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How and why (semi-) governments start to stimulate
Behavioral Scientific insights & experiments
Wilte Zijlstra
Expertise C...
Outline
Dutch Authority Financial Markets (AFM)
• Realistic perspective on human behavior
• Potentially successful interve...
12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wi...
AFM: focus on effect
Malcolm Sparrow
• Pick important problems
• Fix them
• Tell about it
12 July 2017How and why (semi-) ...
Three perspectives on supervision
12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scie...
Psychology as part of supervision
12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scie...
Dutch Authority for the Financial
Markets (AFM)
12 July 2017How and why (semi-) governments start to stimulate stimulate B...
Outline
• Realistic perspective on human behavior
• Potentially successful interventions
• Measure effect
12 July 2017How ...
Perspectives on human behavior
12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scienti...
Realistic perspective
on human behavior
12 July 2017How and why (semi-) governments start to stimulate stimulate Behaviora...
Outline
• Realistic perspective on human behavior
• Potentially successful interventions
• Measure effect
12 July 2017How ...
Where to
intervene?
12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insight...
Effective interventions /
responsive regulation
12 July 2017How and why (semi-) governments start to stimulate stimulate B...
Pick the right tool (intervention)
12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Sci...
EAST: Four Simple Ways to Apply
Behavioural Insights
12 July 2017How and why (semi-) governments start to stimulate stimul...
Outline
• Realistic perspective on human behavior
• Potentially successful interventions
• Measure effect
12 July 2017How ...
Randomised Controlled Trials (RCT)
12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Sci...
Mandatory warning: Watch out!
Borrowing money costs money
12 July 2017How and why (semi-) governments start to stimulate s...
€ 9,630
€ 8,803
Loan amount
12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific...
Does the credit warning work?
Our RCT found no evidence for an effect on:
• Number of pages people visit
• How many websit...
12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wi...
RCT Financial Conduct Authority (UK)
Field Trial redress letter
12 July 2017How and why (semi-) governments start to stimu...
Applying behavioral insights means
… having realistic expectations of human behavior
… designing science-based interventio...
Take home
• Realistic perspective on human behavior
• Potentially successful interventions
• Measure effect
12 July 2017Ho...
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20170712 ecp2017 zijlstra_how and why semigovernments start to stimulate behavioral scientific insights_experiments

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Talk at 15th EUropean Congress of Psychology in track "Behavior in a digitizing world: The biggest Psychological experiment ever"

How and why (semi-) governments start to stimulate Behavioral Scientific insights & experiments.

The Dutch Authority for the Financial Markets (AFM) is committed to promoting fair and transparent financial markets. As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands. In our supervision, we use a realistic perspective on human behavior, to implement potentially succesful interventions and we measure what works (ideally using randomized controlled trials). We also encourage and challenge financial firms to apply these insights and methods, in order for them to put their customers' interests first.

Published in: Government & Nonprofit
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20170712 ecp2017 zijlstra_how and why semigovernments start to stimulate behavioral scientific insights_experiments

