Behaviour, and communication
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Not only is this a 'how to' change behaviour, but an architecture from social psychology to understand the (sometimes confusing) world of behavioural economics, and behavioural communication
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Behaviour, and communication
- 1. Behaviour, and communication 4th August 2012 Oliver Payne, founder, The Hunting Dynasty Author of ‘Inspiring Sustainable Behaviour: 19 ways to ask for change’ oliver@thehuntingdynasty.com | How, do you change behaviour?
- 2. What is common to us all? | How do you change behaviour?
- 3. | How do you change behaviour?
- 4. dark v roads | How do you change behaviour?
- 5. | How do you change behaviour?
- 6. | How do you change behaviour?
- 7. Norms (quasi-stationary Context equilibria) (situational influences) Construal (subjective influence) | How do you change behaviour?
- 8. Norms (quasi-stationary Context equilibria) (situational influences) Construal (subjective influence) | How do you change behaviour?
- 9. Norms (quasi-stationary Context equilibria) (situational influences) Construal (subjective influence) Decision-making is relative to what you can have, not absolutely about what you want. Your decision is affected by what’s on offer – to the point where the addition or subtraction of things you don’t want still affects your decision. | How do you change behaviour?
- 10. Norms (quasi-stationary Context equilibria) (situational influences) Construal (subjective influence) Decision-making is Shared relative to what understanding you can have, not about expectations absolutely about of behaviour within what you want. a group. We tend to conform to expectations even though we Your decision is affected by like to think of ourselves as what’s on offer – to the point making personal and where the addition or subtraction principled decisions. of things you don’t want still affects your decision. (Social, Injunctive, Descriptive . . . Provincial, Proscr/Pre, etc) | How do you change behaviour?
- 11. Norms (quasi-stationary Context equilibria) (situational influences) Construal (subjective influence) Decision-making is Shared relative to what understanding Where you think you can have, not about expectationsabout something absolutely about of behaviour withinrelative to yourself what you want. a group. affects what you We tend to conform to think about it expectations even though we Your decision is affected by like to think of ourselves as The closer – or more proximal – what’s on offer – to the point making personal and events are the more we think where the addition or subtraction principled decisions. about ‘actions’; the further away of things you don’t want still – or distal – events are the more affects your decision. (Social, Injunctive, Descriptive . we think ‘in theory’ .. Provincial, Proscr/Pre, etc) - Here/not here - Me/not me - Now/not now - Clear/Unclear | How do you change behaviour?
- 12. Norms (quasi-stationary Context equilibria) (situational influences) Construal (subjective influence) Decision-making is relative to what you can have, not absolutely about what you want. Your decision is affected by what’s on offer – to the point where the addition or subtraction of things you don’t want still affects your decision. | How do you change behaviour?
- 13. Context Rolls Royce were having problems selling cars in their regular showrooms. | How do you change behaviour?
- 14. Context So they sold them at Yacht fairs, Rolls Royce were having where the items on sale go for problems selling cars in their a few million rather than a few regular showrooms. hundred thousand. | How do you change behaviour?
- 15. Context So they sold them at Yacht fairs, Rolls Royce were having where the items on sale go for problems selling cars in their a few million rather than a few regular showrooms. hundred thousand. (I've saved £8m not buying that yacht… what's £350k for a lovely car?!) | How do you change behaviour?
- 16. Context Huber & Puto beer choice experiement ‘Market boundaries and product choice’ 1983 | How do you change behaviour?
- 17. $1.80 $2.60 Context 30% 70% | How do you change behaviour?
- 18. $1.80 $2.60 $1.60 Context 30% 70% | How do you change behaviour?
- 19. $1.80 $2.60 $1.60 Context 0% 50% 50% | How do you change behaviour?
- 20. $1.80 $2.60 Context 30% 70% | How do you change behaviour?
- 21. $1.80 $2.60 $3.40 Context 30% 70% | How do you change behaviour?
