Tag Archives: Behavioral Economics

Cases

Why do people exit the bus at the front door?

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At Quora, someone asked “Why do people exit the bus at the front door even when it’s not crowded?” It received seven answers.  

 

  1. Habit. If a bus has two doors it is actually more efficient for passengers to exit by the back door as any new passengers enter through the front door. However, most people use the front door when exiting out of habit, sometimes even walking the full length of the bus to do so.
  2. I do it for two reasons. First: I do it because I may be transferring to another bus. And believe me, getting out the back door vs. the front can make the difference between making your next bus and missing it. It happens sometimes, and i never know which time it will be. Second: I do it so I can thank the driver personally. They have a tough job. Lots of people abuse them. I like to treat them well.
  3. Because it is safer. Using a back door bears the risk that the bus driver won’t see you and could slam the door on you or depart while you are in mid-air. It has happened to me on more than one occasion.
  4. I do so mostly out of habit but also so that I can thank the driver. These women and men sometimes cop abuse that is quite unwarranted in my view. They deserve the same courtesy as everyone else and for getting me to my destination safely and comfortably. 
  5. Maybe they were closer to the front than rear. Maybe they did not feel like walking to the rear. Maybe they were unsure if the rear is crowded. Maybe they were absent-minded and accidentally took the front. Maybe they figured it doesn’t matter. There could be many ‘maybes’, all with their own reasons, only way to be sure is to ask.
  6. Handicapped people find it easier to use the front. The driver can pull closer to the curb and “kneel” the bus to make it easier for cane-users. Wheelchair-users need the ramp in the front of the bus.
  7. If they are sitting right at the front of the bus it is the closest door. It is normal to just exit at the closest door.

 

All the answers were based on the assumption that people should enter the bus at the front door. I used to have the same thought before I went to Prague and Nagasaki where the front door of the bus was designed differently.  

 

 

At these two cities, passengers get off the bus at the front door. In other words, at Prague and Nagasaki, people exit the bus at the front door not because of habit or convenience but because they are educated and trained. Something that was taken for granted to me was not to them.

 

 

 

 

Cases

A choice architecture to reuse hotel towels

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Banff Aspen Lodge has an interesting environmental incentive program. If guests stay two or more nights and prefer no housekeeping service in this hotel, it offers a choice of options for the guest’s consideration:

  • Option 1: The hotel will make a donation of $4 on behalf of guests to the Banff Community Foundation, which supports environmental initiatives in their community. To select this option, guests insert the Green Card into the entry door lock.
  • Option 2: Enjoy one complimentary beverage at the Whitebark Cafe, which is located in the lobby. To select this option, guests insert the Yellow Card into the entry door lock. A complimentary beverage coupon is delivered to the guest’s room. 

I suspect someone carefully designed a choice architecture with a psychological intervention to nudge guests to choose “No” housekeeping service. This program will be effective because…  

  1. Three options are provided (housekeeping vs. environmental 1 vs. environmental 2). It differs from the choice architecture commonly observed in the behavioral economics in which two competing options are provided. Having three options may relieve the guests’ burden, which decreases their intentions to defer choices.  
  2. Only two environmental options are highlighted. As guests read and think about “how” to protect environment, the chance they select one of the two environmental options may increase.
  3. Two environmental options reflect the two motivations why people should behave environmentally friendly; helping others (charitable giving) and helping themselves (economic incentive). 
  4. Finally, when guests select one environmental option, they do not speak or write down but simply insert a card into their own entry door lock. This simple behavior has no peer pressure. 

This environmental incentive program might be more effective than making a commitment at check-in, a scientifically proven intervention in the prior marketing paper. 

Baca-Motes, K., Brown, A., Gneezy, A., Keenan, E. A., & Nelson, L. D. (2012). Commitment and Behavior Change: Evidence from the Field. Journal of Consumer Research, 39(5), 1070–1084.

Influencing behavior change is an ongoing challenge in psychology, economics, and consumer behavior research. Building on previous work on commitment, self-signaling, and the principle of consistency, a large, intensive field experiment (N = 2,416) examined the effect of hotel guests’ commitment to practice environmentally friendly behavior during their stay. Notably, commitment was symbolic—guests were unaware of the experiment and of the fact that their behavior would be monitored, which allowed them to exist in anonymity and behave as they wish. When guests made a brief but specific commitment at check-in, and received a lapel pin to symbolize their commitment, they were over 25% more likely to hang at least one towel for reuse, and this increased the total number of towels hung by over 40%. This research highlights how a small, carefully planned intervention can have a significant impact on behavior. Theoretical and practical implications for motivating desired behavior are discussed.

