Science of Nudge: How Simple Changes Can Drastically Improve Our Decisions About Health, Wealth and Happiness
In 2008, Richard Thaler and Cass Sunstein made the famous Nobel-Prize winning case for nudge theory drawing from a wide range of research areas from psychology to economics to politics to marketing to help people and governments make better decisions for themselves. Since then, their research has been applied in real life in a variety of ways that have worked wonders for many individuals and societies. This post aims to discuss some of the cool and mind-boggling examples of nudge in real life, and how we can all benefit from this new yet growing field where simple changes make all the difference.
According to Daniel Kahneman, humans are fallible creatures. And because they are fallible, they are not always good at making the best decisions for themselves.
In the iconic book, Thinking Fast and Slow, we learn that human decision making can be impacted by small little things from attention span, to mood, to surroundings, to peer pressure and to a host of other quadrillion reasons.
And it’s because of that, that the idea of nudge becomes so important as a little helping hand to guide us out of our immediate dispositions and think in our true best interest. To understand nudge:
Consider the following thought experiment.
You have a friend called Cassy. Cassy is the director of food services for the local school cafeterias. One day, Cassy gets an interesting idea. She wants to see if changing the arrangement of food items in her school cafeterias would have any impact on the choices schools kids make when putting food on their trays. So she devises an experiment in different schools, with the same menus and food quality, but different arrangement of food in the cafeterias. For example, in some schools, French fries were placed first, in other carrots. In some schools, desserts were placed first, and in others last.
What do you think would have happened?
As expected, the school kids would be much less likely to pick unhealthy food items if you simply changed the order of food in the cafeteria. So what’s the lesson? That school kids, just like adults can be greatly influenced by small changes in the context in which they make decisions.
The interesting thing is that the thought experiment above has been done in real life in a public school in Corning New York. The school had two lunch lines, one of them was re-arranged, and it was found that the purchase of healthy foods in the new line increased by 18%.
In another experiment, also in New York, the department of health paired with economist Brian Wansink to study why school kids were not eating more fruits during lunchtime from the school cafeterias. When Brian studied the school cafeterias, he found that in most schools, fruits were displayed in steel bins in dimly lit corner of the canteens. So he decided to improve the display of the fruits. He put the fruits in a nice wire rack under a desk lamp and according to him, ‘Sales of fruit in one school went up 54 percent. Not in a semester: (but) by the end of the second week.’ In yet another experiment in school cafeteria, simply changing the food labels, for example from ‘vegetable soup’ to ‘rich vegetable medley soup’ led to an increase in the sale of the more healthy options.
Note here that these techniques are not new or unique. Supermarket chains and grocery stores have been using these techniques for decades to get people to buy more of a certain thing. For example, there is a reason why bread and egg section is at the last in many grocery stores so that you wander the whole store first before buying what you are looking for and in the process, you end up buying much more than you initially intended, something that’s also known as ‘impulse buying.’ (Pro tip: always make a grocery list before going in to buy your groceries. This helps you stay focused on what to buy and you don’t waste your time wandering here and there which is the sure-shot recipe for impulse buying). But these very same techniques can also be used to make people choose better for themselves. For example, in snack shops of train stations in the Netherlands, when fruit and healthy options were placed near the cash register where they were easily seen, consumers naturally purchased more of those items.
The basic philosophy of nudge theory is that even small and apparently insignificant changes can have a drastic impact on the decisions people make in their everyday lives. The mantra is “everything matters” no matter how small or ridiculous it is. This means that everything can be used to make people better or worse off.
In a cool experiment, the staff at Schiphol Airport in Amsterdam was tired of the mess on the floors of men’s urinals, so they decided to etch the image of a black housefly into each urinal. It turned out that men usually did not pay much attention to where they aimed, which often created a mess on the floors, but if they saw a target, their attention and hence their accuracy increased. According to Aad Keiboom who came up with the idea, this tiny and simple change ‘…improves the aim. If a man sees a fly, he aims at it.’ The experiment found that etching in urinals reduced the spillage in men’s washrooms by 80 percent.
Everything matters.
Speaking of etching images, it’s been shown that donation boxes receive much more money if you paste the image of eyes near the donation box. Just the ‘presence’ of eyes subconsciously affect people to put more money in donation boxes because they get a feeling of being watched. Similarly, people are much less likely to litter on a road about two thirds less if the nearby wall has a pair of eyes.
Talking about subconscious, there has been an experiment done with music and wines in which four French wines and four German wines were put on display. When a stereotypical French music was played in the store, people were more likely to buy French wine by a factor of 3:1 and when German music was played, people purchased German wine by 2:1. At the end of the experiment, when people were asked why they purchased a particular wine, only 1 out of 44 people said that their choice of wine was impacted by the music being played.
