Wednesday, September 25, 2013

Choice Architecture: Clever Big Brother

I've been fascinated recently by new ideas about motivation coming from economists and behavior scientists--in particular an approach variously known as "Nudge Theory" or "Choice Architecture." At its heart, this field devises psychologically astute ways of predisposing people to one behavior instead of another, typically by manipulating what, when, or how choices are presented. For example, two recent research papers applied choice architecture to improving children's nutrition and getting adults to save for retirement.

The subject has not escaped the attention of U.S. President Obama and UK Prime Minister David Cameron, who are using -- or have used-- nudge theory in hopes of advancing political goals on the cheap. Once I heard about the idea, I started to notice examples everywhere... a study of reducing theft of petrified wood from a National Park; improved drug packaging; Finnish government gift boxes for new moms ....

But back to the recent scientific papers. The school lunch paper didn't brand itself as an instance of choice architecture per se, but that's what it was. In two elementary schools in Upstate New York, researchers from Cornell University's Department of Applied Economics and Management studied the lunch choices of 272 pupils in 14 classrooms. Andrew S. Hanks, David R. Just, and Brian Wansink made one small change in the pupils' lunch entrée selection. Some students pre-ordered their entrées during the 4-week trial; others chose entrées while in the cafeteria line.

If your mother ever warned you not to go grocery shopping on an empty stomach, you can probably guess the outcome of this experiment:
When students did not [pre]order but instead selected their entrée as they entered the lunch line, it appears that hunger-based, spontaneous selection diminished healthy entrée selection by 48% and increased less healthy entrée selection by 21% ... data demonstrate how a simple environmental change—preordering—can prompt children to choose healthier food.
In the introduction to their research the authors of the study cite statistics showing that almost a third of U.S. children aged 6 to 13 years are obese. The hope is one healthy meal a day for more children could help combat this obesity epidemic.  Beyond that, there's room to hope that exposure to a healthy meal each day could nudge kids toward a preference for healthy foods and better food choices throughout their lives.

Such hopes for improved lifelong nutrition are stoked by observations from happiness guru/motivational speaker  Shawn AchorWriting about his personal experiments in reforming life habits, Achor says the key to increasing good habits and extinguishing bad ones is to make it absurdly easy to do the good thing and harder to do the bad. For example, he was much more likely to practice guitar if he left it out on a stand, within sight and close at hand. He sharply reduced his TV-watching by taking the batteries out of the remote control each time he turned off the set. Each behavioral manipulation made only a 20-second change in how long it took to start an activity--but that's just long enough to encourage or discourage an action. Repeat a behavior change for 21 days, Achor says, and you've got the makings of a life habit.

Making a good habit easy is at the heart of research on how to increase retirement savings. This research was reported by Shlomo Benartzi (at UCLA) and Richard H. Thaler (at the University of Chicago) and published in Science on March 8, 2013. The authors begin by observing that the savings of an increasing proportion of U.S. workers will be insufficient to sustain their lifestyle through retirement. Thirty years ago, just under a third of people were setting aside too little. Three years ago more than half were at risk. This doesn't even address the 78 million employees who will be completely dependent on savings because their workplace offers no retirement plans.
"Fortunately, there are solutions to these problems. We simply have to change the choice architecture of retirement plans by utilizing the findings of behavioral economics research and make such plans available to all workers."
Benartzi and Thaler say that increasingly employers have moved away from defined-benefit retirement plans to defined-contribution plans, in which employees choose whether to participate and then how much of their paycheck they want to go towards retirement. Unfortunately, almost 25% of those eligible don't even bother to sign up, and savings rates are too low for many who do. Choice architecture offers an easy fix: Make participation in the plan the default for all employees, but allow them to "opt-out." Studies show only around 10% will do so -- raising participation significantly compared to an "opt-in" system. For those in a savings scheme, most employers now offer a sensible, age-appropriate default investment option, sparing employees the daunting job of devising their retirement savings portfolio.

Choice architecture really comes into its own for deciding how much of each paycheck to contribute toward retirement over the years. Bernatzi and Thaler say:
Automatic enrollment does a good job of getting people started, but employees can be stuck for years saving at an insufficient rate.
What is needed to help employees save at higher rates over the years is automatic escalation of savings,
a plan we devised called Save More Tomorrow (SMT), based on behavioral economics research ... First, employees are invited to commit now to increase their saving rate ... in the future. Self-control is easier to accept if delayed rather than immediate. Second, planned increases in the saving rate are linked to pay raises. This is meant to diminish the effect of loss aversion—the tendency to weigh losses larger than gains. Because the increase in the savings rate is just a portion of the pay raise, employees do not see their pay fall. Third, once employees sign up for the plan they remain in it until they reach a preset limit or choose to opt out. This uses inertia to keep people in the system.
At the first company where SMT was tested, employee savings quadrupled in four years, and many employers have now jumped on the scheme, or at least some type of automatic escalation. To assure a decent participation rate and increased savings, very easy or default signup and savings escalation are crucial.

On a completely different front, I saw a less subtle example of choice architecture -- and found an explanation for a personal annoyance -- when I recently read the results of a study of packaging of pain relievers in England and Wales. Shortly after I moved to the UK seven years ago, I was irritated and mystified to discover that aspirin, acetominophen (called "paracetamol" in the UK), and other pain relievers and related products are only sold in tiny packs, and stores won't sell you more than a couple of  these per visit. In the U.S. I had tended to buy economy-sized bottles of 500 tablets. The results of the packaging study ended my mystification (if not my inconvenience).