- 22. $1.80 $2.60 $3.40 Context 10% 0% 90% | How do you change behaviour?
- 23. $1.80 $2.60 $3.40 $1.60 Context Huber & Puto beer choice experiement ‘Market boundaries and product choice’ 1983 0% 10% 30% 70% Who are we? | How do you change behaviour?
- 24. Norms (quasi-stationary Context equilibria) (situational influences) Construal (subjective influence) Decision-making is relative to what you can have, not absolutely about what you want. Your decision is affected by what’s on offer – to the point where the addition or subtraction of things you don’t want still affects your decision. | How do you change behaviour?
- 25. Norms (quasi-stationary Context equilibria) (situational influences) Construal (subjective influence) Shared understanding about expectations of behaviour within a group. We tend to conform to expectations even though we like to think of ourselves as making personal and principled decisions. (Social, Injunctive, Descriptive . . . Provincial, Proscr/Pre, etc) | How do you change behaviour?
- 26. Norms In Australia, tax-payers were informed that normal practice was honesty in tax returns HEADS, YOU DIE: Bad decisions, choice architecture, and how to mitigate predictable irrationality | Jack Fuller | Per Capita research | How do you change behaviour?behaviour? create sustainable
- 27. Norms The discrepancy between the average behaviour of people and the perceived behaviour of the average person can be pretty wide. Deductions plunged by 47% (675,000,000 Aus$ extra revenue) HEADS, YOU DIE: Bad decisions, choice architecture, and how to mitigate predictable irrationality | Jack Fuller | Per Capita research | How do you change behaviour?behaviour? create sustainable
- 28. Norms Yes! 50 secrets from the science of persuasion | Goldstein, Martin, Cialdini | 2007 | pp20 | How do you change behaviour?
- 29. Norms People steal bits of wood from Arizona’s Petrified Forest National Park. Many past visitors have Please don’t remove the removed petrified wood petrified wood from the Park, from the Park, changing [nothing] in order to preserve the natural state the natural state of the Petrified Forest of the Petrified Forest Signs were tested to stop the theft: Some more successful than others… Yes! 50 secrets from the science of persuasion | Goldstein, Martin, Cialdini | 2007 | pp20 | How do you change behaviour?
- 30. Norms People steal bits of wood from Arizona’s Petrified Forest National Park. Many past visitors have Please don’t remove the removed petrified wood petrified wood from the Park, from the Park, changing [nothing] in order to preserve the natural state the natural state of the Petrified Forest of the Petrified Forest 8% theft Yes! 50 secrets from the science of persuasion | Goldstein, Martin, Cialdini | 2007 | pp20 | How do you change behaviour?
- 31. Norms People steal bits of wood from Arizona’s Petrified Forest National Park. Many past visitors have Please don’t remove the removed petrified wood petrified wood from the Park, from the Park, changing [nothing] in order to preserve the natural state the natural state of the Petrified Forest of the Petrified Forest 8% theft 3% theft Yes! 50 secrets from the science of persuasion | Goldstein, Martin, Cialdini | 2007 | pp20 | How do you change behaviour?
- 32. Norms People steal bits of wood from Arizona’s Petrified Forest National Park. Many past visitors have Please don’t remove the removed petrified wood petrified wood from the Park, from the Park, changing [nothing] in order to preserve the natural state the natural state of the Petrified Forest of the Petrified Forest 8% theft 3% theft 1.7% theft Yes! 50 secrets from the science of persuasion | Goldstein, Martin, Cialdini | 2007 | pp20 | How do you change behaviour?
- 33. Norms People steal bits of wood from Arizona’s Petrified Forest National Park. Many past visitors have Please don’t remove the removed petrified wood petrified wood from the Park, from the Park, changing [nothing] in order to preserve the natural state the natural state of the Petrified Forest of the Petrified Forest 8% theft 3% theft 1.7% theft “…a message that focuses recipients on the injunctive norm will be superior to messages that focus recipients on the descriptive norm.” (Cialdini et al., 2003) Yes! 50 secrets from the science of persuasion | Goldstein, Martin, Cialdini | 2007 | pp20 | How do you change behaviour?
