what can behavioural insights offer? · 2018-12-07 · - the market is established, and consumer...

Corrupt, illegal and selfish behaviour. What can Behavioural Insights Offer?

Toby ParkHead of Energy & Sustainability

© Behavioural Insights ltdThe Behavioural Insights Team

Quiz

You are about to buy a new belt for $15.99, when you realise the exact same belt is available for $8.99 in another shop, 10 minutes’ walk away.

Would you walk to the other shop to get the cheaper belt?


Quiz

Table

Sit

Legs

Seat

Couch

Desk

Recliner

Sofa

Wood

Cushion

Swivel

Stool

Sitting

Rocking

Bench


Quiz

• Take a moment to write down all the words you can remember


Quiz

You are buying a new Macbook pro for $1,169. You hear that the same Macbookis available in another shop for $1,162, a 10 minute walk away.

Would you walk to the other shop to get the cheaper Macbook?

Who are we?

BIT


We aim to achieve positive social impact and design better policy by applying a more realistic understanding of human behaviour

Understanding how people perceive the world, make choices, and behave


We can improve policy outcomes by applying a more realistic understanding of human behaviour

“It turns out that the environmental effects on behavior are a lot stronger than most people expect”

Daniel Kahneman, Nobel Laureate

“The brain’s fast, automatic, intuitive approach…is more

influential [in driving our behaviour]”


For example…

Would you walk 10 minutes to save $7?

Weber-Fincher Law – We perceive magnitudes proportionally, not linearly.

Framing – we respond differently to the same choice depending upon how is it presented. Context Matters.


For example…


And do you remember….?

Table

Desk

Cushion

Sit

Chair


No ‘Chair’ here…

Table

Sit

Legs

Seat

Couch

Desk

Recliner

Sofa

Wood

Cushion

Swivel

Stool

Sitting

Rocking

Bench


We can use behavioural insights in a number of ways…

Regulation Incentives Information

Behavioural Insights

Limits choice by force of law

Limit choice by economic cost & reward

Maintains choice. Informs & persuades

‘Nudging’

Soft influence, which maintains freedom of choice but makes certain outcomes more likel


Use defaults: 10x increase in customers using renewable electricity

Introduce small frictions: 40% reduction in food waste

Harness social norms: £200 million brought forward

… and a 43% reduction in paracetamol suicides

What can Behavioural Insights tell us about corrupt, illegal and selfish behaviour?


What drives dishonest behaviour, and how do we stop it?

Rational choice model implies:

- Inherently self-interested motivations

- Benefits of dishonesty outweigh the costs

- Low risk of being caught or punished

So we should use:

- Bans and regulations, or harsh fines and penalties

- (Costs of cheating should outweigh the benefits)

- Stricter punishment and/or more auditing to increase the risk of being caught


But do bans and regulations work?

- The market is established, and consumer preference is longstanding, motivation to continue drinking is strong. People will find a way.

- Production and supply networks are diffuse, targeting enforcement is difficult.

- Legal alternatives are largely non-existent.- The activity is private, so chance of getting caught is low.

- Motivations are weak – we can easily manage without drinking straws

- Production and retail networks are tractable, enforcement is simple if levied at sellers

- Activity (selling) is largely public, lack of incentive for a black-market to emerge.

- Legal alternatives (paper etc.) are feasible

Bans ineffective Bans effective

Poaching, trading & illegal consumption of wildlife products???


So what other behavioural factors drive dishonest behaviour?

• Normalisation: “It’s acceptable if everyone’s doing it”

• Omission bias: “I didn’t actively lie, I just didn’t tell them it was wrong”

• Fudge Factor: “It’s acceptable if I only cheat a little bit”

• Categorisation: “It’s OK, it’s just a favour / gift, I’m not taking money”

• Splitting the spoils: “It’s acceptable if I shared the money”…”I’m doing it for my daughter”

• Moral Licensing: “It’s acceptable because I did something good before”…”Something bad happened to me, I’m just redressing the balance”…”I’m paid too little, I’m owed this”.

• It’s not immoral: “There’s no victim”

• Scarcity: “If I don’t cheat now, I could miss out”

• Opportunism: Dishonesty is easy, so temptation is higher

Fud

ge-f

acto

r (r

atio

nal

isat

ion

)

Many flavours of fudge


“Man is not a rational animal; he is a rationalising animal”

- Robert A. Heinlein


There is often a tension between two of our most profound motivations as human beings…

Self-interest (motivated towards enjoyable, self-

serving, profitable convenient, cheap action)

Self-enhancement (motivated towards the belief that we’re good, in the right, honest, and consistent (e.g. between our values and actions)

Cognitive dissonance

Self-serving actions: I fly on vacation, I eat meat, I drive a car, I own a large house…

Pro-social values: I care about the environment, I’m a good person, I’m not a hypocrite…

Give up the self-serving behaviours…. (yeah, right!)

