At How To: An Evening with Dan Ariely, the author of Predictably Irrational and The Upside of Irrationality spoke
about his latest research and was interviewed by Matthew Taylor. He discussed the psychology of money at length,
and touched on dishonesty, following his recent book The Honest Truth About Dishonesty.
AN EVENING WITH DAN ARIELY
In one of his experiments, participants were asked to roll a dice and were paid
according to the side it landed on. However, before the dice was rolled, they
were asked to choose whether they would take the number from the top or the
bottom, and keep this decision to themselves. Once the dice had been rolled and
they could see which side it had landed on, they stated whether they had chosen
top or bottom – therefore giving them the opportunity to lie and take the higher
amount. Participants consistently showed the same pattern of dishonesty: They
would lie sporadically at first, before what Ariely terms the ‘what the hell’ effect,
where they would start to lie constantly. You may recognise this effect in your
own life – after indulging in something unhealthy, for example, and subsequently
bingeing on unhealthy food after thinking, “What the hell!”
More intriguingly still, Ariely discussed the role of confession in resetting this
effect. Participants were asked to admit what they had done and apologise, and
immediately afterwards showed a reversal in their behaviour, returning to the
original levels of occasional dishonesty. This resetting is also known as the
“fresh start” effect and is easily recognisable in our New Year’s resolutions, which
we continue to make each year despite the tragic 10% success rate. Of course
the best example of this is Catholic confession, where people confess their sins
to a priest, perform their punishment and are able to start afresh. The Dutch
Banking Association has also cottoned on to this, requiring by law that staff of
financial institutions swear an oath to behave according to the code of ethics.
Ariely, D. (2013). The Honest Truth About Dishonesty: How We Lie to Everyone – Especially Ourselves. HarperCollins: New York.
The Goal-Gradient Effect
The goal-gradient effect, originally described by Hull (1932), is
a bias in humans whereby the closer we get to a goal the
more motivated we become to reach it. This bias can be used
by businesses to incentivise and motivate their consumers to
engage in a desired behaviour.
For example, Kivetz, Urminsky & Zhang (2006) gave out two
types of loyalty cards (Card A, Card B) at a café where
customers received a stamp for every coffee they bought.
Both loyalty cards rewarded customers with a free coffee
when they obtained ten stamps, but customers who received
card A completed it on average five days earlier than those
who received card B. This is because the first loyalty card
utilised the goal-gradient effect: Twelve stamps were required
before the reward of a free coffee, but the first two spaces had
already been stamped for free. This brought consumers
perceptually closer to the goal of completing the card and
thereby motivated them to do so, more than those with Card B
who simply needed ten stamps.
BIAS OF THE MONTH
Hull, C. L. (1932). The goal-gradient hypothesis and maze learning. Psychological Review, 39 (1), 25.
Kivetz, R., Urminsky, O., & Zheng, Y. (2006). The goal-gradient hypothesis resurrected: Purchase acceleration, illusionary goal progress, and customer
retention. Journal of Marketing Research, 43 (1), 39-58.
Dr Dan Lockton took to the stage at Nudgestock 2 to make the case for behavioural design. He maintained that
design is about helping people solve their problems better, rather than seeing people as ‘the problem’ in the first
We’ve identified an innovative new product that embraces this concept: PullClean from the “Agency of Design”.
Research has shown that 1 in 25 patients in U.S. hospitals obtain an infection during their stay in hospital (Centre for
Disease Control and Prevention) and the existing range of hand sanitizer bottles and wall mounted dispensers have
proved ineffective. Staff simply forget to use them; so what’s the solution?
DESIGNING WITH PEOPLE IN MIND
PullClean is a simple column that can be fitted on any pull door; it has a blue
paddle on the bottom that dispenses a dab of hand sanitizer when pushed.
The main insight of PullClean is that it combines the behaviour of sanitizing
with a behaviour hospital workers do every day, opening doors. It is designed
so people use it automatically; they default to pulling the door and dispenser
in one simple motion. The paddle itself was behaviourally designed to include
subconscious cues to get passers-by to push it; tapered slightly outwards so
it stands out and bent slightly forwards to invite passers-by to flatten it.
The most recent clinical trial of a similar product to PullClean increased
sanitation compliance from 24% to 77% amongst hospital staff. It goes to
show that by building on a previous behaviour, making the product salient
and using clever design to entice people to push the paddle dramatic results
are achievable. It wouldn’t have been possible if it wasn’t designed with
people in mind.
Babiarz, L. S., Savoie, B., McGuire, M., McConnell, L., & Nagy, P. (2014). Hand sanitizer-dispensing door handles increase hand hygiene compliance: A pilot
study. American Journal of Infection Control, 42 (4), 443-445.