- 34. Norms (quasi-stationary Context equilibria) (situational influences) Construal (subjective influence) Shared understanding about expectations of behaviour within a group. We tend to conform to expectations even though we like to think of ourselves as making personal and principled decisions. (Social, Injunctive, Descriptive . . . Provincial, Proscr/Pre, etc) | How do you change behaviour?
- 35. Norms (quasi-stationary Context equilibria) (situational influences) Construal (subjective influence) Where you think about something relative to yourself affects what you think about it The closer – or more proximal – events are the more we think about ‘actions’; the further away – or distal – events are the more we think ‘in theory’ - Here/not here - Me/not me - Now/not now - Clear/Unclear | How do you change behaviour?
- 36. US hybrid sales 2000 –’ 06 Temporal discounting (3,000 to 250,000) 1 1 Sales tax incentive: $1k $1,000 $2,000 Kick-back Kick-back | How do you change behaviour?
- 37. US hybrid sales 2000 –’ 06 Temporal (3,000 to 250,000) discounting 1 1 Sales tax incentive: $1k $1,000 $2,000 Sales tax discount Income tax rebate | How do you change behaviour?
- 38. US hybrid sales 2000 –’ 06 Temporal (3,000 to 250,000) discounting 1 1 Sales tax incentive: $1k $1,000 $2,000 Sales tax discount Income tax rebate Now Not now | How do you change behaviour?
- 39. US hybrid sales 2000 –’ 06 Temporal discounting (3,000 to 250,000) 7 6 5 3 4 1 2 1 $1,000 $2,000 Sales tax discount Income tax rebate Now Not now The tendency for people to have excessively stronger preferences for immediate gains relative to future gains. | How do you change behaviour?
- 40. Norms (quasi-stationary Context equilibria) (situational influences) Construal (subjective influence) Decision-making is Shared relative to what understanding Where you think you can have, not about expectationsabout something absolutely about of behaviour withinrelative to yourself what you want. a group. affects what you We tend to conform to think about it expectations even though we Your decision is affected by like to think of ourselves as The closer – or more proximal – what’s on offer – to the point making personal and events are the more we think where the addition or subtraction principled decisions. about ‘actions’; the further away of things you don’t want still – or distal – events are the more affects your decision. (Social, Injunctive, Descriptive . we think ‘in theory’ .. Provincial, Proscr/Pre, etc) - Here/not here - Me/not me - Now/not now - Clear/Unclear | How do you change behaviour?
- 41. “Just as no building lacks an architecture, so no choice lacks a context.” Dr. Robert Cialdini, ex-Regents' Professor of Psychology and Marketing Arizona State University | How do you change behaviour?
- 42. Thank you | How do you change behaviour?
Editor's Notes
- Anthropologically speaking, we’ve developed lots of rules of thumb and schematic about the world around us in order to reduce the burned of cognitive load for day-to-day tasks liberating us to focus on advantage and survival. However, the last few hundred years of development have placed us in a world we no longer recognise: We jump a mile at snakes [show snake], but are ambivalent about electricity cable [show cable (ref: Pinker)]
- Deal with hits developed lots of rules of thumb (and they are in system 1 – we get the answers for ‘free’ so we can think about protecting ourselves from lions, tigers, and strange monks lurking in the woods) [shot from In The Name Of The Rose]
- There are so many decisions to make in life, those that are made for us a often welcomed. “ Defaults work best when decision makers are too indifferent, confused, or conflicted to consider their options. That principle is particularly relevant in a world that’s increasingly awash with choices https://www.mckinseyquarterly.com/A_marketers_guide_to_behavioral_economics_2536
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.