Cases

A pink litter bin on the London Bridge

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River Thames flows through London. People come to the London Bridge to enjoy the river.

When I visited the London Bridge, there was a pink public litter bin in the beginning of the bridge. Many visitors stopped in front of it momentarily and threw litter away before crossing the bridge.

Although adding human faces or adding controversial messages encourages our prosocial behaviors, adding an opportunity to vote could be another effective intervention. Asking people to vote by splitting a litter bin into two sub bins looks more effective than designing a gigantic litter bin like a disposable coffee cup. I believe libertarian paternalism proposed by behavioral economists could help people behave in a better way.

Benartzi, Shlomo, John Beshears, Katherine L. Milkman, Cass R. Sunstein, Richard H. Thaler, Maya Shankar, Will Tucker-Ray, William J. Congdon, and Steven Galing (2017), “Should Governments Invest More in Nudging?,” Psychological Science, 28 (8), 1–15.

Governments are increasingly adopting behavioral science techniques for changing individual behavior in pursuit of policy objectives. The types of “nudge” interventions that governments are now adopting alter people’s decisions without coercion or significant changes to economic incentives. We calculated ratios of impact to cost for nudge interventions and for traditional policy tools, such as tax incentives and other financial inducements, and we found that nudge interventions often compare favorably with traditional interventions. We conclude that nudging is a valuable approach that should be used more often in conjunction with traditional policies, but more calculations are needed to determine the relative effectiveness of nudging.

Cases

Why are antibiotics over prescribed in some countries?

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Antibiotic prescription rate differs across countries. It is two times greater in Korea than in Norway (27.9 vs. 15.8: Defined Daily Doses (DDDs) per 1000 people per day, 2015 OECD report). Why are antibiotics over prescribed in Korea?

One reason might be that it is difficult to find traditional medicines in Korean market. In contrast, Norwegians can buy a FLU SHOT at convenience stores. It is a bitter version of Jamba Juice. It is filled with traditional medicines such as ginger, turmeric, garlic, and cayenne pepper.

If I can buy the same FLU SHOT in Korea, I may not need to see doctors often. My thought provides fresh insights into behavioral economists. In the past, how to nudge doctors not to prescribe antibiotics was studied. Now, how to nudge patients not to see doctors may need to be studied.

Reference

Meeker, Daniella, Jeffrey A. Linder, Craig R. Fox, Mark W. Friedberg, Stephen D. Persell, Noah J. Goldstein, Tara K. Knight, Joel W. Hay, Jason N. Doctor (2016), “Effect of Behavioral Interventions on Inappropriate Antibiotic Prescribing Among Primary Care Practices: A Randomized Clinical Trial,” Journal of the American Medical Association, 315 (6), 562-570.

IMPORTANCE: Interventions based on behavioral science might reduce inappropriate antibiotic prescribing.

OBJECTIVE: To assess effects of behavioral interventions and rates of inappropriate (not guideline-concordant) antibiotic prescribing during ambulatory visits for acute respiratory tract infections.

DESIGN, SETTING, AND PARTICIPANTS: Cluster randomized clinical trial conducted among 47 primary care practices in Boston and Los Angeles. Participants were 248 enrolled clinicians randomized to receive 0, 1, 2, or 3 interventions for 18 months. All clinicians received education on antibiotic prescribing guidelines on enrollment. Interventions began between November 1, 2011, and October 1, 2012. Follow-up for the latest-starting sites ended on April 1, 2014. Adult patients with comorbidities and concomitant infections were excluded.

INTERVENTIONS: Three behavioral interventions, implemented alone or in combination: suggested alternatives presented electronic order sets suggesting nonantibiotic treatments; accountable justification prompted clinicians to enter free-text justifications for prescribing antibiotics into patients’ electronic health records; peer comparison sent emails to clinicians that compared their antibiotic prescribing rates with those of “top performers” (those with the lowest inappropriate prescribing rates).

