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Behavioral Economics as a Lens for Interaction design

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Interaction designers craft experiences by curating the flow of information within contexts that aim to focus attention and interest. Subtle psychological details can dramatically transform an experience. Experimental results from behavioral economics spotlight opportunities for improving the dynamics of an interaction: The presentation frame can harness intrinsically motivating cues, drive engagement, and enable people to develop behavioral patterns that harmonize with their deepest aspirations.

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Behavioral Economics as a Lens for Interaction design

  1. 1. Behavioral Economics as a Lens for Interaction Design <ul><li>Paul Whitmore Sas [email_address] </li></ul><ul><li>BayCHI general mtg Valentine ’ s day 2012 </li></ul>
  2. 2. Framing the bridge from Psych to Behavioral Economics <ul><li>Contextual cues, situational aspects, environmental associations shape/structure perception </li></ul>4
  3. 3. 6 Behavioral economists view Designers/Product Managers as CHOICE ARCHITECTS “ Many features, noticed and unnoticed, can influence decisions. The person who creates that environment is, in our terminology, a choice architect . ” (Thaler & Sunstein) Option A Option B
  4. 4. Imp of the Perverse - Moishe Pipik <ul><li>Impossible to command self reliably </li></ul><ul><li>Irony in inner drive of any productivity guru </li></ul>
  5. 5. Behavioral Economics honors our inner Snoid <ul><li>We do not resemble a Spock-like intelligence </li></ul><ul><li>Whatever we tell ourselves, we are largely strangers to many of our impulses & motivations </li></ul><ul><li>Can we trick the Snoid into driving when tendencies are frequently unstable? </li></ul>
  6. 6. Can we make ourselves GTD (get things done)? <ul><li>Structured procrastination Assemble a stack of to-dos, & recognize that #1 will rarely be the task getting done. Self motivated to dither on #2+, simply in order to avoid making any progress on #1. </li></ul><ul><li>BJ Fogg ’ s 3 Tiny Habits , whittling down our ambition to epsilon </li></ul><ul><li>Goals help, but what helps the self set goals? </li></ul>
  7. 7. People fail to form goals for most important areas <ul><li>When asked to describe personal priorities, people provide more articulate & explicit goals for lower priorities </li></ul>Delmore Effect - http://www-psych.stanford.edu/~wit/PhDraft.pdf
  8. 8. Eliciting Goals that Matter requires delicacy <ul><li>Recalling past successes just makes it worse </li></ul><ul><li>Distracting people by asking them to think about irrelevant topics doesn ’ t help either </li></ul>15
  9. 9. To recall a success, not connected to most important goal, can help overcome the Delmore Effect
  10. 10. Many sites/apps demand explicit expression of a preference Notwithstanding inchoate & tender essence It’s typical to front-load cognitively demanding & emotionally challenging tasks
  11. 11. Next week I will want things that are good for me… Choosing for tonight Choosing for next Thursday Choosing for second Thursday Don ’ t Assume Participants Know Themselves slide adapted from Prof Russell James III,  Texas Tech U
  12. 12. How can interaction designers solicit the revelation of preferences? 1- Make it possible to accumulate info without deliberate action 2- Enable answers to “ quiz ” like questions to create small successes to build greater engagement w/o triggering anxiety Much of the hobo ’ ing invasions by FaceBook, PATH, Angry Birds, et al involves stealing a look at predictors of useful actions to perform for the invaded privacy. When caught, the services point to the favors generated from the theft. Perhaps we ’ ll get used to being abused this way
  13. 13. Understanding Preferences <ul><li>Building a better Eliza (1966 computer program) </li></ul><ul><ul><li>ELIZA mimicked a therapist by returning whatever user typed with a question </li></ul></ul><ul><ul><li>> How does that make you feel? </li></ul></ul><ul><ul><li>> Tell me more about … </li></ul></ul>
  14. 14. Beware that Q&A can just be pesky <ul><li>Eliza tricked people into thinking that we are talking about my self </li></ul><ul><li>Microsoft “Clippy” had much more computational intelligence than Eliza, but it only directed attention to Clippy </li></ul>
  15. 15. New feedback methods transform our dialog with technology <ul><li>Smart Phones are becoming scary Smart Instant Heart Rate </li></ul>
