Behavioural economics and public policy
Professor Michael Hiscox [from Tamworth], Thursday 9th March 2017
- He is Director of the Behavioural Economics Team of Australian Government (BETA)
These recollections are based on my personal notes, mistakes are my mine. My comments added in [square brackets]
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Application for behavioural economics is policy [I thought it would be a logical fit for digital service delivery including form design]
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Some Govt. departments have had behavioural economics in house for a long time. ATO, DHS, PMC (NSW) since 2013
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BETA is a joint initiative of 19 Govt. Agencies
BETA aims to:
- Build capability via training
- Testing (randomised controlled trials)
- Bridging the gap between APS and academia
[do they cover design and intent?]
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Behavioural economics came about as reaction to traditional economic models which viewed humans as:
rational, selfish robots that made optimal decisions. -
The implications of this model was that the best way to influence behaviours was with simple policy tools like:
financial incentives -
Modern behavioural economics (See Richard Thaler and Cass Sunstein, Daniel Kahnman, Amos Nathan Teversky, and Dan Ariely)
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Humans are predictably irrational [hat tip to Ariely]
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They make use of mental short cuts (heuristics) which involve the following factors:
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Cognitive limitations (For example Your App makes me Fat / Kathy Sierra 2013)
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Cognitive bias (See Cognitive bias cheat sheet / Buster Benson 2016)
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Imperfect self-regulation
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Multiple motivations, social norms, and altruism
Some examples of human default settings and tactics to influence them
| Human characteristic | Tactic to influence |
|---|---|
| Present bias | Commitments, and planning prompts |
| Loss aversion | Focus messaging on costs |
| Status quo bias | Improve defaults and allow opt outs |
| Cognitive limits | Reminders, checklists, and advice |
| Self control | Lock boxes |
| Implicit bias | Blind reviews |
| Social norms | Reference points and rankings |
| Altruism | Focus on impacts for others |
- Nudges – to change behaviour
- How they work - Start with an analysis of behaviour, then shape choice architecture
‘All the complexity is in the design work’ [Glad to see I can agree with this]
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Explained the difference between social and market capital with a Dan Ariely example – including the child care pick up time – honour (social) vs fine (market) systems
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[I think there is big opportunity to align policy and service design. Need to do the hard work to make sure the design intent is sound. Also I think there is a lot we can learn from the bad guys who have been working in this space for ages. Like gambling and pyramid scheme organisers. See Chris Nodder's excellent evil interaction design book and/or the dark patterns web site]