- Huber and Puto recruited over one hundred respondents and gave them a simple hypothetical choice: would you buy a beer that’s $1.80 with a quality ‘score’ of 50/100, or a beer that’s $2.60 with a quality ‘score’ of 70/100? Pay more, get better. Simple. The choice saw 30% choosing the $1.80 beer, and 70% wanting the quality beer. (They obviously like the posh stuff.) But here come the additions. A low-quality ‘decoy’ at $1.60 with a 30/100 quality was added. No one chose it – not one. But it changed the desire for the original beers: With 0% wanting the $1.60 decoy, instead of a 30/70% split for the original beers it now shifted to a near 50/50% split. How odd. Rational actors in a rational world would not have changed their minds based on the addition of an unwanted outlier, and most choice models don’t allow for this. Does it work at the other end of the price spectrum? They tried a high-quality decoy at $3.40 with a quality of 75/100, and 10% chose it. Obviously (or so it seems), there were a few people for whom the original highest-price $2.60 choice was not high-quality enough. But the rest of the choice shift was phenomenal. With the addition of the $3.40 decoy (which 10% plumped for), absolutely no one wanted the original $1.80 beer – despite 30% originally preferring it – leaving 90% climbing up to the $2.60 option. So instead of a 30/70% split for the original beers it now shifted to a 0/90% split. The addition of options twisted the original choice: the decoy effect is powerful.
- Huber and Puto recruited over one hundred respondents and gave them a simple hypothetical choice: would you buy a beer that’s $1.80 with a quality ‘score’ of 50/100, or a beer that’s $2.60 with a quality ‘score’ of 70/100? Pay more, get better. Simple. The choice saw 30% choosing the $1.80 beer, and 70% wanting the quality beer. (They obviously like the posh stuff.) But here come the additions. A low-quality ‘decoy’ at $1.60 with a 30/100 quality was added. No one chose it – not one. But it changed the desire for the original beers: With 0% wanting the $1.60 decoy, instead of a 30/70% split for the original beers it now shifted to a near 50/50% split. How odd. Rational actors in a rational world would not have changed their minds based on the addition of an unwanted outlier, and most choice models don’t allow for this. Does it work at the other end of the price spectrum? They tried a high-quality decoy at $3.40 with a quality of 75/100, and 10% chose it. Obviously (or so it seems), there were a few people for whom the original highest-price $2.60 choice was not high-quality enough. But the rest of the choice shift was phenomenal. With the addition of the $3.40 decoy (which 10% plumped for), absolutely no one wanted the original $1.80 beer – despite 30% originally preferring it – leaving 90% climbing up to the $2.60 option. So instead of a 30/70% split for the original beers it now shifted to a 0/90% split. The addition of options twisted the original choice: the decoy effect is powerful.
- Huber and Puto recruited over one hundred respondents and gave them a simple hypothetical choice: would you buy a beer that’s $1.80 with a quality ‘score’ of 50/100, or a beer that’s $2.60 with a quality ‘score’ of 70/100? Pay more, get better. Simple. The choice saw 30% choosing the $1.80 beer, and 70% wanting the quality beer. (They obviously like the posh stuff.) But here come the additions. A low-quality ‘decoy’ at $1.60 with a 30/100 quality was added. No one chose it – not one. But it changed the desire for the original beers: With 0% wanting the $1.60 decoy, instead of a 30/70% split for the original beers it now shifted to a near 50/50% split. How odd. Rational actors in a rational world would not have changed their minds based on the addition of an unwanted outlier, and most choice models don’t allow for this. Does it work at the other end of the price spectrum? They tried a high-quality decoy at $3.40 with a quality of 75/100, and 10% chose it. Obviously (or so it seems), there were a few people for whom the original highest-price $2.60 choice was not high-quality enough. But the rest of the choice shift was phenomenal. With the addition of the $3.40 decoy (which 10% plumped for), absolutely no one wanted the original $1.80 beer – despite 30% originally preferring it – leaving 90% climbing up to the $2.60 option. So instead of a 30/70% split for the original beers it now shifted to a 0/90% split. The addition of options twisted the original choice: the decoy effect is powerful.