  16. 16. “ Revealed preference ” increasingly intimate <ul><li>Attention & Performance (Kahneman ’ 73): Pupils dilate when doing cognitively demanding work </li></ul><ul><li>QSelf streaming a panoply of signal detectors </li></ul><ul><li>Being in a good mood (actual or induced) improves ability to selectively attend & process more accurately </li></ul><ul><li>Affdex Affectiva (MIT MediaLab) measures mood through video camera monitoring: smile, surprise, confusion </li></ul>
  17. 17. The fight for self control <ul><li>Herrnstein ’ s rats (acc. to Dan Ariely) </li></ul><ul><li>Lever A: Small pellet now, but then it blocked greater reward </li></ul><ul><li>Lever B: Larger pellet, delivered after a delay </li></ul><ul><ul><li>Rats couldn ’ t resist the quick fix A </li></ul></ul><ul><li>But, if given Lever C (which disabled A), rats succeed in choosing bigger/later, </li></ul><ul><li>Can we delegate self-discipline to a mechanism? </li></ul>
  18. 18. Automating Choice <ul><li>Subscription aims to reduce friction of decision-making </li></ul><ul><ul><li>Theater subscription / Gym membership </li></ul></ul><ul><ul><li>Amazon: 2 ways – PRIME & 15% off if a purchase is transformed from a one-off purchase to a subscription </li></ul></ul><ul><ul><li>Medical insurance –Seems irrational to choose high premium, low deductible, yet many don ’ t want to make repeated calculations about trade offs </li></ul></ul><ul><ul><li>Implausibility of micropayments has been due to the impossibility of shrinking a “ decision ” to micro-size </li></ul></ul>
  19. 19. Diminishing Returns (Weber-Fechner Law) <ul><li>Response starts big, and with each additional increment, gives less and less bang </li></ul>Psychophysics of Value
  20. 20. Move from framing where response is flat into framing where the payoff is still increasing. Games do this by slicing infinite horizon into smaller intervals The reverse occurs with Subscription, and explains how friction reduces: Move many short, sharp shocks toward one smooth flat perspective. Behavioral Econ explains one way that games hook into motivation
  21. 21. Experienced vs. Remembered Utility <ul><ul><li>Our mind does not make movies; it takes snapshots Some aspects of an experience are immediately accessible, while others are very difficult to access because they’d require computing </li></ul></ul><ul><ul><li>Analogous visual image </li></ul></ul><ul><ul><li>Peak is obvious Sum is not </li></ul></ul>
  22. 22. Peak and End Rule (Kahneman) <ul><li>Experienced vs. Remembered Utility </li></ul><ul><ul><ul><li>Rather than guess the total amount of suffering, people recall the worst instant, and the last instant. </li></ul></ul></ul><ul><ul><ul><li>If you increase the amount of suffering, but arrange for the last minutes to be less intense, people report a longer period as less painful </li></ul></ul></ul>
  23. 23. Peak and End Rule for Designers <ul><li>The last moment of contact makes an inordinate difference to the recalled value of experience </li></ul><ul><li>Transform the experience by giving something pleasant at close </li></ul><ul><ul><ul><li>DropBox spiffs new users an extra quarter gigabyte </li></ul></ul></ul><ul><li>Jared Spool's &quot;Truth About Download Time&quot; </li></ul><ul><ul><ul><li>Nielsen concluded that users will be annoyed … by pages that take any longer than about 10 seconds to load. (Since most popular sites take 8 secs, and less popular take an avg of 19 secs to download) </li></ul></ul></ul><ul><ul><ul><li>No correlation between download times and perceived speeds. Amazon.com, rated one of fastest, really one of the slowest </li></ul></ul></ul><ul><ul><ul><li>Strong correlation between perceived download time & whether successfully completed task </li></ul></ul></ul>
  24. 24. More choice causes less purchasing (Iyengar) <ul><li>Every other hour, a set of 24 jams/jellies to sample. On odd hours, only 6 jams available. </li></ul><ul><li>Choice of sampling any of 24 jams: 3% redeemed coupon. </li></ul><ul><li>Choice of sampling any of 6 jams </li></ul>
  25. 25. More choice causes less purchasing (Iyengar) <ul><li>Every other hour, a set of 24 jams/jellies to sample. On odd hours, only 6 jams available. </li></ul><ul><li>Choice of sampling any of 24 jams: 3% redeemed coupon. </li></ul><ul><li>Choice of sampling any of 6 jams: </li></ul><ul><li>30% redeemed </li></ul>
  26. 26. Choice Overload shown in 401K participation 32
