days!). You may find them here:
Is nudge an effective public health strategy to tackle obesity? No by Geof Rayner, honorary research fellow, and Tim Lang, professor of food policy
Is nudge an effective public health strategy to tackle obesity? Yes by Adam Oliver, senior lecturer
growing your own nudge, foodFinally, we've decide to bring you this story by Tara Conolly about having school children grow their own vegetables, since it ecchoes and earlier post we had how to grow your own nudge :
Forks and Tracy Elementary Get New Outdoor 'Classrooms'

Friday, November 18, 2011

NudgeNews Nov. 18, 2011

Credit: Salvatore Vuono
By Pelle Guldborg Hansen

Everyday quite a few articles, blogs and papers on Nudge and related issues are made available online. NudgeNews is our way of trying to facilitate a better understanding of nudging by giving you access and an overview.

Nov. 18, 2011. 

Consumer, money, economy. report on how HM Revenue and Customs (HMRC) step up their Tax Health Plan using the social nudges.
CIOT: Doctors’ orders – HMRC issue final warning to 2500 health professionals

Consumer, money, economy, new research. Bob Sullivan reports on new research published in Journal of Consumer Research by Promothesh Chatterjee of the University of Kansas and Randall L. Rose or University of South Carolina suggesting that not only do credit cards make you use more money (the credit card premium), but it also makes you evaluate goods in a biased way. 

Using a credit card induces euphoria, new research shows

Sustainability, university, trashWhen University of Pittsburgh students weren’t recycling, student Jamie Kimmel designed some new labels to help people realize the consequences of their actions.

U Of Recycling: Creative Signage Gives A Nudge

Saturday, November 12, 2011

Why nudging is better than the fat tax and other tools of the trade

By Andreas Maaløe Jespersen & Pelle Guldborg Hansen

"We do not first see, then define,
we define first and then we see."

              - Walter Lippmann (cited in Plous 1993)

Taxation and regulation are the traditional tools of the trade in policy-making. Thus, we've just seen here in Denmark how policy-makers have tried to prevent people from eating unhealthy foods: the fat tax. 

But honestly, in the months that have past we are yet to actually observe someone saying "ooohh, my Danish pastry costs 9 cents more than a couple of months ago. I better cut down!" Is someone actually expecting this tax to change behavior? We doubt it, but let's play along.  

Tools of the trade
What the fat tax seems to confirm is the old saying: "If all you have is a hammer, everything looks like a nail." (and additionally: if everyone expect you to use a hammer, they'll accept it, no matter how stupid the idea). 

credit to africa
In our jurney outside of Academia we've started to learn that this not only holds true in research, but also in the worlds of policy-making, marketing and advertisement as well. Seeking to influence behavior, policy-makers readilly opt for taxation and regulation, doctores opt for medicine, intellectuals opt for talking and teaching, and the advertising and marketing industry opt for hillariously expensive campaigns featuring material or events with half-naked women or celebreties (and often cutting expenses by finding someone who is both). 

We've also been confirmed in our belief that when policy-makers learn that their attempts to influence behavior by taxation and regulation fails, or when they find these meaures to be too invasive, they have for a long time turned to the advertisement and marketing industry - perhaps because it seems to be the most fun alternative. 

Measuring success
Yet, how is success usually measured in these branches? Well, the success of a new tax often seems to be measured by the tax collected, talk and teaching by the number of people who listens, and advertisements by the number of people who remembers to have seen the half-naked celebrety. 

The most recent plague in this business seems to the success meassured by the number of people signing up to a facebook group, or the number of people that have clicked a video on youtube - after all, numbers are objective, right?

However, notice that none of these approaches actually measures behaviour change! 

Self-fulfilling prophecies
When the rare occassion do happen and impact is actually measured on behavior or parameters closely associated with this, the tools of the trade are often given a biased evaluation. When these tools are seen to work (even the slightest), it is usually taken to confirm that we are using the right tools, but when they don't, it is just taken to confirm that we have not applied them with enough force. In sum: raise the taxes, harsher punishment, more information, more education, and more... well, half-naked celebreties.

Depending on one's point of view, this may be seen as (1) a reaction to sunk costs based on loss-aversion, (2) a reaction to the cognitive dissonance arising from being wrong, while at the same time believing oneself to be flawless, or (3) confirmation bias.

However, the most interesting reaction are the rare occasion where the tools of the trade are recognized to fail. In these cases, the people responsible for the behavior targeted are blamed.  Had they just been super-rational economic beings - as we all would like to be - they would have reacted in the way intended and according to their own interests. They're to blame! Not us!

