Forgetfulness is a killer. Literally. So is procrastination. And that’s not just a bumper sticker slogan. Here’s a real example: Colon cancer is the second deadliest cancer in the United States, killing approximately 50,000 people a year. Government scientists estimate that if everyone who was advised to get a screening—a colonoscopy—actually did so, nearly 19,000 of those deaths could be avoided.
But the fact is that people put things off, they forget, they try to ignore what they’re afraid of—and a colonoscopy is something most anyone would dread. How do you change that very human behavior?
Professor Brigitte Madrian found that sometimes a sticky note helps. Madrian, Aetna Professor of Public Policy and Corporate Management, and a group of researchers were able to persuade four companies working with a health care communications provider to test new ways of motivating people to receive treatment. Nearly 12,000 mailers of two kinds were sent out to company employees who were due for a colonoscopy. Both kinds included a sticky note and an explanation of how it could be used to remember. One group received a blank sticky note. The other received a sticky note that read: “Don’t forget! Colonoscopy appointment” and had two lines below the message. The first had the word “With” and a blank space for the doctor’s name; the second had the word “On” and a space for the date and time. (All the mailers included the same information on insurance coverage and, where applicable, the name of a doctor the recipient could contact.)
Those small, low-cost reminders had a large impact: People who received the sticky note with the message on it were 16 percent more likely to undergo a colonoscopy.
The experiment worked in several ways: cognitively, by associating a future cue (the appointment date) with a plan of action (the visit to the doctor); logistically, by encouraging recipients to generate a solution (making the appointment and the arrangements for the visit) to a practical problem; and mechanically, by creating a visual reminder that would probably be kept (a blank sticky note is more likely to end up in the trash than one with information on it).
The sticky note, in other words, helped people battle forgetfulness and procrastination and perhaps helped some of them receive life-changing medical treatment.
In academia, that sticky note is known by the more formal name of an implementation intention, and it resides in the rapidly expanding field of behavioral economics and decision science research. Increasingly, in fields including economics, psychology, political science, law, and business, academics are trying to understand the limits of human rationality, how we really behave, and how that behavior can be affected.
“How we decide,” explains Iris Bohnet, professor of public policy and academic dean at Harvard Kennedy School, “often determines what we decide.”
Last fall, Harvard Kennedy School created the Behavioral Insights Group (BIG), an initiative that will bring together Harvard’s unique collection of scholars working in these fields. Co-chaired by Bohnet and Max Bazerman, Jesse Isidor Strauss Professor of Business Administration at Harvard Business School, and undertaken in collaboration with Harvard Business School and Harvard University’s Foundations of Human Behavior Initiative, BIG will help connect scholars and practitioners with the ambitious goal of helping people make better decisions.
The potential policy applications are limitless, in areas including health care, education, personal finance, gender discrimination, national security, sustainable development, and the practice of democracy.
Madrian’s work on implementation intentions, for example, builds on behavioral insights similar to those in the work of Todd Rogers, assistant professor of public policy at Harvard Kennedy School, and Bazerman on procrastination and the distraction of instant gratification. Rogers examined the power of implementation intentions in the context of election participation when he looked at whether voters would be more likely to vote if they were encouraged to make a plan. Last year, Rogers’ work was incorporated into electoral strategy at the national level.
Bohnet, also working with Bazerman, examined the role stereotypes played in decision making and found that when evaluators compared job candidates with one another, they were more likely to choose on the basis of an individual’s merit and performance rather than his or her demographic characteristics. That approach is now being considered by the British government as a way of combating gender discrimination.
“Our vision,” Bohnet explains in a document outlining BIG’s scope, “is that the core lever we have to improve the world is to improve the quality of decisions that we make.”
Limits of Rationality
Behavioral economics and decision science research (and their close relatives in other fields, such as behavioral finance, behavioral law, and behavioral marketing) grew out of a recognition of the limits of rationality. Those limits had long held sway in the field of economics, where the idea of a hyper-rational person ruled. But two intellectual developments in particular helped launch scholars in a new direction.
In the 1950s, Herbert Simon, a political scientist, developed the concept of bounded rationality—the idea that although people attempt to be rational, they often fail, because of cognitive or other limitations, such as time constraints. In the 1970s, Daniel Kahneman and Amos Tversky, both psychologists, developed the systematic and predictable ways we deviate from rationality.
Harvard Kennedy School founding fathers Howard Raiffa and Tom Schelling, who explored the power of decisions through their work in decision analysis and game theory, also directly influenced scholars like Bazerman and another BIG member, Richard Zeckhauser, Ramsey Professor of Political Economics at Harvard Kennedy School.