Subconscious is more powerful than people think.
Consider the experiment where mere exposure to the scent of an all-purpose cleaner makes people keep their environment cleaner while they eat. Or consider the experiment where people’s judgements about strangers are impacted by whether they are drinking iced coffee or hot coffee. Those given iced coffee are more likely to see other people as more selfish, less sociable, and, well, colder than those who are given hot coffee. Again, the subconscious is more powerful than people think.
It has been shown for example, that slow music makes people stay longer in a given store, and not just music, but visibility, lighting, wall colours etc. all impact people’s behaviour in some way or the other. Many people are using this knowledge to design their workplaces or homes in a way to improve their productivity and focus. Nicole Stillings, for example, is a music director who creates playlists for offices and corporate spaces to improve mood, productivity and teamwork among workers.
Similarly, lighting can be used in a number of nudgy ways. White light, for example, has been shown to increase alertness and suppress melatonin production in the body which regulates the cycle of sleep and therefore white light is better suited for use in workplaces and offices whereas yellow light is better suited for spaces like homes and bedrooms where you want a laid-back environment.
Once again, everything matters.
And according to nudge theory, the ‘everything’ is so powerful that it should always be used to make people better off and never worse off, which leads us to the political view of ‘libertarian paternalism’ which is a mix of libertarianism or ‘free to choose’ and paternalism which according to nudge theory is a method ‘to influence choices in a way that will make choosers better off, as judged by themselves.’
Now many libertarians believe that ‘people should be left on their own’ and that they should be given as many choices as possible, their assumption being that what people end up choosing is the best for them. But nudge theory argues that people are not always rational in the choices they make. They suffer from many ‘heuristics and biases’. And therefore a nudge is sometimes required as a helping hand which according to Richard Thaler and Cass Sunstein, ‘alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not.’
Putting the fruit at eye level counts as a nudge. Banning junk food does not.
Now. There are two central concepts in nudge theory: the default bias and temptation which are crucial for us to understand if we want to introduce meaningful nudges in our lives.
The Default Bias
According to the default bias, people tend to stick to the default option when choosing in a situation. It’s also known as inertia. A good example of this is when you buy a new cell phone. Most people have the option to change wallpaper, ringtone, and caller settings when they get a new phone, but most people tend to stick to ‘default’ setting which is set by the manufacturer. This is why most iPhone users have the all-familiar ‘iPhone ringtone’ and Samsung users have the default ‘Samsung’ ringtone even though they have the option to change or customize their ringtones.
It’s the power of inertia in real life.
Another example of this is when you subscribe to an email newsletter. It often happens that you don’t want the email newsletter any more, but to unsubscribe, it takes you a number of steps, so what you do? Yeah, you just ignore the emails you don’t need rather than going out of your way to unsubscribe the newsletter. I had an old Facebook account, and I still receive emails from that account, and that was five years ago, which means that for five years, I had not bothered to ‘unsubscribe’ or turn off the notifications for my account which makes me believe in the power of inertia more than anything else.
But the power of inertia has many serious consequences for people and society.
For example, in pension savings, most people can’t log in every period to renew their pension plans, so the Danish government made pension on ‘auto-renewal’ as the default and according to the tax records, the accounts on auto-renewal did much better than manual-renewal because it took into account the power of inertia that people have who have to go out of their way every period to sit, log on the site, and go through the long often technically complex process to renew their pension.
Another example of inertia is organ donation. In the U.S people have the option to ‘opt-in’ to donate their organs when they die. But since the default option is ‘opt-out’ most people never bother to go out of their way to actually ‘opt-in’ to the organ donation program. Whereas in Spain, the default option is ‘opt-in’ that means people are automatically going to donate their organs once they die and to opt-out of that, they have to go out of their way to sign up for the ‘opt-out’ option in the program. This seemingly small and insignificant change has made Spain one of the largest exporter of organs in the world whereas the U.S suffers from a chronic shortage of organs for its health and transplant needs where it’s believed that 1 in 33 people die every day for lack of organs.
All of this because of a simple ‘default’ bias.
It turns out that changing the default often works wonders. For example, Pichert & Katsikopoulos found that a greater number of consumers chose the renewable energy option for electricity when it was offered as the default option. Similarly, more people sign up for 401(k) retirement plan when the company makes the option the default.
