Summary of Nudge, presented to IxDA LA

an introduc+on to
Nudge
Improving Decisions About
Health, Wealth, and Happiness
by Richard H. Thaler & Cass R. Sunstein

presented by Sarah G. Mitchell

What I am presenting is only an introduction to this rich and in-depth book. If you’re
interested in what I cover here, I encourage you to read the book.

Both of the authors are economists and professors, and Cass Sunstein now leads the White
House Office of Information and Regulatory Affairs. In the book they focus on public policy,
and situations like healthcare, the environment, and saving for retirement, but many of the
concepts they cover have relevance to the kinds of situations and choices we design.

What is a nudge?

A nudge is any aspect of the design of a choice (“choice architecture”) that alters people’s
behavior in a predictable way, without forbidding anything or actually changing the choice at
all. The example that went out in the event invitation was the clever internet cafe named their
wireless network “Have you tried the carrot cake.”

Freedom of choice
is best, right?

Many economists (and some of the engineers I know) like to say that we don’t know better
than the user/chooser, that we should present all options to people, and let them choose.
The authors say this makes the false assumption that almost all people, almost all of the
time, make choices that are in their best interest, or at least are better than choices someone
else would make for them.

They are assuming that we are all like Spock. (Or maybe like a true Vulcan, since Spock is
actually half human, as we all know.) And like Spock we always only choose the most logical
choice.

However, while part of our mind really is like Spock, we all have TWO decision makers in our
head who battle it out for each decision - our Spock (in scientiﬁc terms, our Reﬂective
Cognitive System) and but also our Homer (Automatic Cognitive System).

vs.

“Gut” “Mind”
(Automa+c Cogni+ve System) (Reflec+ve Cogni+ve System)
They are assuming that we are all like Spock. (Or maybe like a true Vulcan, since Spock is
actually half human, as we all know.) And like Spock we always only choose the most logical
choice.

However, while part of our mind really is like Spock, we all have TWO decision makers in our
head who battle it out for each decision - our Spock (in scientific terms, our Reflective
Cognitive System) and but also our Homer (Automatic Cognitive System).

Here’s a classic example. Spock would look at this image and see clearly that the two
tabletops are exactly the same size. But most of us feel pretty sure that the one on the left is
longer and skinnier than the one on the right.

There is no such thing as
a nudge‐less choice.

So the conclusion the authors draw from this is that SOMETHING is always inﬂuencing your
choices. People are inﬂuenced by small factors in the design of an experience, so even if you
don’t consciously design your choice architecture, it is still there, affecting the actions of the
choosers.

• CAFETERIA LINE IMAGE

Here’s another example. In this cafeteria, Spock would only put food on his tray that is good
for him, only taking as much as he needs and only what he can afford.

But our Homer is in there, reacting instinctively to many things, like which things are at the
beginning versus the end, and which things are up at eye level and which are below.

In fact, in one study mentioned in the book, the researchers were able to increase or decrease
selection of speciﬁc foods by 25%, just by rearranging them.

So say you are designing a cafeteria layout. What should you do? Ignore the fact that the
layout affects what people buy? Randomly rotate the placement of foods? Set it up to sell the
most of the expensive stuff? Or set it up so people choose more healthy foods? The book
encourages that last option with what they call “libertarian paternalism” - Nudging the
user (through placement, in this example) to make the best choice for his well being - WHAT
OUR SPOCK WOULD WANT, while not restricting choice at all. They are not banning junk food,
just making it less likely that someone will choose it on their own.

When do we especially
need nudges?

When is our Spock particularly weak and our Homer particularly strong. This happens
predictably in the following scenarios:

When we see the beneﬁts
now, costs later.

I enjoy the beneﬁt of this donut now, I pay the cost (to my health, waistline) later. I enjoy
coming home to a cool house because my AC was running all day, I pay the costs (both bills
and environmental) later.

When encountering decisions
we make infrequently.

We get better at everything through practice. If you had to optimize your investments as
frequently you have to drive your car, you’d probably be better at it.

When feedback is not
immediate.

Think of the impact digital cameras had on hobby photography, largely because you can see
right away what your picture looks like. Making investment decisions is kind of like the old
ﬁlm photography model. You rearrange some stuff, and hope when you go back to see the
results you can remember what you did and extrapolate what worked and what didn’t.

When it is hard to imagine the
possible outcomes.

Imagine ordering at a restaurant from a menu in a language you do not understand. For
many people, this is what it is like to try to decide between investing in a “capital
appreciation fund” vs a “dynamic dividend fund.” The language of the choice selection makes
it very hard to imagine what the options really mean to you.

PredicDng Homer’s
AcDons

So we know that our gut, our Homer, has more inﬂuence our decisions in those types of
situations. Fortunately, he’s pretty predictable, and therefore relatively easy to set up
safeguards agains.

I’ll cover 3 of the main ways to predict what people will do.

1.

We have predictable
mental biases.

Anchoring Bias:
We are heavily biased by
where we start.

Say I told you, “the population of Chicago is 3 million. What is the population of Milwaukee?”
You might guess something like 1 million.

If I instead told you, “The population of Green Bay is 100,000. What is the population of
Milwaukee?” Most people guessed around 300,000. (The actual population is around
580,000.)

Availability Bias:
We overes+mate the
likelihood of events we can
easily remember.

?

We are much more scared of vivid and easily imagined threats (like plane crashes or
tornadoes), than we are of mundane but much more common dangers (like asthma attacks).
We are 20x more likely to die of asthma attack than tornado, so if we were purely rational,
we’d be 20x more scared of asthma than tornadoes.

RepresentaDveness Bias:
We some+mes see paMerns
where there are none.