Although Simon, Kahneman, and Schelling would go on to win Nobel Prizes in economics, their theories took time to penetrate the world of economics and policy, where they were viewed with suspicion.
“At that time,” Madrian recalls of her first forays into behavioral economics, in the late 1990s, they were “still an ugly stepchild.”
Her work on savings helped change that.
“I was trained as a ‘bread and butter’ economist,” Madrian says, “and I was working on a project looking at the savings choices individuals were making in their employers’ sponsored savings plans. It was clear that traditional factors that economists looked at mattered, but that there was a lot of behavior you couldn’t explain with a traditional economic model but you could explain if you incorporated some psychology.”
Madrian’s insight was that although people weren’t taking advantage of employers’ generous savings offers, if they were automatically enrolled in a plan, as opposed to being asked to “opt in,” savings rates almost doubled. Those findings were incorporated into U.S. pension legislation in 2006 and have since influenced similar changes in other countries.
The increasing maturity of scholarly work in the behavioral sciences has also coincided with the popularity of books such as Nudge, by Cass Sunstein, of Harvard Law School, and Richard Thaler, and Thinking Fast and Slow, by Kahneman, boosting widespread interest in the field. Media attention has also focused on the use of behavioral insights in politics. Rogers’s work in that area was adopted widely by President Obama’s winning reelection campaign.
Many behavioral economics fixes are extremely cost-effective—an important consideration for cash-strapped governments. From the voter turnout techniques developed by Rogers to the sticky-note prompts studied by Madrian, the techniques are virtually costless.
The Behavioral Insights Group was born from the realization that at the Kennedy School in particular and Harvard University in general there is now a critical mass of people eager to organize something around the research themes that tie them all together.
The initiative, which is still being developed, is headed by Bohnet, and Harvard Kennedy School professors Madrian, Rogers, and Zeckhauser. Bazerman and three other Harvard Business School professors, Francesca Gino, Leslie John, and Michael Norton, and Harvard University economics professor David Laibson (a coauthor with Madrian on the colonoscopy and savings studies) complete the team.
Aiming to use behavioral economics and decision science to develop socially beneficial solutions to important problems, the group will collaborate with practitioners to design new ideas.
People from government or the corporate world will be invited to workshops that address specific questions using behavioral and decision science. Ideas will then be tested, either by implementing them in the organization involved or by studying them in the laboratory (using the Harvard Decision Science Laboratory and the HBS Computer Lab for Experimental Research), where researchers can determine the scalability of ideas.
The first workshops are tentatively planned for fall 2013. But with the field moving so quickly, the researchers are also likely to find their ideas being adopted faster than they could have imagined.
David Halpern, director of the Behavioral Insights Team for British Prime Minister David Cameron, is helping seed government in the United Kingdom with behavioral economics nudges.
A former academic, Halpern visited Harvard in October to study developments in the field. He believes the value of institutions that can bring academia and practitioners together should not be underestimated.
“Bridge institutions are clearly important,” he said of Harvard and other places where solutions are being developed.
Britain has adopted the automatic enrollment savings plans suggested by Madrian’s work, and Halpern is also now looking at Bohnet and Bazerman’s work on hiring to help increase the representation of women at higher levels of government and business. That work arose from a combination of interests: Bazerman’s in the role of joint decision-making in making more-ethical decisions, and Bohnet’s in decision-making and gender equality.
Influenced by Sunstein and Thaler’s nudge concept, Bohnet and Bazerman began approaching gender discrimination as they would any other decision-making shortcut (or heuristic). Providing decision-makers with the right “choice architecture,” a concept pioneered by Sunstein and Thaler, they looked at ways to provide employers with a hiring process that could minimize gender stereotypes.
Their research, which culminated in an experiment at the Harvard Decision Science Laboratory, showed that when evaluators were presented with a single candidate, they were much more likely to resort to stereotyping—for example, choosing a male for math tasks and a female for verbal tasks, regardless of individual performance in those areas. But when employers were given several candidates to compare, stereotypes hardly mattered at all.
While many of the behavioral scientists deal with decisions taken at the individual level—a single person deciding to vote, or a single employee opting into a savings plan—they have large aggregate results.
Zeckhauser looks forward to focusing on how collective, societal decisions are made.
“I would like to worry about lots of things, apart from nudges, where we see society making systematic errors,” he says.
Why does society find it so hard to do something about global warming? Why were there so many regulatory failures on the road to the financial crash in 2008?
“We’re thinking about these issues, many of which involve low-probability, high-consequence events,” Zeckhauser says. “Societies are very bad at dealing with them—in part politically, but in part because of things that afflict individuals and organizations when they try to make decisions.”