  27. 27. Power of Defaults <ul><li>A study of 401K participation, 3 different conditions: Opt-in, Suggestion, and Automatic enroll </li></ul><ul><li>Fact 1. Most investors follow Default Plan </li></ul><ul><ul><li>Changes participation </li></ul></ul><ul><ul><li>Also contribution level </li></ul></ul><ul><li>Fact 2. ‘Suggested choice’ not very attractive unless default </li></ul>
  28. 28. Can education/training overcome default? <ul><li>In a word, No </li></ul><ul><li>Notice: </li></ul><ul><ul><li>People said they were 100% likely to enroll, yet only 14% actually did </li></ul></ul>
  29. 29. How to manage tendency to procrastinate <ul><li>People make “ bold forecasts ” but “ timid choices ” </li></ul><ul><li>The Procrastinator app. If you can ’ t make a choice by the deadline, it chooses for you. </li></ul><ul><li>Analogy for financial services: </li></ul><ul><ul><li>Although rarely allowed to automate, customers who bail/pause can see what they have “ lost ” by not taking step </li></ul></ul>37
  30. 30. Relevance to Designers <ul><li>Ruthlessly simplify: Choices are pain points </li></ul><ul><li>Consider implementing the McKinsey 3X3 </li></ul><ul><li>Provide broad options Then hierarchically reveal detail </li></ul><ul><li>If it ’ s a brochure-ware feature, “ provide but hide ” </li></ul><ul><ul><li>Rob Haitani, designer of Palm, BayCHI 2003 </li></ul></ul>33
  31. 31. Descriptive Choice: Prospect Theory
  32. 32. General features of Prospect Theory <ul><ul><li>Status quo bias (connected to power of defaults) </li></ul></ul><ul><ul><ul><ul><li>Disadvantages of change weighted more than the advantages Hedonic twins can diverge over time </li></ul></ul></ul></ul><ul><ul><li>Losses weigh much heavier than foregone gains/opportunity costs </li></ul></ul><ul><ul><li>Save More Tomorrow program – Allocate future raises </li></ul></ul><ul><ul><li>Risk averse for gains </li></ul></ul><ul><ul><li>Risk impulsive for losses </li></ul></ul>
  33. 33. Some consequences for designers <ul><ul><li>Showing data too frequently can cause stress </li></ul></ul><ul><ul><li>Amos Tversky didn’t read student evaluations, just avgs </li></ul></ul><ul><ul><li>// Marriage is in danger when negative info exceeds 1/5 of the total channel volume (Gottman) </li></ul></ul><ul><ul><li>Losses should be summed up into one bad ball </li></ul></ul><ul><ul><li>Wins should be sliced up into many small gains </li></ul></ul><ul><ul><ul><li>Breaking up enjoyable task increases pleasure; sustained bad time less </li></ul></ul></ul>
  34. 34. Goals in Prospect Theory <ul><li>Goals divide outcomes into gains or losses </li></ul><ul><li>People approach losses differently </li></ul><ul><li>Failure is more painful than success is satisfying </li></ul>
  35. 35. What does Behavioral Economics Offer IXDN? <ul><li>Via the example of these particular findings, BE should promote experimentation </li></ul><ul><li>Yet, Shafir’s work highlights our tendency to delay in face of uncertainty </li></ul><ul><ul><ul><li>Many QSelf attendees collect, but never take next step to experiment </li></ul></ul></ul><ul><ul><ul><li>People pay more for a restaurant meal than for a cookbook. The self that designs the experiment is not the same as the experimented-upon self. </li></ul></ul></ul><ul><li>Revealed preferences can be constructed in dialog with experimentally streamed data conversation </li></ul><ul><li>Union of empiricism & sensitive technology opens new vistas </li></ul>
  36. 36. Linda, the “ prototype ” who launched a cognitive revolution <ul><li>Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discimination and social justice, and also participated in antinuclear demonstrations. </li></ul><ul><li>Please rank the following statements by their probability, using 1 for the most probable and 8 for the least probable </li></ul><ul><li>Linda is a teacher in elementary school. </li></ul><ul><li>Linda works in a bookstore and takes Yoga classes. </li></ul><ul><li>Linda is active in the feminist movement. </li></ul><ul><li>Linda is a psychiatric social worker. </li></ul><ul><li>Linda is a member of the League of Women Voters. </li></ul><ul><li>Linda is a bank teller. </li></ul><ul><li>Linda is an insurance salesperson. </li></ul><ul><li>Linda is a bank teller and is active in the feminist movement. </li></ul><ul><li>— Tversky, Amos; & Kahneman, Daniel (1983), &quot;Extensional Versus Intuitive Reasoning: The Conjunction Fallacy in Probability Judgment&quot;, Psychological Review 90(4) (October): 293-315. </li></ul><ul><li>Copyright © 2007 by William J. Rapaport ( [email_address] ) </li></ul><ul><li>http://www.cse.buffalo.edu/~rapaport/575/F07/linda.html-20070830 </li></ul>

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