Another philosophical wisdom of nudge theory is that since ‘Choosers are human, so designers should make life as easy as possible.’ This means that designers or choice architects should carefully decide the default option so that people are better off rather than worse off. This could mean making auto-enrollments in retirement plans, health plans etc the default option.
Humans make mistakes. A well-designed system expects its users to err and is as forgiving as possible.
The reason people go with default options is because choosing defaults take much less cognitive energy as opposed to choosing other options where you have to consciously think and evaluate and therefore use up precious cognitive energy. As Daniel Kahneman puts it, ‘Laziness is built deep into our nature.’
If you think about it, on a more personal level, the power of inertia or laziness plays a key role in habit-making. The reason why all great sages and achievers from Gautam Buddha to Aristotle, from Bruce Lee to Benjamin Franklin, from J.K Rowling to Stephen King emphasized the role of habits is because a habit makes something ‘the default’ in our brain which means it becomes naturally easy to do that thing kind of like an ‘autopilot’ where you don’t have to exert any force or think about what you are doing.
A cool demonstration of a real-life nudge involving the power of inertia or consistent habit is birth control pills. You know when the birth control pill came around, you were supposed to take the pill in your ovulating weeks and skip the pills in your mensurating week but since there was a gap of a week because of mensurating days, most women would forget to take the pills or their habit would break, because the gap of a week would break their inertia. So the manufacturers decided to introduce placebo pills and made the birth control pack for a whole month that we have today all so that women would stay consistent in taking the pills without any breaks. In other words, the birth control manufacturers harnessed the ‘power of inertia’ to get women to stay on track with their pills and hence made their lives many folds easier.
Power of inertia is linked with habits whose importance can’t be emphasized enough.
Contrast this with trying to do something on ‘will power’ alone. Doing things on will power takes a lot more cognitive energy because you have to go against your inertia to do that thing. The psychologist Roy Baumeister and his colleagues have done extensive research on the limitations of will power and self-control. Consider the following passage from Thinking Fast and Slow.
Baumeister’s group has repeatedly found that an effort of will or self control is tiring; if you have had to force yourself to do something, you are less willing or less able to exert self-control when the next challenge comes around. The phenomenon has been named ego depletion. In a typical demo thypical denstration, participants who are instructed to stifle their emotional reaction to an emotionally charged film will later perform poorly on a test of physical stamina — how long they can maintain a strong grip on a dynamometer in spite of increasing discomfort. The emotional effort in the first phase of the experiment reduces the ability to withstand the pain of sustained muscle contraction, and ego-depleted people therefore succumb more quickly to the urge to quit.
And that’s why you should never rely on will power to reduce weight or to quit smoking or to write more or whatever it is that you want to do.
You need a nudge which can come from in many ways. You can try the 5-second rule championed by Mel Robbins as a start, or you can try Stickk.com which is a website that helps you achieve your goals by holding you accountable every week; failure to achieve your set goals can result in a penalty in terms of money of any amount of your choice. The book, Atomic Habits by James Clear has also got some interesting insights on how to build good habits which usually is the hardest part out of all.
The runner in Bojack Horseman puts the wisdom of habits in beautiful words: ‘It gets easier. Every day it gets a little easier. But you gotta do it every day. That’s the hard part. But it does get easier.’
Temptation
The second most important concept in nudge theory is temptation.
Thaler gives a personal example of this when he invited some guests to a dinner party. As a starter, he placed a large bowl of cashew nuts in front of the guests. But within a few minutes, it became clear that the bowl of nuts would get finished soon because his guests just could not get themselves to stop crunching the cashew nuts in front of them even though they knew that eating a lot of nuts would not leave room for the dinner afterwards. So Thaler had to remove the bowl of cashew nuts from in front of the guests and put it in the kitchen so that it was out of sight.
Note that the guests had the option of eating and not eating the nuts when the bowl was in front of them. I mean, they had ‘free will’ right? A rational decision for them should have been to not eat the nuts, or eat a few nuts. But that’s the thing. We are ignoring the fact that the guests were humans. And humans are prone to temptation.
To better understand temptation, we should first acknowledge that people’s state of arousal varies over time. In other words, people have two kinds of states: hot and cold. When someone is hungry and they are smelling aromas of delicious foods, they are in hot state. Their judgement or rational judgement will be impaired when they are trying to decide how much to eat. But when someone is in a cold state, let’s say they just had their breakfast, they can rationally calculate how much they should be eating for the day. The thing is we can’t ignore the hot state or the judgements people make in their hot state which is crucial to better understand people in general. A good example of this is the planning fallacy in which people wrongly underestimate the amount of time they need to complete a certain task. When people are in their hot state, they can be extremely short-sighted about what or how much they can achieve. The irony of this is that I myself succumbed to the planning fallacy when guessing how much time I needed to write this post which makes me wonder that when we are in cold state, we often think we can do superhuman things without taking into account that we can fall prey to distractions, laziness, hang-ups, and other million things that we tend to fall prey to.