MAIN OUTCOMES AND MEASURES: Antibiotic prescribing rates for visits with antibiotic-inappropriate diagnoses (nonspecific upper respiratory tract infections, acute bronchitis, and influenza) from 18 months preintervention to 18 months afterward, adjusting each intervention’s effects for co-occurring interventions and preintervention trends, with random effects for practices and clinicians.

RESULTS: There were 14,753 visits (mean patient age, 47 years; 69% women) for antibiotic-inappropriate acute respiratory tract infections during the baseline period and 16,959 visits (mean patient age, 48 years; 67% women) during the intervention period. Mean antibiotic prescribing rates decreased from 24.1% at intervention start to 13.1% at intervention month 18 (absolute difference, -11.0%) for control practices; from 22.1% to 6.1% (absolute difference, -16.0%) for suggested alternatives (difference in differences, -5.0% [95% CI, -7.8% to 0.1%]; P = .66 for differences in trajectories); from 23.2% to 5.2% (absolute difference, -18.1%) for accountable justification (difference in differences, -7.0% [95% CI, -9.1% to -2.9%]; P < .001); and from 19.9% to 3.7% (absolute difference, -16.3%) for peer comparison (difference in differences, -5.2% [95% CI, -6.9% to -1.6%]; P < .001). There were no statistically significant interactions (neither synergy nor interference) between interventions.

CONCLUSIONS AND RELEVANCE: Among primary care practices, the use of accountable justification and peer comparison as behavioral interventions resulted in lower rates of inappropriate antibiotic prescribing for acute respiratory tract infections.

Cases

People tip more when they disagree with a statement

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Flam is a small village in Norway. Tourists who take the Norway in a Nutshell tours switch ferry boats here. A cozy restaurant called Bakkastova Cafe is located up on the hill.

 

 

This restaurant had a note at the cash register. It says, statistics say that women are tipping better than men. I added coins to the tip jar labeled men because I wanted to oppose this questionable argument. Others might tip if they support it.

 

 

This suggests that scientifically proven or well supported arguments may fail to motivate people to behave in a certain way. Rather, incomplete, controversial arguments trigger people’s willingness to speak out and may lead them to make an action. From the behavioral economics’ perspective, people’s avoidance for perfection seems to be a better nudge compared to either putting on some lipsticks to make something look like a human or painting foot prints on the street.

 

 

Cases

How to enjoy coffee more and consume plastics less?

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Taipei is hot in summer. After sweating an hour, I ordered an iced coffee at 羊毛與花 Youmoutoohana Coffee. To my surprise, it served me a glass of coffee with a metal straw. After sipping coffee through it, I became a huge fan of metal straw. This summer, I will buy and bring a few metal straws to office with me to enjoy coffee more and consume plastics less.

 

 

Someone in US also found metal straw stylish and eco-friendly. Bethany Blakeman wrote in her blog,

 

I keep these in my tote bag (if you are worried about them getting dirty, I suggest a pencil pouch), and whip them up out whenever I’m at a coffee shop. Once at Starbucks, a talkative barista commented on my straw. “Hey, I’m with you,” he told me. “You’d hate to work here. You see how wasteful people are from behind this counter.” I’ll be gifting them to all of my friends for World Oceans Day on June 8.

 

 

Cases

People tip less when the tip jar looks like a human

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Henckell is my favorite cafe in Frederiksberg, Copenhagen. It is a local place with great coffee and sandwich. I feel cozy inside. It has only four small tables.

There is a tip jar next to the credit card machine on the counter table. Interestingly, it has a smiley face, two arms, and two legs. One day out of curiosity, I kept watching how many guests tipped in this human-looking tip jar. Afterwards, I also asked a server whether guests liked it. Surprisingly, I noticed that a few guests hesitated putting coins into this jar for an unknown reason. The server even told me that not few guests complained about the tip jar because its mouth is too small to insert coins.

When human flavor is added to an object, people like the object. It is supported by academic studies about anthropomorphism. For instance, when a car is anthropomorphized and its characteristics are congruent with the proposed human schema, people evaluate it positively (Aggarwal and McGill 2007). When a garbage bin is anthropomorphized (e.g., “feed me”), people follow the message and show prosocial behaviors (Ahn, Kim, Aggarwal 2013). When an innovative, uncertain product is anthropomorphized (e.g., “this little guy”), people tend to adopt this product (Jiang, Hoegg, and Dahl 2011).