- Huber and Puto recruited over one hundred respondents and gave them a simple hypothetical choice: would you buy a beer that’s $1.80 with a quality ‘score’ of 50/100, or a beer that’s $2.60 with a quality ‘score’ of 70/100? Pay more, get better. Simple. The choice saw 30% choosing the $1.80 beer, and 70% wanting the quality beer. (They obviously like the posh stuff.) But here come the additions. A low-quality ‘decoy’ at $1.60 with a 30/100 quality was added. No one chose it – not one. But it changed the desire for the original beers: With 0% wanting the $1.60 decoy, instead of a 30/70% split for the original beers it now shifted to a near 50/50% split. How odd. Rational actors in a rational world would not have changed their minds based on the addition of an unwanted outlier, and most choice models don’t allow for this. Does it work at the other end of the price spectrum? They tried a high-quality decoy at $3.40 with a quality of 75/100, and 10% chose it. Obviously (or so it seems), there were a few people for whom the original highest-price $2.60 choice was not high-quality enough. But the rest of the choice shift was phenomenal. With the addition of the $3.40 decoy (which 10% plumped for), absolutely no one wanted the original $1.80 beer – despite 30% originally preferring it – leaving 90% climbing up to the $2.60 option. So instead of a 30/70% split for the original beers it now shifted to a 0/90% split. The addition of options twisted the original choice: the decoy effect is powerful.
- Huber and Puto recruited over one hundred respondents and gave them a simple hypothetical choice: would you buy a beer that’s $1.80 with a quality ‘score’ of 50/100, or a beer that’s $2.60 with a quality ‘score’ of 70/100? Pay more, get better. Simple. The choice saw 30% choosing the $1.80 beer, and 70% wanting the quality beer. (They obviously like the posh stuff.) But here come the additions. A low-quality ‘decoy’ at $1.60 with a 30/100 quality was added. No one chose it – not one. But it changed the desire for the original beers: With 0% wanting the $1.60 decoy, instead of a 30/70% split for the original beers it now shifted to a near 50/50% split. How odd. Rational actors in a rational world would not have changed their minds based on the addition of an unwanted outlier, and most choice models don’t allow for this. Does it work at the other end of the price spectrum? They tried a high-quality decoy at $3.40 with a quality of 75/100, and 10% chose it. Obviously (or so it seems), there were a few people for whom the original highest-price $2.60 choice was not high-quality enough. But the rest of the choice shift was phenomenal. With the addition of the $3.40 decoy (which 10% plumped for), absolutely no one wanted the original $1.80 beer – despite 30% originally preferring it – leaving 90% climbing up to the $2.60 option. So instead of a 30/70% split for the original beers it now shifted to a 0/90% split. The addition of options twisted the original choice: the decoy effect is powerful.
- Huber and Puto recruited over one hundred respondents and gave them a simple hypothetical choice: would you buy a beer that’s $1.80 with a quality ‘score’ of 50/100, or a beer that’s $2.60 with a quality ‘score’ of 70/100? Pay more, get better. Simple. The choice saw 30% choosing the $1.80 beer, and 70% wanting the quality beer. (They obviously like the posh stuff.) But here come the additions. A low-quality ‘decoy’ at $1.60 with a 30/100 quality was added. No one chose it – not one. But it changed the desire for the original beers: With 0% wanting the $1.60 decoy, instead of a 30/70% split for the original beers it now shifted to a near 50/50% split. How odd. Rational actors in a rational world would not have changed their minds based on the addition of an unwanted outlier, and most choice models don’t allow for this. Does it work at the other end of the price spectrum? They tried a high-quality decoy at $3.40 with a quality of 75/100, and 10% chose it. Obviously (or so it seems), there were a few people for whom the original highest-price $2.60 choice was not high-quality enough. But the rest of the choice shift was phenomenal. With the addition of the $3.40 decoy (which 10% plumped for), absolutely no one wanted the original $1.80 beer – despite 30% originally preferring it – leaving 90% climbing up to the $2.60 option. So instead of a 30/70% split for the original beers it now shifted to a 0/90% split. The addition of options twisted the original choice: the decoy effect is powerful.
