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You have to understand behaviour in order to change it

Since its inception in 2008 Nudge has emerged as a prominent and effective strategy for policy development and generated new avenues for working with and understanding behaviour. Building on old insights and new research Nudge provides an intuitive framework, and new tools to those whose job it is to change public and private behaviour. But it has also sparked new debates about public and private organisations use of psychology for manipulatory and self-serving means.

If you ever happen to browse through and academic journal dealing with politics and policy you would immediately notice that most, if not all, of the articles would be written by economists or legal scholars. If, on the other hand, you open a Marketing journal you would mostly find articles from psychologists.

This academic divide between marketing and policy is odd, since they both work with understanding and changing behaviour. Although marketing and policy has different goals, one is to optimise sales and the other welfare, they often face the same types of problems such as: how do we get people to do something, whether it’s signing up for a certain data plan or paying taxes on time.

In 2008 Richard Thaler and Cass Sunstein, who both are prominent academics from the field of policy, proposed to bridge the gap between policy and marketing. In their book, “Nudge – Improving Decisions on Health, Wealth and Happiness”, they both suggested that politicians and bureaucrats should supplement their traditional solutions with so called “nudges”, and provided insights into how and why nudges could work for the common good.

Since then, and perhaps owing to its popularity in the American and British administrations, Nudge has breached the policy domain and become a general strategy for behavioural change in both public and private domains. But sadly, popularity has also caused the term to be both misunderstood and misapplied.

What’s in a nudge?

Thaler and Sunstein loosely define a nudge as “anything, which causes a change in behaviour without changing the prices or limiting the options one has”. This definition isn’t very helpful (unless you happen to have a degree in Micro-economics).

A more accurate definition would be that Nudge is “a strategy built on the assumption that human decision-making is predictably flawed – which attempts to use these flaws as part of the solution”. A flaw in our decision making is typically called a bias and research in cognitive and social psychology has shown how biases play an intricate part in shaping our behaviour – often towards less optimal outcomes.

Biases work “behind our backs” by shaping the impressions and information we receive from the world as well as producing predictable behavioural patterns as a response to a problem. If this sounds abstract a small demonstration might be in order.

Imagine you have to choose between two treatments for a given illness. One is surgery, which provides the highest survival rate in the long run but carries a small risk of immediate death. The other is medicinal and has no short-term risks but a much lower survival rate overall.

I can frame the information in two ways.

1. Out of 100 patients that chose surgery 10 of them died immediately after

Or,

2. Out of 100 patients that chose surgery 90 of them survived immediately after.

Objectively, the information in the two statements is identical, but when we frame the decision as a risk of death it produces widely different behavioural reactions – even for trained oncologists. (Source)

nudge

Our everyday behaviour is shaped by the way information is framed, as well as a host of other behavioural biases. There’s the status quo bias which makes us stick to subscriptions far longer than we intend; the empathy gap which it difficult for us to predict our future behaviour; and the many social biases where we – consciously and unconsciously – are influenced by others behaviour, as well as many, many more.

We have known for some time that our decisions and the resulting behaviour is far from perfect, but our reactions to these have typically been limited to clamours for more eduction, taxes on unhealthy products and bans on risky loans.

Nudge is something else, even though it aims at the same – to improve our decisions about health, wealth and happiness. A nudge is a solution to a behavioural problem that implements the bias into the solution instead of having to fight against it.

An interesting example comes from the world of dining. Across the globe we spend inordinate amounts of resources on loosing weight, eating healthy and reducing the intake of high-fat snacks. But, the money we invest in diets, stomach reductions, information campaigns and educational initiatives has yet to make a dent in the rising obesity trends.

Professor in consumer behaviour, Brian Wansink, has studied our dietary behaviour, and proposed that we should focus more on dinnerware than information. Through several experiments Wansink has shown that plate sizes, the width of our glasses and our proximity to the food in a buffet all play a vital role in how much food we consume. By designing cafeterias and private kitchens with these insights in mind, we can reduce the intake of calories without forcing people to fight their own psychology.

Across various domains such as private finances, recycling, energy consumption and compliance nudges have demonstrated to produce remarkable results at low cost, and the scientists, public servants and private marketers are all working daily on producing new results.

Nudge and Marketing

If marketing researchers have been using psychological insights in their work to years – then what – if anything – does Nudge has to offer to practitioners in the field?

For one, Nudge is not traditional marketing because it seeks to improve pro-social behaviour rather than sales. This means that Nudge provides a range of cases that fall outside the range of traditional marketing, for instance it can be used in employee strategies – to provide healthier workplaces. Naturally Nudge also offers a range of strategies that can be implemented in more traditional marketing, since the increased focus on behavioural insights in public governance has fuelled research in the field considerably.

Finally, the rising interest in Nudge also means that private businesses may come to see new types of regulation. As public regulators come to understand how packaging, presentation, marketing and space management influences national health and wealth the need to include these aspects in future regulation will increase. The wise marketers may try to react proactively and make it a business strategy to make the healthier and better options the easiest to reach for the biased customer.

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