Couple temptation with inertia and you get humans to behave in irrational and mindless ways. And this has long-reaching implications for nudge theory, for the decisions people make regarding their health, wealth and happiness.
It’s been shown for example that people eat more when they are given larger plates, or when they keep food in close proximity in their homes or offices let’s say as display on the front table and not away from immediate sight. People would literally eat as much as possible as long as it’s in front of their sight, then whether it is a whole bowl of cashew nuts or stale popcorns, they don’t care.
Consider the following experiment:
A few years ago, Brian Wansink and his colleagues ran an experiment in a Chicago movie theater in which moviegoers found themselves with a free bucket of stale popcorn. (It had been popped five days earlier and stored so as to ensure that it would actually squeak when eaten.) People were not specifically informed of its staleness, but they didn’t like the popcorn. As one moviegoer said, “It was like eating Styrofoam packing peanuts.” In the experiment, half of the moviegoers received a big bucket of popcorn and half received a medium-sized bucket. On average, recipients of the big bucket ate about 53 percent more popcorn — even though they didn’t really like it. After the movie, Wansink asked the recipients of the big bucket whether they might have eaten more because of the size of their bucket. Most denied the possibility, saying, “Things like that don’t trick me.” But they were wrong.
The same is true of soup. In another Wansink (2006) masterpiece, people sat down to a large bowl of Campbell’s tomato soup and were told to eat as much as they wanted. Unbeknownst to them, the soup bowls were designed to refill themselves (with empty bottoms connected to machinery beneath the table). No matter how much soup subjects ate, the bowl never emptied. Many people just kept eating, not paying attention to the fact that they were really eating a great deal of soup, until the experiment was (mercifully) ended.
The solution?
As the marketing professor Pierre Chandon puts it: ‘Just changing the amount of food on plate or the location of food — without necessarily educating people about nutrition content or convincing them that they should eat healthy — is the most effective intervention because you don’t need to rely on changing people’s beliefs or their goals’
Using smaller plates, portion sizes, not keeping tempting food in the refrigerator are good places to start. Keeping sodas and drinks outside refrigerator un-chilled can reduce your consumption of unhealthy drinks because who wants to drink un-chilled sodas or drinks?
Similarly, keeping your phone out of sight, like in a drawer or cupboard during work can reduce your temptation. In fact, I learned a very good and practical example of a nudge from a friend who had a habit of cigarette smoking. That person decided to quit smoking, and the first thing he did was to stop keeping cigarettes with him all the time, which means when he felt the urge to smoke he had to go around asking people potentially strangers for cigarette. This significantly reduced his amount of smoking because he made it difficult to have access to cigarette in his immediate environment.
You remember McDonalds used to famously ask people if they wanted to supersize a meal — an effective tactic. Interestingly, the opposite also works. A study set in Chinese restaurant had waiters ask people if they wanted to downsize their side dishes. 33% of the customer took them up on the offer saving themselves an average of 200 calories per meal.
The interesting thing about temptation is that it is contagious. It can be passed on from one person to the next.
This is not a surprise as we are often influenced by people who are not trying to influence us. Research has shown for example that you are more likely to be obese if your friends are obese. A good nudge then could be to make friends with thin people. It has also been shown for example, that when you are with your friends, you tend to eat more. It’s called social eating. And so eating alone can also help you control your calorie intake.
On average, those who eat with one other person eat about 35 percent more than they do when they are alone; members of a group of four eat about 75 percent more; those in groups of seven or more eat 96 percent more.
There are however some gender differences. For example, women tend to eat less when they are out with a date. The opposite is true for men.
…every day we are influenced by people who are not trying to influence us.
The fact that we are easily influenced by other people can be both bad and good. While it may seem like a bad thing that we are conforming social animals, but the same fact that we are conforming social animals can also be used to influence us for the good.
A good example of this is the experiment conducted by officials in Minnesota about encouraging people to pay their taxes. It was revealed that people don’t pay their taxes when they believe that other people don’t pay their taxes. But if you tell people that ‘90% of people in your area pay taxes’ they are more likely to comply and pay their taxes because of the power of conformity.
An interesting point to note here is that the power of conformity worked much better than fear of punishment or legal/financial consequences for not paying taxes which tells us something really important about human tendencies.