Based on the beauty pageant contestants you’ve seen in the media lately, you might think
that ALL of them are dumb as a post. (That’s not true.) Another example: If you wore your old
hat during two games which your team won, you might assume that it’s a lucky hat, and that
if you don’t wear it during the next game, your team will lose. (Sorry, there’s no connection.)

UnrealisDc OpDmism:
Almost all of us think we are
beMer than average.

90% predict
they will
score here.

- +
In one study the authors conducted, 90% of their students predicted they would ﬁnish in the
top 2 percentiles in their class.

Loss Aversion:
We are happy when we gain
something, but twice as
unhappy when we lose it.

It does seem that someone who wears this shirt might only have been half as worked up
about getting the gun as he is about losing it.

Status Quo Bias:
We rarely overcome iner+a.

This XBox live offer from Microsoft is banking on people’s personal inertia. You get one
month of the gold service for $1, but then every month after that it bills you automatically at
the full price. Only 70% of all eligible people ever enroll in their 401ks. Have you adjusted
your 401k balance since you ﬁrst set it up?

Framing Bias:
“10 out of 100 die.”
vs.
“90 out of 100 are cured.”

July ’08 NBC News/Wall Street Journal poll:

Who would be the riskier choice for president?

Barack Obama 55%

John McCain 35%

Who would be the safer choice for president?

Barack Obama 41%

John McCain 46%

Both of these questions were asked in the same poll at the same time of the same people.
If the framing of the question had no effect on people, the responses here should just mirror
each other.

Priming Bias:
What we see or hear
immediately before a choice
aﬀects how we behave.

When a national survey included this question, it increased purchase rates by 35%. Remember
the cafe example from earlier. Just by seeing the phrase “Have you tried the carrot cake”
when logging in to the wireless network increases the likelihood you’ll buy some.

2.

We predictably succumb
to temptaDon.

I’m on a diet.

Planner

The authors talk about the Spock-Homer empathy gap. Your planner does not fully appreciate
how much your behaviors are altered when you are under the inﬂuence of temptation.

Mmmmmm, donut....

One is ok.
Or two.
Or three.

Doer

The authors talk about the Spock-Homer empathy gap. Your planner does not fully appreciate
how much your behaviors are altered when you are under the inﬂuence of temptation.

autopilot
You also have a third system...
Mindless choosing: your autopilot just continues doing what it’s used to - driving the same
route, or continuing to eat when there’s food in front of you. There was one study mentioned
in the book where participants were given very stale popcorn, either a large bag or a small
bag, and then watched a movie. Participants with the large bag ate 34% more, just because it
was there and they were on autopilot.

3.

We predictably
follow the herd.

We like to conform. This is at the root of speculative bubbles, internet memes, and fads. One
phenomenon that drives us to conform is the “spotlight effect,” which makes us feel like
people are paying closer attention to us--especially when we’re not conforming--than they
really are. (I have a feeling this dude with the emover thinks everyone is paying attention to
him.)

One particularly interesting ramiﬁcation of the herd behavior is its effect on popularity lists.
One experiment offered different groups of people the same set of downloadable mp3s with
visible popularity data. In the end, the most popular songs for each group were not
predictable and were not similar from group to group, except that they were lucky and picked
by the ﬁrst users of the system.

So how can we help
our Spock defeat
our Homer?

iNcen+ves
Understand “mappings”
Defaults
Give Feedback
Expect Error
Structure Complex Choices

This ﬂy is etched on the urinal as an aiming incentive, and was proven to reduce spillage by
80%. Another example is a social program that gives teen moms a dollar a day every day that
they are not pregnant.

Mappings means how we translate data about an option into what it actually means for us,
like translating kilowatts of energy into dollars on the electricity bill, or translating
megapixels to maximum print size.

Not new to us - defaults are POWERFUL because of the Status Quo bias. You can default to
opt-in, opt-out, or mandatory choice (which is like having yes/no radio buttons with nothing
selected).

This device is designed to give you feedback about your energy usage AS you are using it. It
is also mapping your usage to money, targeting your loss aversion, and it plans to tap into
vast social pressures by broadcasting your usage statistics to Facebook and Twitter.

Also not new to interaction designers - plan for the errors. This is an example of planning for
a (somewhat gruesome) common error tourists make when visiting London.

The paradox of choice is reduced if options are grouped. Or use strategies like “collaborative
ﬁltering” to reduce options presented. The example above uses many different groupings and
ﬁltering options to help you make the very complex choice, “Which of the thousands of songs
on this site should I listen to now?”

Lots of UX Examples

There are lots more examples out there (some of my colleagues will be presenting some
now), and now that you know what to look for I’m sure you’ll see them.

I’d just like to note that another tool we have as designers that this book doesn’t mention is
emotion. Emotion is certainly a strong nudging factor, and many great UX minds such as Don
Norman, Robert Fabricant, and Bill Buxton have written and spoken about using emotion in
design.

Recap

Nudges are about designing choices to try to help people make choices more with their
rational mind (their inner Spock) and less with their gut.
There are certain situations: Beneﬁts now, cost later; decisions we have to make
infrequently, places where the feedback isn’t immediate or the outcome is hard to
imagine, where the Homer in us has the upper hand,
and we can use our knowledge of our predictable psychology in these ways mentioned:
incentives, understanding mappings, defaults, giving feedback, and structuring complex
choices to nudge our Spock to rebalance the power.

PLUG!
Join us @ the
UX Book Club!

next mee+ng: July 22nd
Designing Gestural Interfaces

If you like what you saw here, join us! We read Nudge at our last meeting, and we plan to
read lots more great stuff in the future. (Come on, all your friends are doing it!)

Summary of Nudge, presented to IxDA LA

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