Ratoionalise, deny, confabulate, license…

Give up the values (modify our beliefs to align with our

actions)


“People like to think of themselves as honest. However, dishonesty pays—and it often pays well. How do people resolve this tension? This research shows that people behave dishonestly enough to profit but honestly enough to delude themselves of their own integrity. A little bit of dishonesty gives a taste of profit without spoiling a positive self-view.”

Nina Mazar, On Amir, Dan Ariely (2008) The Dishonesty of Honest People: A Theory of Self-Concept Maintenance.

What evidence have we got of these mechanisms in the context of dishonesty?


It’s ok if I cheat just a little bit (in fact, if I’ve foregone the opportunity to cheat much more, so I’m positively saintly!)

Study 1:

• 20 simple maths problems. Self-report how many you got right.• People on average got 4 correct, but reported getting 6 correct.• 20 people (out of 40,000) were ‘big cheaters’ (claiming 20 correct)• But 28,000 were ‘little cheaters’.• 70% of people cheat a little bit.

(Ariely, 2016)



Study 2:

• Payoff depends on the number you roll on a dice: 6=nothing, 1-5 = 1-5 Swiss Francs.

• Unobserved, so cheating is easy• Would expect 1 in 6 chance (16.7%) chance

for each roll.

• Some maximum cheaters, but also many partial cheaters (claiming a ‘4’)

(U Fischbacher - 2008)



Study 3:

• We’re more likely to steal, say, a pencil than steal $0.50c to buy a pencil. ‘Categorisation’ and ‘psychological distance’ from money.

• Study used the same maths test at study 1, but with another condition: subjects earned tokens, exchanged for money a few seconds later.

• As before, most people cheated, but only a little.• Using tokens roughly doubled the amount of cheating (control group = 3.5

answers correct, treatment group = 6.2, token group = 9.4)

(Ariely, 2008)

Further relevant studies:• If top payout is for rolling a ‘3’, more people claim a ‘3’, than the number who claim a ‘6’ if payout is for ‘6’ (there’s

two ways you can cheat just a little (rolling a ‘2’ or a ‘4’), compared to one way (rolling a ‘5’).• ‘Broken’ vending machine which returns all your money – most people took a few packets of candy, but nobody

took more than 4.


It’s OK because I’m sharing the money / doing it for someone else’s benefit.

21%

43%

Not sharing Sharing with someone

Claimed to solve “unsolvable” puzzle

Wiltermuth, S. S. (2011).

“It’s for the benefit of

my family…”

“I will if you will….

(Normalisation / collusion – social licensing)

(A form of moral licensing)


Omission bias: “I didn’t actively lie/cheat, I just failed to mention it”

0.5c

5c

“Because most people can more easily estimate the number of dots on the left side” (not true)

Source Mazar & Hawkins 2015


Source Mazar & Hawkins 2015

Omission

More on the left

More on the right

More on the right

More on the left

OR

Commission

0.5c

5c

SuperCommission

More on the left

More on the right

Omission bias: “I didn’t actively lie/cheat, I just failed to mention it”


It’s ok because everyone else is doing it… / …I’m better than most people

(Gina, Ayal, Ariely, 2009)

- Cheating significantly changed when another participant (confederate) ostentatiously cheated by finishing a maths task impossibly early and claiming the maximum reward.

- Cheating increased when cheater was perceived as ‘in-group’ identity, but decreased when perceived as ‘out-group’ identity.

(Dimant, 2015)

- Anti-social (immoral) norms are more contagious that pro-social norms- This evidences a kind of ‘social licensing effect’. Bad behaviour often pays. Social expectations, peer pressure and

reciprocity ‘police’ our behaviour, but once one person breaks these norms, others in the group are licensed to act selfishly (one bad apply can ruin the barrel)



0

10

20

30

40

50

60

70

80

90

100

No graffiti Graffiti

% people litteringThe ‘Broken Windows’ Effect

Graffiti increased the number of people stealing cash from a letter box from 13% to 25%

Litter around the letter box increased stealing from 13% to 30%

Illegally locked bikes increased trespassing on private land from 27% to 87%


Scarcity effects – watch out for peak-cheating when it’s the last opportunity!

30

35

40

45

50

55

60

65

70

10th flip First 9 flips

Expect 20 flips

# flips unknown

Expect 10 flips

(Effron, Bryan, & Murnighan, 2015, Journal of Personality and Social Psychology)

*

*

% P

arti

cip

ants

Rep

ort

ing

the

Win

nin

g Fl

ip

So what can we do about it?


“Everyone else does it” (Normalisation)

Highlight the (good) social norm


Some ideas…

Overcoming the ‘fudge factor’:

“Everyone is doing it” - Publicise the true (good) social norm.