However, anthropomorphism might backfire if the usefulness of the product is sacrificed. When I come back to this cafe, I want to draw a different character with a bigger mouth and see what happens.

***

Reference

Ahn, H. K., Kim, H. J., & Aggarwal, P. (2014). Helping Fellow Beings: Anthropomorphized Social Causes and the Role of Anticipatory Guilt. Psychological Science, 25(1), 224–229.

People are often reluctant to comply with social causes because doing so may involve personal sacrifices of time, money, and effort for benefits that are shared by other members of society. In an effort to increase compliance, government agencies and public institutions sometimes employ financial tools to promote social causes. However, employing financial tools to induce prosocial behavior is expensive and often ineffective. We propose that anthropomorphizing a social cause is a practical and inexpensive tool for increasing compliance with it. Across three prosocial contexts, we found that individuals exposed to a message from an anthropomorphized social cause, compared with individuals exposed to a message relating to a nonanthropomorphized social cause, were more willing to comply with the message. This effect was mediated by feelings of anticipatory guilt experienced when they considered the likely consequences of not complying with the cause. The theoretical and practical implications of these findings are discussed.

In this study, we adopted a food-waste composting campaign. A total of 104 undergraduates (54% female and 46% male; mean age = 19.8 years) participated in return for course credit. Participants in the anthropomorphism condition were exposed to a campaign poster showing a garbage bin with humanlike features of eyes, a nose, and a mouth alongside the caption, “Please feed me food waste only!” Participants in the nonanthropomorphism condition were shown a campaign poster in which the garbage bin lacked humanlike features and was accompanied by the caption, “Please put food waste in only!”. Participants completed a measure of expected compliance with the campaign (α = .89) using response scales from 1 (very unlikely) to 9 (very likely). In addition, we employed a 4-item measure of anticipatory guilt adapted from Cotte, Coulter, and Moore (2005). The four items assessed the degree of guilt, shame, responsibility, and accountability, respectively, that participants would feel if they did not comply with the campaign and were administered with 9-point scales (α = .89).

As expected, we found increased compliance in the anthropomorphism condition (M = 6.99, SD = 1.62) compared with the nonanthropomorphism condition (M = 6.24, SD = 1.80), β = 0.22, SE = 0.34, p < .05. Moreover, anticipatory guilt was higher in the anthropomorphism condition (M = 5.16, SD = 1.39) compared with the nonanthropomorphism condition (M = 4.49, SD = 1.64), β = 0.22, SE = 0.30, p < .05, which in turn resulted in an increased level of compliance, β = 0.45, SE = 0.10, p < .001. When we controlled for anticipatory guilt, the direct effect of anthropomorphism on compliance was no longer significant, β = 0.12, SE = 0.32, p = .17, Sobel z = 2.04, p < .05, which suggests that anticipatory guilt mediated the effect of anthropomorphism on compliance. 

Cases

Chinese love plastic

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Chinese government tries hard to reduce plastic waste. Recently, it banned plastic waste import. According to financial times, half of the UK plastic waste need to find alternative places desperately.

In contrast, Chinese people seem to overuse plastics. In Shenzhen, for instance, plates are often wrapped with plastic packages. We should tear it down and throw it away. Sometimes, plastic gloves are provided at the restaurants. We wear the gloves when eating bread.

I suspect Chinese people are addicted to plastics probably because they consider plastics cleaner and safer than water or napkins. If we aim to reduce plastic consumption in China, we should consider the Chinese psychology about plastics seriously.

Cases

Do we need floor signage?

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We now see a wide variety of floor signage. In Singapore, there is a yellow-painted footstep on the right side of the paved road at the Marina Bay. Since this road is crowded by runners, this signage probably helps them run on the right side of the road.

 

 

In Shenzhen, China, there are orange-colored lines at the subway stations. Since many people are in a hurry, these lines help them not to rush forward when the train is coming, and wait for the next train if they cannot get on.

 

 

Although floor signage is visually salient, I wonder whether this is needed to change our behavior, because we learn rules naturally. We learn how to avoid bumping into other runners when running on a narrow road and we also learn how to navigate a huge crowd to get on a train. Although I am a strong supporter of behavior economics and nudge, I believe some nudges interfere with learning. Not surprisingly, some people argue that behavioral economics are not always as effective as thought (Why nudges hardly help)(The dark side of nudging). We need to study more about which specific nudges are ineffective and how we can modify these nudges.