Evidently the UK introduced legislation in late 1998 to restrict pack sizes of paracetamol. The pain reliever is effective and safe in moderate doses, but taking too much at once or over a long period can cause serious, even fatal, liver toxicity. Extensive aspirin use can cause pitting of the gastro-intestinal tract. Both drugs are also components of other over-the-counter medications, so people who don't read the list of ingredients may not realize they are getting "hidden" doses of aspirin or paracetamol. Doctors hoped the small pack size would reduce intentional and unintentional overuse of the pain relievers by making it inconvenient to buy more than a few doses at once.

The study, by Keith Hawton at the University of Oxford Centre for Suicide Research (and colleagues at Oxford and elsewhere)  looked at deaths (intentional, unintentional, and undetermined) and liver transplants in England and Wales due to poisoning by paracetamol before and after the 1998 legislation. The data pointed to a 43% reduction in accidental and suicide deaths due to paracetamol liver poisoning. Over the entire 11¼ post-legislation years that the team studied, they estimated there were 765 fewer deaths, thanks to the inconvenient packaging.

I saw a sweeter face of choice architecture when I read about the Finnish Baby Box. An article on the BBC website reports:
For 75 years, Finland's expectant mothers have been given a box by the state. It's like a starter kit of clothes, sheets and toys that can even be used as a bed. And some say it helped Finland achieve one of the world's lowest infant mortality rates.
Wildly popular with new parents, the box appears to have everything a baby needs for its first year of life. The contents change a little each year -- different fabrics chosen for the gender-neutral clothing, for example, and new items reflecting changes in thinking about best practices in infant care. In 1969 the boxes switched from cloth to disposable diapers, but by 2006 they returned to environment-friendly cloth "nappies." Baby bottles and pacifiers, ("dummies" in UK parlance) were previously included, but also ditched in 2006 to encourage the healthier practice of breastfeeding. The current box pictured in the BBC article includes condoms, a picture book, and bra pads--also encouraging breastfeeding. The box holding all the goodies is just the right size for a crib and includes a mattress and sheets. This subtly discourages "co-sleeping"--putting the baby to sleep in bed with the parents--which has been linked to infant suffocation.

The boxes serve as an incentive to healthy parenting in another way: To claim the box, expectant moms must visit their local doctor or pre-natal clinic before the fourth month of pregnancy. Because items in the box can be handed-down to baby brothers or sisters, Finland also permits parents to take cash in lieu -- currently €140. The BBC article says 95% of parents opt for the box, however, "as it's worth much more."

Too often I've heard the jokey line, "Babies don't come with an instruction manual!" The Finnish Baby Box is better choice architecture than an instruction manual could ever be. It simply makes it easy and fun to do the right thing when it comes to parenting. They don't tell you "Statistics show you increase your baby's chance of Sudden Infant Death Syndrome if he sleeps in your bed" -- they give you a separate bed the baby can sleep in until past the age where SIDS is a problem. They don't lecture you "breast is best" -- they just don't give you baby bottles and pacifiers/dummies. They don't lecture you about reading to your child -- they give you a starter book. Since Finland began handing out its treasured Baby Boxes in 1938, infant mortality has declined from around 70 deaths per thousand to fewer than five.

But beyond just making good parenting easier, I think there's some other important psychology behind the baby boxes that could explain statistics showing Finnish mothers are among the happiest in the world. The boxes seem like Finland's cheery welcome to all its babies. This sets a loving tone for the new baby's family. The article quotes one new father:
This felt to me like evidence that someone cared, someone wanted our baby to have a good start in life. And now when I visit friends with young children it's nice to see we share some common things. It strengthens that feeling that we are all in this together.
A Finnish history expert told the BBC that the Baby Boxes are "A symbol of the idea of equality, and of the importance of children."

Thinking about choice architecture led me to a book by Robert Cialdini and colleagues, "Yes! 50 Scientifically Proven Ways to Be Persuasive." The book identifies deeper veins of influence on human behavior, and I believe some of these may be at work in the Finish Baby Box. For example, Cialdini & Co. say the most influential messages subtly convey that a desired behavior--such as breastfeeding or using cloth diapers -- is both socially prized and most prevalent for people like you. This nudge may be the most valuable gift in the Finnish Baby Box.

The work of Cialdini and his associates over the years forms a body of research -- experiments that isolate key factors that encourage people to do the right thing -- to recycle and save energy, for example. Other early studies isolated psychological principles that discourage doing the wrong thing -- like littering or theft of petrified wood from a National Forest.

Some of the other persuasion concepts in Cialdini's book might be worth another blog entry, but for now I'll end by pointing out that "nudges" can also be used for less salubrious purposes than saving for retirement, helping the environment, preserving national heritage, and improving health, nutrition, and parenting. Choice architecture could also be used to subtly influence purchasing or voting decisions, for example.

Being able to recognize the more clever, insidious ways Big Brother or Big Business may influence our decisions is empowering. Check who stands to profit when your choice suddenly seems like "a no-brainer." Look that gift-horse in the mouth! And consider the possibility you're being manipulated when a fast-talking politician or salesman claims his gizmo has impeccable credentials and is in huge demand -- whilst the competitor's is unpopular and far short of standards for people like you.

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