(Nudging As Part Of Behavioural Economics Cont. 7)
Links between Heuristics and Nudging, ie heuristics are nudges
| Heuristics*i*ii |
Nudging |
| 1. Anchoring & adjustment | Using known/comparable facts & adjust to get to estimate or decide about something which is unknown, ie comparing, then guessing from that subjective reference point |
| 2. Availability | How common or visible or familiar or popular something is perceived to be, ie base for trust/credibility; the greater this perception (common, visible, familiar, etc) results in greater perceived frequency or incident; can be different from reality; this can be linked with a greater sense of trust in the validity of the thing or communication; heuristics is greatly influenced by mass media; tendency to strongly influence perceived credibility; we hear/see something a lot, the less we question it, ie actually means perceived frequency, commonness and familiarity, ie popularity, etc This can operate in reverse, perceived uncommonness or rarity can produce perceptions of low popularity, low credibility and distrust plus unreliability |
| 3. Representativeness | How a similar thing is thought to be in relation to a perceived stereotype or assumption; people use heuristics frequently in making assumptions, ie comparison based on (often unreliable) stereotypes; stereotyping and comparision |
| 4. Optimistic/ overconfident | The tendency to underestimate costs, timescales, challenges and over-estimate rewards and the ease of unknowing things; under/over-estimation or complacency, etc |
| 5. Loss aversion | The tendency for people to value possessions far more than if the things were not yet possessed - creating resistance to giving any sort of concession or making a change; people do not like to lose possession of things, irrespective of their value/importance, ie holding onto things/resistance, status quo bias, inertia, etc |
| 6. Status quo bias & inertia | The tendency for people to stay committed to current situations; fear of changing to the unknown; status quo bias can be linked with laziness, aversion to complexity, unfamiliar learning style demands, etc, ie inertia, default to no action, etc |
| 7. Framing | Presentation orientation of information that modifies its perceived nature like positive/negative accentuation, juxtaposition, association, or many other ways of distorting the attractiveness/un-attractiveness of something, ie orientation, accentuation, presentation, styling, etc |
| 8. Temptation | Greed, inability to delay gratification, thirst to satisfy aspiration, ego, etc; people are naturally biased in favour of short-term rewards rather than long-term wards or perceived low returns; WIIFM (what's in it for me), ie greed, ego, short-term reward, etc |
| 9. Mindlessness | The tendency for people to form views and decisions without concentrating or even succumbing to negligence, the perceived free or discount effect which can cause people to ignore the real issues, ie negligence, avoidance, not concentrating, etc |
| 10. Self-control strategies | Tactics used by people to counter their heuristic weaknesses, which then also become heuristics, ie habits, routines, etc to counter weaknesses, etc |
| 11. Conforming | The mob affect; need for affirmation; avoid risk/embarrassment; strength/safety in numbers; follow the crowd/herd; fear of isolation, etc; many cultural, socio-economic/demographic factors can impact; use of digital technology can magnify these, ie mob instinct |
| 12. Spotlight effect | People tend to over-estimate the visibility/significance of their own decisions and actions; this can produce unhelpful pressure on thinking and influence decision-making, ie anxiety, pressure, 'everyone watching me', fear of making errors, etc |
| 13. Priming | People are primed or softened/hardened before a situation or option is introduced; extends to enabling visualisation of a point of view or feeling, ie the ways people can be made ready or prepared before thinking by role modelling, building belief, offering methods not just directions, etc |
| 14. Language & signage design | Sometimes called 'stimulation response compatibility' or 'choice architecture'; refers to the degree to which something is designed in a way that helps us understand and make the best responses to it, like 'go' is usually green, not red, ie overlays other heuristics and nudges; the designer signage, language, etc is carefully crafted so that it seems appropriate for the message it conveys, etc |
| 15. Feedback | Part of choice architecture; people are open to influence from feedback or reflection when thinking and deciding, ie overlays other heuristic and nudges; it allows people during and after thinking/decisions to make required adjustments, etc |
| 16. Positioning | Moving things, prominence |
| 17. Limiting | Expiry dates, limited stock |
| 18. Sympathy | Ease of adoption, path of least resistance |
| 19. Accessibility | Efficiency of communications, reach, penetration |
| 20. Likeability | Trust, reputation, credibility, honesty, integrity of 'nudger' |
| 21. Relevance | Fit with audience needs, self-image, situation |
| 22. Mood-changer | Inspiration, passion, flair, integrity, humour |
| 23. Fear | Thinking driven by risk or threat |
| 24. Facilitation | Helping people to think and decide |
| 25. Sensory | Sound, music, smells, touch, colour |
(for more detail, see elsewhere in the Knowledge Base)
(source: Businessballs, 2023)
Notes
i) Heuristic = tendency for human to think and decide instinctively and often mistakenly, ie 'a rule of thumb'; refers to internal references and responses that tend to be personal, emotional, subjective and instinctive
NB Heuristics can be used in different ways to influence people.
ii) the first 15 heuristics are from Richard Thaler and Cass Sunstein as found in Businessballs, 2023 and the next 10 are from Businessballs, 2023
Some examples of heuristics associated with availability
- the visibility of homicides in the media gives the impression that murder is more prelevant tham suicides; yet suicides are considerably more common than on homicide.
- people are far more cautious when taking a plane journey than when crossing a road or driving a car; yet these last 2 are statistically far more dangerous than taking a plane journey.
- billions of people continue to drink too much alcohol yet would not use an ecstasy tablet; yet thousands die every day from alcohol-related diseases, while deaths from ecstasy tablets is statistically insignificant.
(main source: Businessballs, 2023)
NB "...people often assess likely outcomes based on a false perception of actual facts, statistics..."
Businessballs, 2023