Human, all too human

“It has been said that man is a rational animal.
All my life I have been searching for evidence which could support this.”
Bertrand Russel

 

nudgeThis title borrowed from one of Nietzsche’s masterpieces captures it quite well. Findings in the field of neuroscience, behavioural economics and psychology, overturned the paradigm that conceived humans as rational calculators, as classical economics posits. More realistically, in everyday life we mostly make choices that are not rational at all. Studies on the structure of human psychology demonstrated the presence of several psychological errors that lead people to commit mistakes in their judgements and actions. Particularly, we use mental short-cuts (heuristics) that enable us to function effectively and to respond rapidly to the environment, however this entails not always making the best choice. In fact, in our everyday lives we can struggle with self-control, we do not think in the long-term,  we can be overly optimistic, we procrastinate, and so on.

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Counting calories in Japan: a health-nudge to take the stairs.

Developed by Cass Sunstein and Richard Thaler, the approach of Choice Architecture describe the ways to influence people’s decisions. Nudges are the tool to apply these findings. Nudging is the use of polite, non-aggressive interventions in the social environment, that are designed to guide people’s behavior. In other words, it is a form of minimalist intervention to steer people towards a better decision-making by presenting choices in different ways. Nudges gently orientate people towards healthier, more sustainable, more rational behaviors. For instance, a number of nudges have been successfully experimented in different countries to increase energy conservation or organ donation; to reduce plastic bags usage or food waste; to fight obesity, and more.

For instance, as Sunstein (2013) elucidates, many obstacles lie in between humans and pro-environmental behavior. In relation to climate change, people assess risks using the ‘availability heuristics’ hence evaluating the probability of harm by associating it with the more ready examples that come to their mind. Our attention tends to focus on risks with an identifiable cause, and on more immediate hazards rather than long-term ones. For these reasons, it is harder to fuel public outrage and a sense of urgency in relation to general appeals of ‘climate change’.

Reducing complex concepts to provide accessible information is one of the tools in the box of a choice architect. In 2010, the US Environemental Protection Agency and the Department of Transports (DoT) decided to revise the fuel economy and environment labels that will appear on new vehicles. The new labels provide the public with information on the vehicles’ energy use, fuel costs, and environmental impacts. People are equipped with very practical information as labels display the annual fuel costs, an estimate of the costs over five years, a smog rating and a greenhouse gas rating on a 1 to 10 scale. Simplification of information is a nudge that support consumers concretely to understand how much they can save if they make choices oriented at energy efficiency.

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Different outcomes can be achieved by making small changes in context or by framing choices in different manners. The use of small economic incentives enters in the picture. The District of Columbia (US) undertook several efforts to reduce the use of plastic bags. Initially, one approach was a bonus of five cents to be given to clients that brought a cloth bag to the supermarket, but overall, this input was ignored. Thus, the new approach imposes a tax of five cents on clients that ask for a plastic bag. Taking advantage of behavioral economics and the concept of loss aversion (another heuristic), the second approach proved to be much more effective in plastic use reduction.

Sources

Thaler Richard H.,  and Cass R. Sunstein (2008) Nudge: Improving Decisions About Health, Wealth, and Happiness.

Sunstein Cass R. (2013) Simpler: The Future of Government.