Daniel Kahneman, the psychologist who won the Nobel Prize in Economics, credits some recent public policy successes to the application of behavioural science. He helped establish this field and its “nudge” approach to changing the behaviour of large groups of people.
Nudge economics has had a profound influence, everywhere from No 10 Downing Street to the world’s largest corporations. Changes such as automatically enrolling people in pension or organ donation schemes and requiring them to opt out, rather than requiring them to opt in, change behaviour, arguably leading to positive social benefits.
Kahneman, however, is among a number of voices calling for new approaches to behavioural science that broaden perspectives in a field dominated by economics. Behavioural scientists helped move economics out of its “rational actor” rut, where the complexities of humanity were too often reduced to that of a utility-maximizing homo economicus. Now it is vital that behavioural scientists sustain and expand their openness to new influences and approaches, especially from those experienced in transcending disciplines and sectors.
Many of these approaches are emerging from university research, and pioneered by university start-ups. They are also being fuelled by the availability of increasing quantities of data on social behaviour and activities, some of it produced by social media – for example, the analysis of Twitter feeds or information from health- and fitness-measuring devices. The need to provide policy-makers with clean, structured and linked datasets has led to a greater role for data scientists, improving opportunities for quantitative analysis in the social sciences.
A visual showing the difference between nudges, regulations and marketing.
Since the early 2000s, the idea of “nudging” behavioural change has become widespread. There are many examples of how insights from academics – most notably Richard Thaler and Cass Sunstein’s bestselling 2008 book Nudge: Improving Decisions about Health, Wealth and Happiness – have encouraged people to make better choices for themselves and society. The UK government formed its Behavioural Insights Team, also known as the “Nudge Unit”, in 2010, headed by the psychologist David Halpern. Successes in improving social policy outcomes and cost-effectiveness led to a growth in demand for advice in other countries and the Team recently became independent, working in partnership with the UK government’s Cabinet Office while providing advice to policy-makers in the US, Singapore, Australia and New Zealand.
Questions have arisen about how valuable this approach is when attempting to change the behaviour of large groups of people and dealing with highly complex problems. New ways of nudging are being explored, involving deeper insights from psychology and using the opportunities of novel digital technologies. Here, new start-up companies are offering research-based solutions to problems as diverse as saving Australia’s Great Barrier Reef and encouraging healthier eating among UK supermarket shoppers.
Many previous approaches to nudging favour problems characterised by single choices or events, such as picking a salad over a cheeseburger in a school canteen or completing a tax form, where there is a specific group to be addressed – students or taxpayers – and a single strategy to bring about change, e.g. a different tax reminder that stimulates a better response. Variants of these efforts to change behaviour are tested by randomised control trials, and often have clear and usually economic measures of success. These constraints limit the applicability of the nudge approach to large complex problems, where solutions are likely to be multilayered and trials aren’t always feasible.
Environmental threats
Take the case of the world’s largest reef system, the Great Barrier Reef, which is roughly the same size as Germany and home to more than 1,500 species of fish. The Reef is under extreme threat from climate change, and also fertilizers, pesticides and herbicides in run-off from farms and cane growers in the adjacent hinterland.
Using psychological insights from behavioural science, a university start-up, Behaviour Innovation, is changing the practices of the cane growers and improving the quality of the water flowing into the sea. The company started by recognizing how behaviour unfolds in a system of influences, including the individual, their social group and the broader socio-geopolitical system. Its research found that cane farmers were very keen to adopt changes that improved water quality, but existing government schemes blamed them for their practices, questioning their identities and professionalism as farmers. They were also poor at keeping records, which constrains behavioural change. Based on their scientific research, Behaviour Innovation has introduced a number of positive reinforcement strategies, leading to the much greater adoption of practices of immediate benefit to the Reef.
Tackling obesity
Nearly 60% of European men, and two out every three American men, are obese or overweight, with severe consequences for their health through increased incidence of cancer, coronary artery disease, diabetes and strokes. This public health crisis, which affects men and women, young and old, invites innovation in our approach.
DNA Nudge is a university start-up using a nudge method to improve the eating of supermarket customers. Using expertise in DNA testing, health and medicine, engineering and data science, it aims to nudge grocery shoppers into making healthier food purchases. It offers a proprietary, nutrition-focused genetic test to learn more about how each individual metabolizes food. Via an app, users can find comprehensive explanations of each of the genetic traits they have been tested for, along with personalized food product assessments and recommendations. By simply scanning the barcode of a food or drink product in a supermarket with a mobile phone, the app instantly shows whether it is a good match for each individual. The company’s database contains more than 190,000 products and 12,000 brands to choose from. Every time an item’s barcode is scanned, a proprietary algorithm takes into account thousands of parameters in order to make an instant recommendation.
The app can be personalized, so if users wish to avoid any ingredients (such as gluten, artificial colours and sweeteners) it will suggest suitable alternatives. Progress in building healthier habits can be tracked weekly, monthly and yearly, and algorithms nudge users if they are purchasing too many unhealthy foods and too few healthy ones. It’s compulsive, and uses “gamification” to make healthier behaviour enjoyable. The company is using an individualized solution that adds collectively to dealing with a major social problem.
But does even this advanced approach go far enough? Obesity is a deeply complex societal problem, driven by economic and cultural expectations, inequality, rural-urban divides, city design and regional diets, among many other complicating factors. No app or clever policy intervention can offer a universal solution.
Such multifaceted social and environmental problems need a variety of approaches, or experiments, to seek solutions that often involve changing the behaviour of large groups of people. Universities provide many of the scientific options with the potential to assist. As with the cases of Behaviour Innovation* and DNA Nudge, university start-ups can provide the mechanisms for translating scientific knowledge into practical solutions.
Universities have assisted the development of both companies in other ways. Behaviour Innovation has relied on dozens of psychology student interns from the University of Queensland to conduct its research and develop its services, some of who become full-time employees upon graduation. DNA Nudge benefited from a consulting project by students on Imperial College London’s MSc in Innovation, Entrepreneurship & Management. The student team identified, investigated and evaluated several potential strategies for the company’s product features, pricing models, distribution channels and promotional activities, and making recommendations.
The nudge approach, initiated by psychologists and now associated with economists, is extending in exciting new directions. University research and spin-offs are at the forefront of this movement. Using insights from psychology and data science, we are arriving at new ways of amending the behaviour of large groups of people and improving social and environmental outcomes.
Behavioural science has had a decade in the spotlight, and it is only just getting started. It has the potential to make us all healthier, wealthier and happier. If the field remains open to new influences, especially those emerging from university spinouts, its future is bright.
Mark Dodgson and David Gann are the co-authors of The Playful Entrepreneur, forthcoming from Yale University Press.
* Mark Dodgson is also a member of the Board of Behaviour Innovation.