Reward for conformity often works much better than punishment or negative reinforcement. A hardcore example of this is the problem of alcohol abuse by incoming college students.
A survey by the Harvard School of Public Health found that about 44 percent of college students engaged in binge drinking in the two-week period preceding the survey. This is, of course, a problem, but a clue to how to correct it lies in the fact that most students believe that alcohol abuse is far more pervasive than it actually is.
Since college students are influenced by their beliefs about what other college students do, and hence alcohol abuse will inevitably increase if students have an exaggerated sense of how much other students are drinking.
To solve this problem, the public officials in Montana ran a large scale educational campaign which stressed upon the fact that the majority of Montana students don’t drink.
One advertisement attempts to correct misperceived norms on college campuses by asserting, “Most (81 percent) of Montana college students have four or fewer alcoholic drinks each week.” Montana applies the same approach to cigarette smoking with an advertisement suggesting that “Most (70 percent) of Montana teens are tobacco free.” The strategy has produced big improvements in the accuracy of social perceptions and also statistically significant decreases in smoking.
Similarly, the power of conformity has also been used to decrease household energy consumption. For example, in San Marcos, about three hundred households were informed about their weekly energy use along with a report on whether they were doing above average or below average as compared to other households. It was revealed that in the following weeks, the above-average energy users significantly decreased their energy use but the downside was that the below-average energy users also significantly increased their energy use because the below-average users felt as if they had ‘more room’ to consume energy because they were already using less energy. A quick around to this problem was to only send the report to above average users, and not to below-average users because as it turns out when people are told they are doing good, they seem to turn complacent pretty quickly.
Nevertheless, social nudges can be used in everything from stopping people from littering, to increasing voter turn out, to get people to save more all by simply indicating that others are doing the same.
Another pretty component of social nudging is priming.
Priming is that magical process where you can get people to do something by doing nothing but simply indicating that thing or asking them about it. For example, in surveys, simply asking people whether they intend to buy a car or not, increases the chance of them buying cars.
Priming is the reason that reminders and to-do lists etc. work well because they indicate to people what they intend to do.
But sometimes reminders and to-lists can backfire. For example, if making to-do lists make people feel a sense of achievement, then they are less likely to do the actual thing they were supposed to do. So nudges about to-do lists and calenders have to be careful.
Nudges about warnings and reminders should be careful too. For example:
Our laptops warn us to plug in or shut down when the battery is dangerously low. But warning systems have to avoid the problem of offering so many warnings that they are ignored. If our computer constantly nags us about whether we are sure we want to open that attachment, we begin to click “yes” without thinking about it. These warnings are thus rendered useless.
Millions of people on the planet struggle with obesity, other millions struggle with kicking addictions, and some other millions struggle to save money for rainy days.
They all could benefit from a little nudge which is designed in a way that makes the desired choice as easy to choose as possible, and the undesired choice difficult to choose.
For example, when it comes to washing hands a lot of people seem to be negligent because of their laziness which often leads to the spread of infections through public places; often times the note ‘Please wash your hands’ does not work, so a smart nudge could be to use the ‘decoy effect’ which means to offer an alternative choice that looks worse than the desired choice, for example when the sale of an item says ‘Not $100 but only $80’ more people are going to think they are getting a better deal when you place a bad choice together with a good choice; similarly when it comes to washing hands, researchers in the US and China tested whether they could use this effect to get workers to wash their hands more often. For this, they placed a sanitizer spray on their work desks and a separate sanitizer bottle next to the spray on half of the desks. The decoy was that it was inconvenient to use the bottle in comparison to the spray so workers automatically resorted to use the spray more often as it seemed ‘more easy’ and as many as 70% of them passed the sanitary requirement. (*Note the ‘statically significant’ figures used in most academic research are not always rigorous)
The whole idea of nudge is to design choices keeping in mind that the ultimate choosers are humans. And their ‘humanness’ cannot be discounted when it comes to making policies or designing individual routines or plans for improvement. For example, when making plans or schedules, we should take into account our ‘humanness’. Setting goals like ‘Be a millionaire by 30’ are utterly fruitless according to nudge, a better goal would be, ‘Save at least XYZ next month.’
Hence the nudge method can be rightly called ‘human solutions’ for the myriad problems that we face. Once again, reiterating the wise lines of Thaler and Cass:
Humans make mistakes. A well-designed system expects its users to err and is as forgiving as possible.
Finally, the examples discussed in the post are just a tiny portion of what was discussed in the original book, Nudge: Improving Decisions About Health, Wealth and Happiness which is a truly life-changing and mindgasmic read along with the intellectual masterpiece Thinking Fast and Slow.