- Huber and Puto recruited over one hundred respondents and gave them a simple hypothetical choice: would you buy a beer that’s $1.80 with a quality ‘score’ of 50/100, or a beer that’s $2.60 with a quality ‘score’ of 70/100? Pay more, get better. Simple. The choice saw 30% choosing the $1.80 beer, and 70% wanting the quality beer. (They obviously like the posh stuff.) But here come the additions. A low-quality ‘decoy’ at $1.60 with a 30/100 quality was added. No one chose it – not one. But it changed the desire for the original beers: With 0% wanting the $1.60 decoy, instead of a 30/70% split for the original beers it now shifted to a near 50/50% split. How odd. Rational actors in a rational world would not have changed their minds based on the addition of an unwanted outlier, and most choice models don’t allow for this. Does it work at the other end of the price spectrum? They tried a high-quality decoy at $3.40 with a quality of 75/100, and 10% chose it. Obviously (or so it seems), there were a few people for whom the original highest-price $2.60 choice was not high-quality enough. But the rest of the choice shift was phenomenal. With the addition of the $3.40 decoy (which 10% plumped for), absolutely no one wanted the original $1.80 beer – despite 30% originally preferring it – leaving 90% climbing up to the $2.60 option. So instead of a 30/70% split for the original beers it now shifted to a 0/90% split. The addition of options twisted the original choice: the decoy effect is powerful.
- Huber and Puto recruited over one hundred respondents and gave them a simple hypothetical choice: would you buy a beer that’s $1.80 with a quality ‘score’ of 50/100, or a beer that’s $2.60 with a quality ‘score’ of 70/100? Pay more, get better. Simple. The choice saw 30% choosing the $1.80 beer, and 70% wanting the quality beer. (They obviously like the posh stuff.) But here come the additions. A low-quality ‘decoy’ at $1.60 with a 30/100 quality was added. No one chose it – not one. But it changed the desire for the original beers: With 0% wanting the $1.60 decoy, instead of a 30/70% split for the original beers it now shifted to a near 50/50% split. How odd. Rational actors in a rational world would not have changed their minds based on the addition of an unwanted outlier, and most choice models don’t allow for this. Does it work at the other end of the price spectrum? They tried a high-quality decoy at $3.40 with a quality of 75/100, and 10% chose it. Obviously (or so it seems), there were a few people for whom the original highest-price $2.60 choice was not high-quality enough. But the rest of the choice shift was phenomenal. With the addition of the $3.40 decoy (which 10% plumped for), absolutely no one wanted the original $1.80 beer – despite 30% originally preferring it – leaving 90% climbing up to the $2.60 option. So instead of a 30/70% split for the original beers it now shifted to a 0/90% split. The addition of options twisted the original choice: the decoy effect is powerful.
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.