  1. 1. How and why (semi-) governments start to stimulate Behavioral Scientific insights & experiments Wilte Zijlstra Expertise Centre, team Consumer Behavior Netherlands Authority for the Financial Markets (AFM) Wilte.Zijlstra@afm.nl Twitter: @wilte
  2. 2. Outline Dutch Authority Financial Markets (AFM) • Realistic perspective on human behavior • Potentially successful interventions • Measure effect 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)2
  3. 3. 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM) Mission The AFM is committed to promoting fair and transparent financial markets. As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands. 3
  4. 4. AFM: focus on effect Malcolm Sparrow • Pick important problems • Fix them • Tell about it 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)4
  5. 5. Three perspectives on supervision 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)5 Decrease marktet imperfections and raise prosperity Influence behavior of market participants Uphold the law 1. Economic 2. Psychological 3. Legal
  6. 6. Psychology as part of supervision 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)6 https://www.afm.nl/nl-nl/professionals/nieuws/2016/okt/consumentengedrag
  7. 7. Dutch Authority for the Financial Markets (AFM) 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)7  Consumer Behavior Expert Team is part of the recently (2016) established Center of Expertise  Our team consists of economists, psychologists and supervisory experts  By applying behavioral insights, we aim to increase the effectiveness and efficiency of our supervision, and improve financial choice architecture for consumers  Counter evil nudges  Positive guidance for important financial decisions
  8. 8. Outline • Realistic perspective on human behavior • Potentially successful interventions • Measure effect 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)8
  9. 9. Perspectives on human behavior 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)9 I am fully rational and always make well-informed choices I am irrational and only do foolish things
  10. 10. Realistic perspective on human behavior 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)10 My rationality is bounded My preferences are not stable My time and motivation are finite This sometimes leads to problems when I have to make decisions http://www.afm.nl/nl/nieuws/2013/feb/eiopa-rapport-pensioncommunicatie.aspx Max
  11. 11. Outline • Realistic perspective on human behavior • Potentially successful interventions • Measure effect 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)11
  12. 12. Where to intervene? 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)12 Product Distribution Information Fair Financial Markets
  13. 13. Effective interventions / responsive regulation 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM) I. Ayres & J. Braithwaite (1992) Intrekken opschorten vergunning Boete dwangsom Waarschuwen, dreigen met sancties Samenwerken inspelen op sociale controle en heersende normen Overtuigen, instrueren en adviseren 13
  14. 14. Pick the right tool (intervention) 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)14
  15. 15. EAST: Four Simple Ways to Apply Behavioural Insights 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)15 http://www.behaviouralinsights.co.uk/publications/east-four-simple-ways-to-apply-behavioural-insights/
  16. 16. Outline • Realistic perspective on human behavior • Potentially successful interventions • Measure effect 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)16
  17. 17. Randomised Controlled Trials (RCT) 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM) https://www.gov.uk/government/publications/test-learn-adapt-developing-public- policy-with-randomised-controlled-trials 17 https://www.afm.nl/~/profmedia/files/brochures/2017/betrou wbaar-gedragsexperiment.ashx?la=nl-nl How to conduct a valid experiment? 7 steps to get insight in how consumers behave
  18. 18. Mandatory warning: Watch out! Borrowing money costs money 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)18 https://www.afm.nl/nl-nl/professionals/onderwerpen/informatieverstrekking/kredietwaarschuwing-iv https://www.afm.nl/nl-nl/professionals/nieuws/2016/dec/geld-lenen-geen-effect
  19. 19. € 9,630 € 8,803 Loan amount 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)19 5.70 5.69 number of pages viewed No warning 2.8% 2.6% % applied for loan No warning Random allocation web site visitors N=5990 N=5897 95% Confidence Interval N=226 N=217 38.7% 38.5% % accepted No warning No warning
  20. 20. Does the credit warning work? Our RCT found no evidence for an effect on: • Number of pages people visit • How many website visitors apply for a loan • How many applications are accepted • Requested loan amount 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)20
  21. 21. 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)21 https://www.afm.nl/nl-nl/professionals/nieuws/2009/dec/kredietwaarschuwingszin-succes 2009: “success” 2016: “no immediate effect” https://www.afm.nl/nl-nl/professionals/nieuws/2016/dec/geld-lenen-geen-effect
  22. 22. RCT Financial Conduct Authority (UK) Field Trial redress letter 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM) http://www.fca.org.uk/your-fca/documents/occasional-papers/occasional-paper-2 22
  23. 23. Applying behavioral insights means … having realistic expectations of human behavior … designing science-based interventions … running experiments to learn about what works, and what does not … using this knowledge to contribute to evidence-based policy making. 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)23
  24. 24. Take home • Realistic perspective on human behavior • Potentially successful interventions • Measure effect 12 July 2017How and why (semi-) governments start to stimulate stimulate Behavioral Scientific insights & experiments - Wilte Zijlstra (AFM)24 Website: www.AFM.nl/CG E-mail: Wilte.Zijlstra@afm.nl Twitter: @wilte

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