Nudge: chapters 2, 3, & 4: July 7

[HashNotAdam]

Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler, Cass R. Sunstein

https://www.amazon.com/Nudge-Improving-Decisions-Health-Happiness-ebook/dp/B00A5DCALY/

Aiming to read:

Chapter 2: Resisting Temptation Chapter 3: Following the Herd Chapter 4: When Do We Need a Nudge?

MC: @antoinemacia Notes: @HashNotAdam See you 12 pm Tuesday, July 7th @ https://whereby.com/blackmill

Ping gday@blackmill.co if you want a calendar invite and access to the low-volume Slack beforehand

[HashNotAdam]

Chapter 2: Resisting Temptation

Temptation

• Economics believes that you can never be made worse off by having more options
• The truth is people are commonly "dynamically inconsistent" due to temptation and mindlessness
• Something is "tempting" if we consume more of it when hot (or primed) than cold
• Self-control issues arise because we underestimate the effect of arousal
• Self-control problems can be illuminated by thinking about an individual as containing two semiautonomous selves, a far-sighted ‘Planner’ and a myopic ‘Doer’

Mindless Choosing

• People have a tendency to perform common actions without thinking
• Large plates and large packages mean more eating; they are a form of choice architecture, and they work as major nudges

Self-control strategies

• People take steps to manage their weaknesses
• Often the Doer will sabotage the Planner (e.g. turning off the alarm clock)
• When monetary incentives await the completion of a task, often the task will get put off. Using a loss focused penalty, however, can provide the motivation needed
• Daylight saving time is a form of nudge that convinces us to get up earlier and results in energy savings

Mental accounting

• Mental accounting is a form of internal control system
• It is used when you evaluate, regulate, and process your home budget
• While used funds allocated to one use could be re-attributed to another, unfunded use, mental accounting causes us to see the first fund as untouchable
• Some gamblers will separate the money they entered with and their winnings so as to bed only "the house's money", as if it were a different kind of money
• People might have more in savings than on their credit card but will pay high interest on the credit rather than pay off the card. Keeping the card at its limit might actually stop unnecessary spending

Chapter 3: Following the herd

• Econs are not followers of fashion; humans, on the other hand, are frequently nudged by other humans
• Smiling and yawning is "contagious"
• Social influences:
  • Information: if many people do or think something, their thoughts convey information about what might be best for you to do or think; and
  • Peer pressure: if you care about what people think of you then you might go along with the crowd
• One reason why humans are easily nudged is we like to confirm

Doing what others do

• Multiple studies show people will agree with a group despite their better judgement or senses
• If everyone but you sees things the same say, you might conclude that they are probably right even if the correct answer is obvious
• Groups fall prey to ‘collective conservatism’: the tendency of groups to stick to established patterns even as new needs arise
• ‘Pluralistic ignorance’ is the idea that we may follow a practice merely because we think that most other people like it
• Communism survived in the former Soviet bloc in part because people were unaware of how many people despised the regime

The spotlight effect

• One reason why people expend so much effort conforming to social norms and fashions is that they think that others are closely paying attention to what they are doing
• People are paying less attention to you than you believe

Cultural change, political change, and unpredictability

• People are tempted to think that outcomes were predictable, however, small interventions and even coincidences can produce large variations in the outcome
• Advertisers use social influences like ‘most people prefer’ their own product, or that ‘growing numbers of people’ are switching from another brand

Social nudges as choice architecture

• If choice architects want to shift behaviour with a nudge, they might simply inform people about what other people are doing
• Simply saying that most people are tax compliant causes people to be tax compliant
• More people recycle when they are told most people recycle
• The availability heuristic results in people believing that alcohol abuse is more prevalent than it actually is, causing college students to drink more; providing counter-evidence reduces this problem
• There can be a ‘boomerang effect’ whereby an undesirable outcome results if you provide people facts showing they are better than average
• The boomerang effect can be negated by using an emotional nudge (e.g. happy vs sad emoji)

Priming

• The ‘mere-measurement effect’ refers to the finding that when people are asked what they intend to do, they become more likely to act in accordance with their answers
• The mere-measurement effect is a nudge
• The nudge provided by asking people what they intend to do can be accentuated by asking them when and how they plan to do it
• Often we can do more to facilitate good behaviour by removing some small obstacle than by trying to shove people in a certain direction

[HashNotAdam]

Discussion

@antoinemacia: Can you resist nudges? If you do, what is the effect? The chapter caused reflection—you think of specific ways you've been nudged throughout your life and your reaction is "Oh well!" rather that it being a big issue

@elle: In understanding @lachlanhardy's weakness of mind, has suggested he pay her if he doesn't meet a weight-loss target @tomdalling: Thinks the weightloss strategy could work but the concept is frightening. (See: Loss aversion) @lachlanhardy: Finds the idea of paying for failing to turn in chapters of a thesis to be motivating

@tomdalling: Has trouble going to the gym now but used to find it easy when going with friends and not turning up would be letting people down @lachlanhardy: External accountability. It is also recommended that you do this with different people. For example, if you say to your partner "I'm going to go the gym 3 times a week" but then you go less than 3 times, they'll likely forgive you whereas a friend who is waiting for you at the gym might be less forgiving @elle: Or it could be an action like ordering a taxi @tomdalling: Often thinks extrinsic motivation is unnecessary and soon realises this is unfounded. First learnt about Systems 1 & 2 (automatic and reflective systems) in Stumbling on Happiness which says your brain is like someone riding an elephant. The elephant is emotional and doesn't want to be ridden and the other half of the brain is the rider trying to control the elephant. The rider needs to trick the elephant to do what they want @elle: Start small; be consistent

@lachlanhardy: Exhibits elements of mental accounting. When asked why he didn't buy something yesterday, he explained "I don't have any money" but this was because the money he had was "savings" and therefore untouchable

@tomdalling: Highlights the predatory nature of banks in charging high interest on credit cards in the knowledge that people have a disincentive to pay off the balance because then they'll spend the limit again

@antoinemacia: The fall of communism in the former Soviet bloc was a serious nudge "a bit more than an elbow" @lachlanhardy: Would there have been 1 billion people behind the Iron Curtain? Fact check: It was probably closer to 400 million which is still a substantial "nudge" @antoinemacia: This example makes it hard to pinpoint what a nudge is since, in this case, it isn't a campaign or marketing effort @tomdalling: One gripe along these lines is that they say nudging is Libertarian Paternalism which doesn't take away people's choices but also "this is the nudge that led to the rise of Hitler" @antoinemacia: During Soviet times, it could take a long time for views to spread but, with social media, these nudges could come about more easily @tomdalling: Instagram influencers can be worrying because it's easy to have an opinion and they are unregulated whereas at least there is some regulation on TV

@antoinemacia: The book discusses how government can use nudges to help causes like climate change. Are there examples that have affected people? @elle: Became more engaged in recycling and composting after moving and seeing how the community behaved @tomdalling: The Texas littering example was probably the most American thing ever. The people were littering to spite the Government and when the Government manipulated them into changing their behaviour, they were happy about it @tomdalling: Constantly falls for the way supermarkets are laid out where healthy items can be on the bottom shelf and less-healthy items at eye-level @lachlanhardy: This is why the milk is at the back of the store and they track your movement/flow throughout the store

@antoinemacia: What about nudges, or dark patterns, from our industry? @tomdalling: Entering a credit card to get a free trial because it's expected that you'll forget to cancel the trial

@antoinemacia: Is an exercise beast. @lachlanhardy, however, not so much