Nudges, understanding the architecture of decisions

A school principal conducted an experiment in the cafeteria to analyze the behavior of her students and induce them to eat a healthier diet. An introduction to nudges, and decision architecture…

A school principal wanted to improve her students’ diet. Hence, she decided to study their behavior when ordering at the school cafeteria. Keeping the menu constant, the principal began to introduce modifications in the way the dishes were presented. Desserts were sometimes displayed at the entrance to the cafeteria. In other cases, at the back. Sometimes, at eye level. Other days, below. 

After a few months, she reached some strong conclusions. A simple reorganization of the order in which the dishes were presented made it possible to increase, or decrease, consumption by 25%. Offering fruit first increased the chances that students would follow a healthy diet. 

At a more general level, the experiment indicated that small changes in context could cause large changes in behavior. 

In the same way as the previous case, and leaving children aside, when the plates in a restaurant are larger than usual, the diners eat more than if the plates were small. And the distribution of the dishes on the menu, what appears on the first page and what on the last, how the options are combined, etc., also impacts the consumption that is actually going to be made. 

These examples are used by Richard H. Thaler and Cass R. Sunstein to illustrate the concept of nudges, in their book Nudge: Improving Decisions about Health, Wealth, and Happiness. 

A nudge is a factor that alters human behavior, even if the subject is not aware of its effect. The interesting thing is that they can be developed intentionally to induce people to make better decisions. For example, granting incentives and presenting the information in an appropriate way. 

By virtue of this quality, the “makers” of nudges, such as the school principal, are called by Thaler and Sunstein, “architects of decisions.” Through proper design of the decision situation, they can bias us in the direction they prefer.

When is a nudge needed? 

When making decisions, human beings tend to make systematic errors caused by biases in our interpretation of situations.

Nudges can be of great help in very complex or infrequent decisions, as they can facilitate the decision process. 

The State can use nudges to condition citizens to make better decisions, for example, in the case of public health. In public places such as squares, items for physical exercise are usually offered free of charge. This is a nudge that gives people a “little push” to perform a healthy activity they might not if they didn’t have the incentive. The State does not choose for the people. It is only trying to influence them to choose a worthwhile activity. 

A company, for its part, can influence customers’ decisions through specific actions on its products (putting certain products on the shelves at eye level and leaving others more “hidden”), its advertising (using celebrities, even if they have nothing to do with the product in question), and even modifying its website (giving greater visibility to certain purchase options, based on the behavior that user has previously had).

Creating a nudge in our business sector requires very detailed knowledge of decision processes. The architect must know who the decision maker is and what are the mechanisms they set in motion. By doing so, they will be able to plan the best way to present the options, building mechanisms to guide the decision maker towards a beneficial alternative. This implies facilitating the decision task, minimizing time, or maximizing the impact on the results.

In short, just as the school principal used a nudge in the dining room to improve her students’ diet, companies, government and even our families become the architects of our decisions. 

The fact is that our decisions depend, in part, on ourselves. And partly, on how they have been designed and presented. The order of the alternatives, the differences between them and other data of the architecture generate an impact, in one way or another. Therefore, thinking about how a decision will be presented in the organization is a decision in itself that must be carefully planned.

Florencia Lasa
Director at Tandem.

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