- We know that decisions about brands – the decisions we aim to influence – are complex. They involve not only direct utility (a car that will take you from A to B) and opportunity cost (what else could the same money buy?), but also status (what does this car say about me?), concern with the needs of others (who else will use the car, and for what purposes? And what would this car say about them?), social concerns (should I drive less or get a hybrid?), fashion (who does buy yellow cars?), and many other issues and concerns. NOTES: Gas prices aren’t the only reason for more hybrid sales http://nudges.wordpress.com/gas-prices-arent-the-only-reason-for-more-hybrid-sales/ http://www.thehuntingdynasty.com/2010/01/death-and-taxes-why-your-decisions-kill-you-and-cost-you-money/ Gas prices aren’t the only reason for more hybrid sales | Nudge blog
- We know that decisions about brands – the decisions we aim to influence – are complex. They involve not only direct utility (a car that will take you from A to B) and opportunity cost (what else could the same money buy?), but also status (what does this car say about me?), concern with the needs of others (who else will use the car, and for what purposes? And what would this car say about them?), social concerns (should I drive less or get a hybrid?), fashion (who does buy yellow cars?), and many other issues and concerns. NOTES: Gas prices aren’t the only reason for more hybrid sales http://nudges.wordpress.com/gas-prices-arent-the-only-reason-for-more-hybrid-sales/ http://www.thehuntingdynasty.com/2010/01/death-and-taxes-why-your-decisions-kill-you-and-cost-you-money/ Gas prices aren’t the only reason for more hybrid sales | Nudge blog
- We know that decisions about brands – the decisions we aim to influence – are complex. They involve not only direct utility (a car that will take you from A to B) and opportunity cost (what else could the same money buy?), but also status (what does this car say about me?), concern with the needs of others (who else will use the car, and for what purposes? And what would this car say about them?), social concerns (should I drive less or get a hybrid?), fashion (who does buy yellow cars?), and many other issues and concerns. NOTES: Gas prices aren’t the only reason for more hybrid sales http://nudges.wordpress.com/gas-prices-arent-the-only-reason-for-more-hybrid-sales/ http://www.thehuntingdynasty.com/2010/01/death-and-taxes-why-your-decisions-kill-you-and-cost-you-money/ Gas prices aren’t the only reason for more hybrid sales | Nudge blog
- ” In Israel – one of the first countries to sign a zero-emissions agreement with the Renault-Nissan Alliance – the government cut the purchase tax for new vehicles from 80% to 10% for all-electric vehicles.” We know that decisions about brands – the decisions we aim to influence – are complex. They involve not only direct utility (a car that will take you from A to B) and opportunity cost (what else could the same money buy?), but also status (what does this car say about me?), concern with the needs of others (who else will use the car, and for what purposes? And what would this car say about them?), social concerns (should I drive less or get a hybrid?), fashion (who does buy yellow cars?), and many other issues and concerns. NOTES: Gas prices aren’t the only reason for more hybrid sales http://nudges.wordpress.com/gas-prices-arent-the-only-reason-for-more-hybrid-sales/ http://www.thehuntingdynasty.com/2010/01/death-and-taxes-why-your-decisions-kill-you-and-cost-you-money/
- It’s quite a broad term. In fact, almost all the other effects described here can ‘frame’ a choice, and in so doing create different outcomes. In that sense, ‘framing’ tells us that what is said is less significant than how it’s said. In broad terms ‘choice architecture’ concerns itself with how people gather information, when they choose, and how absolute values are crowded out by other influences. The broad groups of effects are framing biases (e.g. the ‘availability’ heuristic, and ‘ anchoring effects’), where the grouping of choices influences final choice, and ordering effects (e.g. the ‘primacy’ effect and the ‘recency effect’), where relative order in the group creates bias. The whole area of Behavioural Economics dedicated to choice architecture is perhaps one of the richest seams for our industry, and the one which we believe we should make into a special subject for priority investigation of its potential applications. ■ We are all choice architects because there is no neutral way to present a choice. Presenting something first on a list can bias its choice (the ‘primacy’ effect), as can presenting it last (the ‘recency’ effect). This phenomenon is well known to the market research industry, who try to eliminate its affect by rotating stimulus. People tend to choose relative to what is available rather than to any absolute standard (this is known as the ‘availability’ heuristic). The way we frame choice is therefore fundamental to the decisions that we make. ■ We are all familiar with the experience of choosing the second-cheapest wine on the wine list. We are also familiar with never choosing the most expensive item on the menu. However, having one very expensive item on the menu can increase the average value of dishes ordered, even if the most expensive choice is rarely chosen.