Following the recent death of Nobel Prize winning economist Gary Becker, we are re-examining his paper on the
economics of marriage, a brilliant piece of work not least for its use of inverted commas when discussing people
marrying for “love”. Written in 1974, this precedes the revolution of incorporating human irrationality into economics,
and instead suggests that choice of marriage partner is a logical decision based on weighing up the costs and
THE ECONOMICS OF MARRIAGE
The economic model of marriage rests on two assumptions: Firstly, as marriage
is (almost) always voluntary, it can be expected that people marrying are doing
so to increase their utility relative to its expected levels if they were to remain
single. Secondly, a market in marriages can be said to exist, given that males
and females compete to find the best mate. This market is assumed to be at
equilibrium; in other words, no one could change their mate and become better
off. One’s economic gain from marriage is based on combined income, relative
difference in wages and the level of ‘nonmarket productivity augmenting
variables’, also known as factors like intelligence, education and beauty. Becker
also elegantly explains the prevalence of monogamous marriages as they are the
most efficient, due to the diminishing marginal returns of each person added to
the household after the first two.
Luckily for those of you not yet experiencing the gains of marriage,
mathematicians have also devised the optimal strategy for selecting the perfect
mate when choosing from a fixed number of options, the solution to the so-called
Marriage Problem. Make a list of all of your potential suitors, and date – but do
not marry one of – the first 36.8% of them. Then continue through your list until
you find the first person who is better than the very best of the first group. This is
apparently the most efficient way to find your perfect match, unless you meet the
very best person in the first third – but you can still marry second best from the
remaining 63.2%. You are welcome.
Becker, G.S. (1974). A Theory of Marriage. In T.W. Schultz (Ed.) Economics of the Family: Marriage, Children and Human Capital (pp. 299-351). University of Chicago
Press: Chicago, Illinois.
Throughout our life we develop a self-concept, an understanding and belief of the type of person we perceive
ourselves to be. Due to our consistency bias, once this self-concept has been developed, we work hard to maintain
it. One character trait that exists as part of most people’s self-concept is honesty. Although we work hard to
maintain a consistent sense of self, such as being an honest person, there are instances in which we behave in a
Three experiments showed that making one’s ‘honest’ self-concept more salient before filling out these forms
increases people’s level of honesty. Across three different forms (a tax form, a travel expense form and a mileage
report for car insurance) people were asked to sign at the top or bottom of the form. Results consistently showed
that those who signed the form at the beginning gave the most honest answers, while the group who signed the form
at the end were significantly less honest in all three experiments, even when compared to the control group who did
not sign the form at all. This is a worrying finding as nearly every self-reported form from insurance companies,
governments and businesses require a signature at the end, suggesting that millions of pounds are not being
claimed by these companies. In court cases, witnesses declare their pledge to honesty before giving their
testimonies - perhaps for a reason. Companies, take note!
ARE YOU BEING HONEST?
EDITORS’ PICK OF NUDGESTOCK 2
One instance of this contradiction is when it is financially beneficial to be dishonest.
The annual tax gap between ‘actual’ and ‘claimed’ taxes in the U.S. is a great example
of this, with the gap itself reported to be as much as $345 billion annually, and an
estimated half of this amount being due to people misrepresenting their income and
deductions. One explanation for people engaging in this type of dishonest behaviour is
that when people fill out self-report forms inquiring about their finances, they are not
asked to sign to confirm that all the information provided is honest until the end.
Therefore, it is not until after they commit their ‘sins’ that their self-concept of honesty is
made salient. And, once exposed, it is hypothesised that people post-rationalise and
engage in various mental justifications and reinterpretations about their moral
standards, which enables them to maintain a positive self-image despite having lied.
Shu, L. L., Mazar, N., Gino, F., Ariely, D., & Bazerman, M. H. (2012). Signing at the beginning makes ethics salient and decreases dishonest self-reports in comparison
to signing at the end. Proceedings of the National Academy of Sciences, 109 (38), 15197-15200.
Spotted: Social Norms in Bristol
We are herd animals and like doing what others are doing,
particularly people who are similar to us. Our visiting colleague Sam
from the Ogilvy office in Sydney came across a subtle social norm
on his recent trip to Bristol. With the goal of trying to boycott Tesco,
locals painted a sign that said “93% of local people say no to
Tesco”. The reason that this sign should work is not only does it
state that most people say no to Tesco, but that most “local people”
say no, and therefore most people like you!
REAL LIFE NUDGE OF THE MONTH
London Behavioural Economics Network Monthly Drinks
Tuesday 8th July, 7.30-10.00pm
Behavioural Decision Research in Management: London Business School
Wednesday 16th – Saturday 19th July
Measuring Behavior Conference 2014
Wednesday 27th – Friday 29th August
WERE YOU THERE?
Our annual behavioural science festival in Deal featured twelve of the most influential academics and
practitioners in the field, including our keynote Professor Armand Leroi, to discuss how the theories of
psychology and behavioural economics can be translated into action to produce real behaviour change.
See the summary here. Watch the videos here.
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