Feb 15, 2019
Nudges and choice architecture
are complex and advanced topics. During my master's program, I had
an entire course on choice architecture, so I'm going to break down
this foundational topic into a series. Today's behavioral economics
podcast is an introduction to nudges and choice architecture. In
each episode, I’ll share the concept and then give real life
examples to illustrate that
a choice architect whether you realize it or not, and honestly
whether you want to be or not. So, it is best to understand the
concepts. Don’t you owe it to the people you are presenting choices
to? Wouldn’t you want someone in your same position to help you to
make the best possible choice? This series is going to help you so
much in your life and business both when you are making choices and
when you are constructing them for others.
- [03:29] In its most core
definition, a nudge is a gentle touch or tap.
- [04:37] An example of nudges in
a school cafeteria where rearranging the food items impacted their
consumption by 25%. A prominent position can increase consumption
by 25% and a less prominent position can decrease consumption by
- [06:55] An excerpt from Nudge
which outlines the dilemma of where how to structure the food in
the cafeteria: 1. Arrange the food to make the students best off,
all things considered. 2. Choose the food order at random. 3. Try
to arrange the food to get the kids to pick the same foods they
would choose on their own. 4. Maximize the sales of the items from
the suppliers that are willing to offer the largest bribes. 5.
Maximize profits, period.
- [07:50] Option 1 has obvious
appeal, yet it does seem a bit intrusive.
- [08:25] Option 2, arranging the
food at random, could be considered fair-minded and
- [08:55] Option 3 might seem to
be an honorable attempt to avoid intrusion (but the test shows why
this is flawed).
- [09:44] Option 4 might appeal
to a corrupt person in the job (not us).
- [10:02] Option 5 has some
appeal, especially if we think the best cafeteria is the one that
makes the most money.
- [10:22] What would you choose?
How would you choose? This, is the burden of the choice architect.
Many of you are already choice architects and you might not even
- [11:15] There are many
parallels between choice architecture and more traditional forms of
architecture. A crucial parallel is that there is no such thing as
a “neutral” design.
- [12:33] Small and apparently
insignificant details can have major impacts on people’s behavior.
A good rule of thumb (as you have heard me say many, many times
before) is to assume that “everything matters”
- [13:16] A choice architect must
choose a particular arrangement of the food options for lunch (or
whatever choice they are facilitating) and by doing so we can
influence what people eat. We can nudge.
- [13:39] “A nudge is any aspect
of the choice architecture that alters people’s behavior in a
predictable way without forbidding options or significantly
changing their economic incentives."
- [14:15] Some of the key
takeaways from the paraphrased explanation are: 1. Everything
matters 2. There are no neutral options 3. You cannot avoid being a
choice architect – any format is influencing the choices, so it is
best to be informed 4. Nudges can help simplify complex choices and
help illogical humans make good choices 5. Nudges are not mandates
– they need to be easily avoidable to still count as a
- [15:02] Choice architecture and
nudges are very closely tied – but they are not the same
- [15:12] A choice
architect is someone who
indirectly influences the choices of other people. The
choice architecture is the mechanism you use to facilitate the
- [15:26] A
nudge is something
you would use to influence the decision.
- [16:21] An example of the
concepts using an HR department: You want to structure choices on a
form to help encourage employees to contribute to their retirement
- [18:21] The first item on the
list will have the most weight on the brain. It's best to put the
recommendation first (a nudge).
- [19:28] Different wording has
different results. Consider saying something like: “Experts
recommend contributing 15% of your salary to a 401k, how much would
you like to allocate?” (and how it differs from other
- [19:49] This example includes
framing, priming, and anchoring and adjustment.
- [23:39] For your options, you
can include several positive options (which start with the word
“yes”) and then one “no” option at the bottom. These nudgy options
remind the user of the expert recommendations. You can also prime
them to contribute at a later time.
- [24:21] Options on online
- [26:56] When used subtly,
nudges are very effective.
- [29:25] Choice architecture is
used in all sorts of decisions – from retirement plans to choosing
a flight for your next trip.
- [29:49] Proper choice
architecture and nudges can increase profitability on menus, help
people to save more for retirement, decrease infection rates and
deaths at hospitals, increase organ donations, get more money for
public parks, help people to use less energy, and more.
- [30:20] In this series, I will
be outlining choice architecture and the different types of nudges.
I will introduce the topic and then give you practical
- [31:24] There are six
categories of NUDGES: iNcentives, Understand mappings, Defaults,
Give feedback, Expect error, and Structure complex
- [33:46] Can nudges be used
outside of choice architecture or can you have choice architecture
without a nudge? Not really...for example, even if you don't put
effort into creating a nudge, there is always a default. So, it is
best to be informed and think strategically.
Thanks for listening. Don’t
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