Your Brain on Design
As a designer I have been obsessed with the topic of Behavioural Economics ever since being introduced to the work of Dan Ariely, founder of the Center for Advanced Hindsight at Duke University.
What Hurts More?
When Dan Ariely was a teenager he was burnt over 70% of his body by a magnesium flare accident. He spent the next three years of his life in the hospital. The worst part of his day was the process of removing his bandages. The nurses would just rip them off quickly to reduce the amount of time he had to endure the pain. However, with a reduction in time came an increase in pain. He asked if they could try taking the bandages off slowly over a longer period of time, to give him breaks to rest. The “expert nurses” felt that they knew what was best and told Dan “No, faster is better.” Dan thought it was strange that the nurses, who had never had the actual experience of having bandages ripped off of their burnt flesh, would think that they knew best. This experience inspired Dan to study irrational human behaviour. A field of study called he coined Behavioural Economics.
When Dan became a full time researcher, he didn’t have any funding to conduct a big fancy study, so he went to the hardware store and bought a carpenter’s vise. He invited people to come to the lab and stick two fingers into the vise where he would slightly crunch peoples fingers for different durations, different patterns, and different intensities etc. He learned that those nurses were wrong in systematic and predictable ways. According to his study the most prefered way to deal with pain was to lessen the intensity by increasing the duration. Basically most humans prefer a longer period of slight pain to short intense periods of pain.
Unlike regular Economics—which assumes everyone makes rational choices about life, money, and such — Behavioural Economics is the study of the areas and reasons we are constantly making irrational choices.
Dan and team run a called the Matrix Experiment. Participants are asked to take a quiz of 20 simple math problems. All of which are very solvable IF you had plenty of time. However, they only give you 5 minutes to complete the test. You are told that for each correct answer you will be given a dollar. When time is up you correct the test yourself. Then you put the entire test with the number of correct answers into a shredder. You step to your right and verbally report the number of correct answers and are given one dollar for each correct answer, and then you leave. Once all of the participants shred their tests, get paid and leave, the folks who administered the test walk over to the shredder and pull out the mostly not shredded test papers. The shredder is rigged to only shred the very sides of the test, but the participants think the whole thing is shredded. The study administrators then look to see how many questions folks actually got right versus what they reported. The average reported number of correct answer given by a participant was six out of 20. The study found that the average of actual correct answers out of 20 was 4. Over 40,000 people have participated in the Matrix Experiments; nearly 70% of that 40,000 cheated. They found that 20 of those 40,000 were BIG cheaters and stole around 400.00 by lying and saying they solved all 20 of the questions. Yet it was the 27,000+ “little” cheaters who ended up stealing about 50,000 dollars.
What is most interesting about this study is that it seems to coincide with the real world. Big cheaters exist, but they are very rare and because of that their overall economic impact is low in context. Conversely the impact of little cheaters create a huge economic impact. Insurance fraud is estimated to be at around 40 billion a year. Healthcare scams cost the U.S. government 200 billion a year. The IRS estimates that the American taxpayers (Individuals and organizations) cheat the government out of 15% of it’s yearly tax revenue. 15% of 3.18 trillion dollars is a whole lot of scratch.
So why should this area of study be of any interest to designers? Da-doy!
Designers should be deeply interested in learning all they can from folks that study Behavioural Economics because we are constantly making calls on what people generally do or don’t do, what is easy or hard for people to do, or in some cases divine what somebody might or might not do. Some of these questions are can be answered by experienced designers because they have tried things, tested them and learned from them. However, a great majority are left to use our best guess based on experience and we rely on our rational brains to make those best guesses. The study of Behavioural Economics teaches us that only relying on a rational mind set, can lead us to a flawed solution. Why, because people don’t automatically make rational choices. In certain situations most humans make irrational choices. Being aware of these situations and the research, puts you in a very strong position to design solutions which take the reality of irrationality into account.