Use of behavioral economics to nudge on the Power…

Interesting study at the NIH on the 9 elements of longevity found in 5 communities around the world and how they were applied to pilot American cities to prompt behavior change.

What began as a National Geographic expedition, lead by Dan Buettner, to uncover the secrets of longevity, evolved into the discovery of the 5 places around the world where people consistently live over 100 years old, dubbed the Blue Zones. Dan and his team of demographers, scientist and anthropologists were able to distill the evidence-based common denominators of these Blue Zones into 9 commonalities that they call the Power 9. They have since taken these principles into communities across the United States working with policy makers, local businesses, schools and individuals to shape the environments of the Blue Zones Project Communities. What has been found is that putting the responsibility of curating a healthy environment on an individual does not work, but through policy and environmental changes the Blue Zones Project Communities have been able to increase life expectancy, reduce obesity and make the healthy choice the easy choice for millions of Americans.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6125071/

LED warning lamp changes color as rooms get noisier

Behavioral economics in practice. Every school should have one of these.

It can get tiresome, continually having to tell groups of children – or even adults – to be quiet. That’s where a new sound-sensitive lamp comes in, as it does the job for you by changing color in response to rising noise levels.

https://newatlas.com/good-thinking/led-lamp-changes-color-noise/

https://newatlas.com/good-thinking/led-lamp-changes-color-noise/

Heads or Tails: The Impact of a Coin Toss…

This study adds weight to Loss Aversion theory through an interesting experiment design.

Loss Aversion: a cognitive bias that causes potential losses to be weighed more heavily than potential gains (the ratio is somewhere around 2:1, meaning that most people will feel comfortable with a decision only when the likely gains are double the likely losses).

In it, Steven Levitt (of Freakanomics fame) had people facing a life decision — from big ones like ending a relationship and leaving a job to lesser ones like going on a diet — and who were on the fence, toss a coin to indicate the direction and then tracked their happiness over the next year.

Under Loss Aversion, this would mean they were valuing the change at about 2x utility of not taking the decision. However, since people who made the change report higher happiness, this counters expected utility theory.

…when it comes to “important” decisions (e.g. job quitting, separating from your husband or wife), making a change appears to be not only correlated with increased self-reported happiness, but also causally related, especially six months after the coin toss.³ Those who were instructed by the coin toss to make a change were both more likely to make the change (as noted above) and, on average, report greater happiness on the follow-up surveys. This finding is inconsistent with expected utility theory; those who are on the margin should, on average, be equally well off regardless of the decision they make. This result provides strong empirical support for the notion of a status quo bias (Samuelson and Zeckhauser, 1998; Kahneman et al., 1991). There is suggestive evidence that the coin toss outcome on “less important” decisions (e.g. going on a diet, dying one’s hair, quitting a bad habit) influences future happiness in a similar, but more muted, fashion.

https://academic.oup.com/restud/advance-article/doi/10.1093/restud/rdaa016/5834495

This part is particularly interesting in that simply making the change brought people more happiness — ie “change is good for the soul”. That needs to be studied more but is one explanation.

…for all decisions—not just the most important ones—there appears to be a causal impact of making a change on how satisfied the subject is ex post with the decision. Those who were instructed to make a change by the coin toss are substantially more likely to report that they made the correct decision and that they would make the same decision again if given the chance.

https://academic.oup.com/restud/advance-article/doi/10.1093/restud/rdaa016/5834495

When thinking about adoption of your product / service / cause, finding a way to message this in your value proposition might have an effect to tip the balance even if the utility is biased against making the decision. I look forward to seeing more study in this area.

Danny Kahneman: Putting your Intuition on Ice

I’m a big fan of Danny Kahneman who, along with Amos Tversky, created the field of behavioral economics. If you haven’t read the book about their shared history, The Undoing Project by Michael Lewis, you should. Kahneman’s book Thinking Fast & Slow is also excellent.

He covers a range of issues here and well worth the time. But this is not a passive listen podcast. Pay attention: negotiations, pre-mortems, organizational decision making, intuition & judgement, biases, etc…what’s not to like.

Here are a few highlights from our conversation:
I think changing behavior is extremely difficult. There are a few tips and a few guidelines about how to do that, but anybody who’s very optimistic about changing behavior is just deluded. It’s hard to change other people’s behavior. It’s very hard to change your own. Not simple.
I’d like people to know that motivation is complex, and that people do good things for a mixture of good and bad reasons; and they do bad things for a mixture of good and bad reasons. I think that there is a point to educating people in psychology. It’s to make them less judgmental. Just have more empathy and more patience. Being judgmental doesn’t get you anywhere.
What gets in the way of clear thinking is that we have intuitive views of almost everything. So as soon as you present a problem to me, I have some ready made answer. What gets in the way of clear thinking are those ready made answers, and we can’t help but have them.
We have beliefs because mostly we believe in some people, and we trust them. We adopt their beliefs. We don’t reach our beliefs by clear thinking, unless you’re a scientist or doing something like that. There’s a fair amount of emotion when you’re a scientist as well that gets in the way of clear thinking. Commitments to your previous views, being insulted that somebody thinks he’s smarter than you are. I mean lots of things get in the way, even when you’re a scientist. So I’d say there is less clear thinking than people like to think.
Very quickly you form an impression, and then you spend most of your time confirming it instead of collecting evidence.
Negotiations is not about trying to convince the other guy. It’s about trying to understand them. So again, it’s slowing yourself down. It’s not doing what comes naturally because trying to convince them is applying pressure. Arguments, promises, and threats are always applying pressure. What you really want is to understand what you can do to make it easy for them to move your way. Very non-intuitive. That’s a surprising thing when you teach negotiation. It’s not obvious. We are taught to apply pressure and socialize that way.
Independence is the key because otherwise when you don’t take those precautions, it’s like having a bunch of witnesses to some crime and allowing those witnesses to talk to each other. They’re going to be less valuable if you’re interested in the truth than keeping them rigidly separate, and collecting what they have to say.

https://fs.blog/daniel-kahneman/