Readers of this blog will know that Nudge offers a different set of tools aimed at influencing the same behavior as usually targeted by the tools of the trade. However, it is important that we remember not to make the same mistake as the more "experienced players" in the game of behavioral change. 

Thus, it is important to remember that the nudge-doctrine is not a catch-all strategy that completely wipes out the need for more traditional policy measures (a). Nor does signs of success imply with necessity that we should always be restricted to keeping within the nudge-doctrine. There might be cases where stronger interventions are needed.
Instead Nudge should be seen as an addition to the already existing toolbox.

Still, the nudge-doctrine does possess one strict advantage over other tools of the trade. It expands the perception of what is constitutive of the behavior targeted and requires a good account of this behavior.

When we fail, we're to blame - not them.

Tuesday, November 8, 2011

NudgeNews Nov. 8, 2011

Credit: Salvatore Vuono
By Pelle Guldborg Hansen

Everyday quite a few articles, blogs and papers on Nudge and related issues are made available online. NudgeNews is our way of trying to facilitate a better understanding of nudging by giving you access and an overview.

Nov. 8, 2011. 
Writing for Forbes magazine, Michael Millenson reports from the annaual meeting of the Society of Medical Decision Making where the use of insights from behavioral economics on the medical marketplace were discussed in relation to ethical issues (published Nov. 7)
The Fine Line Between Shared and Manipulated Medical Decisions reports a study from Psychological Science "Leaning to the Left Makes the Eiffel Tower Seem Smaller: Posture-Modulated Thought" apparently showing that estimates are affected by you balance. On the great side, the study used a Wii-board to measure balance. On the bad side, I'm inclined to think that there may be some issues on the direction of causality - still, I'm looking forward to reading it.
Which Way You Lean—Physically—Affects Your Decision-Making

On his blog Kowing and Making - a blog about cognitive and behavioural economics - Leigh Caldwell discusses a criticism of Libertarian Paternalism pointing to an inconsistency of this doctrine. The criticism was originally published in the Wall Street Journal in a review of Kahneman's new book Thinking fast and slow. The review may be found in our post of posts. Leigh Caldwell's puts forward a series of a convincing counter-arguments - except for the last one he mentions. Read the post here:
Does Nudge require regulators to be "more rational" than consumers?

That was all for today.

Report no.1: ISSP Public Lecture w. Richard Thaler

By Pelle Guldborg Hansen, Andreas Maaløe Jespersen & Katrine Lund Skov

On October 21 the long anticipated ISSP Public Lecture 2011 was given by Richard Thaler at the Metropolitan University College in Copenhagen. 

More than 200 citizens, business representatives, academics, and policy makers had decided to use the Friday of the Danish one week "potato-holiday" to attend Prof. Thaler's lecture on Nudging.

The lecture
The lecture was arranged through the Danish Nudging Network in collaboration between ISSP, the Metropolitan University College, University of Southern Denmark, Trygfonden, the Danish Cancer Society, MindLab, DEA, and Aalborg University with the aim of giving anyone with an interest in our general 'health, wealth and happiness' a first hand encounter with the nudge-doctrine and one of its 'founding fathers'. The encounter became both intimate, deliberative and entertaining.

Throughout the lecture Prof. Thaler stayed close to the main tenets of the underlying book Nudge: Improving Decisions about Health, Wealth and Happiness (2008) thereby truly respecting the fact that the idea of nudging is new to most people in Denmark. As a result the audience got an impression of the original motives underlying the writing of the book as well as its core ideas.

The lecture covered several 'high-impact' examples of nudging such as schemes for private pension systems and sign up procedures for organ donation. But it also presented some concrete examples from the world of design, architecture, and law, such as badly designed stoves, school lunch rooms, and mobile calling plans.

Common to all of the various examples Prof. Thaler presented was that they each showed in one way or another, how accepting and respecting the psychology of human decision making in the way we arrange the details of the physical, social, and juridical structures that underpin our decisions and behavior may make a significant difference on society and our individual well-being.

Questions and answers
After 1½ hour the ISSP Lecture concluded with a relaxed Q&A. The questions reflected the broad variety of interest represented in the audience. "Will nudging make us less capable of handling choices in the future?"  and "What separates nudging from manipulation?" were some of the questions asked thereby showing that the ISSP Lecture served its purpose of allowing people first-hand interaction and engagement with Nudging and one of its founding fathers.

In the picture you can see Prof. Richard Thaler (sitting), Co-Director of ISSP Pelle Guldborg Hansen (standing), Anders Hede (Trygfonden, back to camera), Science Journalist Peter Hesseldahl (background to the right) Credit: Tobias Egmose

However, to find out what Prof. Thaler answered to these question you have wait a little while...

While waiting you might want to read about the perfect way to nudge yourself to freedom.