“I’m only cheating a little” – Reinforce identity of virtue (religious, civic duty, uniforms). Promote public pledges.

“It’s just a gift, not money” – create explicit rules with no ambiguity (NO business gifts accepted) / re-frame all corruption as equivalent.

“I didn’t actively lie, just turned a blind eye” – make the offence explicit, and create honesty-by-default.

Other structural and social factors:

Opportunism – add friction costs and inconvenience to the bad behaviour

Remove friction costs and hassle from whistle-blowing

Make behaviour more observable (to harness social expectation / perceived risk of punishment)


Highlight the true social norm

36%

6%

Perceived in others Self-reported

Tax avoidance

We tend to overestimate the prevalence of undesired behaviours in others.

Source IPSOS MORI and BIT 2016


We know that highlighting the positive social norms can increase compliance

Nine out of ten people pay their tax on time.

Brought forward £200m

Reuse your towel to save the

environment

35.1%Most previous

occupants of this room reused their towel at least once

during their stay

49.3%


Make the behaviour more public / observable

• Our innate tendency to conform to social norms and rules of society is the psychological driver for pro-social (moral) behaviour, incentivised by wanting to avoid social exclusion, disapproval etc.

• Therefore, we’re more likely to act pro-socially if we’re being observed, or if we make a public commitment to someone else

Donations to a national park were larger when done visibly

Payments were more honest when a picture of eyes was shown (mixed evidence)

Fake police officers can reduce traffic offences

Rare (NGO) use public pledges among fishers and mayors to tackle over-fishing & compliance with no-take zones


Most of us cheat a little bit, and rationalise this against the belief in our own integrity

Reinforce identity of virtue (e.g. national pride, duty, or religion) to reduce the amount of dishonesty which can be rationalized against it

“I’m not actively lying” (Omission bias)

Make the crime explicit, change the default (if possible), or frame it as an active choice


But what about when the desired behaviour is not strongly normative?

“Previously we have considered your failure to declare an oversight. However, if you don’t declare now we will consider it an active choice. You may therefore be audited and could face the procedure established by law.”

“According to our records, 64.5% of Guatemalans declared their income tax for the year 2013 on time. You are part of the minority of Guatemalans who are yet to declare for this tax”


Guatemala 2013 tax year? (n=43,387)

$10.08$14.59 $15.81

$20.26$23.66

$29.81

Control Original Letter Behaviouralletter

Behavioural +National Pride

Behavioural +Social Norms

Behavioural +Deliberate

Choice

Amount of tax received by letter sent (after 12 months)

Elevates honourable identity

Overcomes “everybody does it”

Overcomes “omission bias”


Reinforce virtuous identity / use moral prompts & commitments

• Before undertaking the maths tests, asked to either write down the name of 10 book they’d read (control group), or write down the 10 commandments.

• Mean claimed score in two groups = 4.2 (control) 2.8 (moral prompt).

• Successfully reduced the amount of dishonesty participants could ‘fudge’ (reconcile) against their positive self-concept (which is now more salient).

- Ceremony & ritual to reinforce identity of a profession (e.g. police)

- Uniforms (mixed evidence)

- Honestly declarations first

- Daily declarations (e.g. pledge of allegiance to the flag)

- Public commitments & pledges


Cheating is easy (opportunism)

Add in hassle (‘friction costs’)


Add frictions to the illegal behaviour

• Legislation to wear a helmet while riding a motorcycle in Germany, introduced 1980

• 60 Reduction in motorbike thefts.

• No displacement onto car or bike thefts.

• 43% reduction in paracetamol suicides after legislation to sell them only in ‘blister packs’

• Significant reductions in tax avoidance among businesses by putting lottery tickets on receipts.

Conclusions


1. ‘Rational’ self-interested behaviour is an important part of the problem, so we do need to consider bans and enforcement, incentives, and the perceived risks of being caught.

2. But these conventional approaches can sometimes be ineffective, and overlook non-rational aspects of human nature.

3. All of us cheat a bit, and ‘fudge’ (rationalise) this against our self-image of integrity. We find a balance where we can cheat enough to profit, but not so much that it threatens our ego.

4. Finding ways to remove the ‘fudge factor’ of our cheating can be effective – for example highlighting social norms, making the action explicit, or elevating our pro-social identity through moral or religious prompts.

5. Small contextual details also have a big impact – e.g. friction costs, and observability.

6. But we’ve only scratched the surface here. We haven’t talked about messenger effects; about incentives to undermine collusion and encourage whistleblowing; about education; about empathy building (e.g. identifiable victim effects); about obedience to authority; about moral psychology; etc.

what can behavioural insights offer? · 2018-12-07 · - the market is established, and consumer...

Documents