Week 6 Decision Making & Changing Behavior
Overview of Behavioral Influences
Follow-up on Cialdini's work on influence.
Focus on encouraging behavior change and better decision-making.
Two key books: Thinking, Fast and Slow by Daniel Kahneman and Nudge by Richard Thaler and Cass Sunstein.
Both authors are credible, Nobel Prize winners in Economics.
Their work is based on solid experimental results, unlike many self-help approaches.
Nudge is more accessible compared to Kahneman's dense writing.
Key Concepts in Behavioral Science
Dual System Model of Thought
System 1 (Fast thinking):
Automatic, instinctive responses (e.g., pulling back from heat).
Functions rapidly without conscious thought.
Influenced by emotional reactions.
System 2 (Slow thinking):
Rational, deliberate decision-making.
Requires more cognitive effort (e.g., solving mathematical problems).
Cognitive Biases
Mistakes made unconsciously during judgment; associated with both modes of thought.
1. Framing
The way information is presented affects decision-making.
Example: Surgery decision framed positively (90% survival) versus negatively (10% mortality).
People accept surgery more readily when framed positively.
Important to frame questions carefully, especially in surveys or organizational communication.
2. Loss Aversion
People fear losses more than they value equivalent gains.
Study Example: Coin toss with potential loss of €100 or potential gain of €200 indicates losses must be twice as significant to motivate risk-taking.
This bias explains decisions in contexts like sports (e.g., golfers putting under pressure).
3. Anchoring
Initial exposure to a number or concept influences future decisions.
Experiment: Students who saw the number 90 guessed Gandhi's age at death higher than those who saw 20, demonstrating how anchors affect judgment.
Common in sales, where high initial prices anchor perceptions of value.
4. Sunk Cost Fallacy
Continuing to invest in a decision based on prior investments rather than future value.
Example: Investing further in a failing venture to avoid losing initial money.
5. Availability Heuristic
Decisions influenced by recent information or experiences.
Example: Fear of flying after hearing about a recent crash increases car travel, leading to more accidents on the road.
Choice Architecture
Presented by Thaler and Sunstein in Nudge.
Individuals who organize choices impact decision outcomes (choice architects).
Supermarket shelf placement impacts buying behavior, leveraging eye-level display for products.
Strategies for Encouraging Change (Based on Switch by the Heath Brothers)
1. Direct the Rider (Rational Brain)
Persuade with logical arguments, but knowledge alone is insufficient.
2. Motivate the Elephant (Emotional Brain)
Engage emotions to foster commitment (e.g., emphasize job security linked to cybersecurity).
3. Shape the Path
Make desired behaviors easier through environmental changes.
Example: Remove temptations (e.g., avoid passing a donut shop to prevent impulse buys).
Practical security measures: Use fobs instead of keypad codes to control access more securely.
Experiments Demonstrating Behavioral Change
Popcorn and soup studies illustrate how portion sizes influence consumption (larger containers lead to larger consumption).
Selecting products: Fewer options lead to higher sales (jam experiment with 6 vs. 24 jars shows less choice leads to more purchases).
Storytelling as a Persuasion Tool
Springboard Stories personalize messages, leading to stronger emotional connections.
Example: A story about a child needing surgery led to immediate public response and change in healthcare policy.
Effective in cybersecurity: Show real examples of attacks to emphasize the need for security measures.
Conclusion
Understanding behavioral influences can significantly enhance the effectiveness of communication and decision-making strategies.