How to sell a book to a room full of economists…

November 21, 2013 by
Filed under: Social Brain 

… and to non-economists, too.

A few weeks ago I attended a launch for the book Behavioural Public Policy. The book, a collection of academic papers with considered responses from other academics, is edited by Adam Oliver, and is born out of the suite of seminars he ran at the LSE (London School of Economics) in 2011.

BPP book

The book launch, held in the LSE’s impressive Shaw library (similarly inspiring as the RSA’s Great Room), comprised an introduction from Adam and some short reflections from Julian Le Grand, Lord Gus O’DonnellDrazen Prelec, and George Loewenstein. The RSA’s Social Brain Centre explores how a better understanding of human nature can be used to help address some of the challenges of our time, so a book about behaviour and policy sits nicely within our reference library. Here are some highlights of the evening:

Understanding behaviour is key to effective government policy

Kicking off the reflections, Lord Gus O’Donnell began with overwhelmingly positive praise for behavioural economics, explaining that in his view it is the biggest thing to happen to public policy in 30 years.  (Despite all this positivity, Lord O’Donnell said he is working with Angus Deaton to investigate the question “when does an RCT go wrong?”).

In a very entertaining way of bringing theory to life, O’Donnell went through each of the components of MINDSPACE to demonstrate how the environment and situation were working to subtly influence our decision about whether to buy the book. For example, looking at the messenger effect, if Adam were to praise the book we would know that he has a vested interest, whereas since Lord O’Donnell was praising the book we can trust his endorsement. Incentives were of the standard economic type: the book was on sale at a special discounted price for the event. But our drive to avoid anticipated regret makes the limited-time discount all the more powerful. In terms of commitment, we had all already chosen to attend the event and made the effort to get there; remaining consistent with this commitment by buying the book would be a natural next step. And in my favourite example, for the affect component Lord O’Donnell pointed out that we had all been served wine.

Nanny state

Julian le Grand continued by summarising some of the key concerns about using behavioural science in policy, namely, that it could be seen to infantilise people, and, referring to the famous Titmuss paper about blood donation, that it is not always obvious how people will respond to incentives.

Better than psychology or just a tempest in a teapot?

Drazen Prelec continued the conversation with a very balanced view of the impact of behavioural economics. On the one hand, “behavioural economics is a tempest in the economics teapot”, in that it is (simply) a deviation from a point of view (the point of view of neoclassical economic theory). He explained that some of the insights from BE are really just a restoration of common sense. But on the other hand, some important findings have emerged and these insights would not have been available if the researchers were not “already marinated in the economics way of thinking”. In this sense, behavioural economics has something different to offer than does psychology.

Prelec offered three aspects of a Nudge approach that should be carefully taken into consideration as it becomes more widespread: transparency (of the nudgers’ interests), accountability for the outcome (is the nudger or the nudgee to blame for a failed intervention?), and neutrality (i.e. what values underpin the ‘neutral’ default option?).

No substitution

George Loewenstein finished off the evening with his forecast about what will happen now that behavioural economics is becoming less niche and more mainstream, extending beyond academia and now into policy making and elsewhere. Echoing an earlier op-ed piece in the New York Times, Loewenstein asserted that the role of BE is to augment or increase the power of traditional economics. There is a risk that some people have seen it to be a substitute, rather than a complement, to standard econ theory.

Here he quoted Colin Camerer about neuroeconomics with an absolutely brilliant line, and applied the sentiment to behavioural economics: “the problem isn’t that we are overselling it; the problem is that it’s being over bought”. Loewenstein praised the Behavioural Public Policy book for avoiding the over-selling and offering instead a balanced view, and ended by stating his optimism that the field will work together with – not in opposition to – traditional economics.

Even-handed discussion

What was great about the event is also what seems to be refreshing about the book: even-handed and thoughtful discussion about both the benefits and the limitations of behavioural economics, instead of an all-out love-fest. Although I readily admit to being one BE’s loudest cheerleaders, I appreciate that to understand its strengths, one must also understand its weaknesses.

Having attended nearly all of the Behavioural Public Policy seminars that Adam Oliver hosted, the chapter headings are no surprise to me. But the book includes responses to the papers and I expect will be more developed than the seminars, so I am glad that I was there to get a copy and to chat with fellow BE-enthusiasts. And in any case, recalling Lord O’Donnell’s comments, the launch provided entertaining insight into how behavioural science is used in practice – to flog books!

 

A version of this blog was originally posted here on 5th November 2013.

A discount code for the book Behavioural Public Policy is available here.

Nathalie Spencer is a Senior Researcher in the RSA’s Social Brain Centre.

Comments

  • MatthewMezey

    It sounds like this needs to be on my pile with Kahneman and Nudge – still not quite got through either of them though… ;-)

    But I see one possible massive flaw in these Nudge-style Behavioural Policy initiatives: because they don’t appear to involve any Psychographic segmentation (into values, motivations, Kegan stage, whatever…) of their target groups they will never be able to spot that their nudges systematically work well for certain segments, but have the opposite effect on other segements.

    This was a point made by The Campaign Company team to the Parliamentary inquiry into Behaviour Change.

    Here’s a snippet from an unpublished text – ‘Taking Nudge beyond one size fits all – How Nudge is held back by its static view of human nature that overlooks developmental diversity’ – that I once wrote about this:


    The Campaign Company believe government behaviour change strategies will have limited success in the absence of good segmentation via developmental diversity, such as the Maslow-based model they use: “To run effective social marketing campaigns, accurate targeting and segmentation – with the power to understand the different motivational triggers for different groups – is the nirvana that always seems just out of reach” (‘Memorandum by The Campaign Company’, Written evidence from witnesses A-C, 2010, inquiry into the use of behaviour change interventions as a means of achieving government policy goals, House of Lords Select Committee on Science and Technology, p. 123).
    A recent post by Charlie Mansell on The Campaign Company blog (‘Public Health White Paper – Do “Nudges” have their own Values?’, 30/11/2010, http://thecampaigncompany.wordpress.com/2010/11/30/public-health-white-paper-do-nudges-have-their-own-values/) subjects to a similar analysis probably the best-known Nudge of all: the small black fly etched on every urinal at Schiphol airport – positioned to encourage urinating men to aim for the spot that most reduces spillage.
    “Based on substantial values analysis dating back 38 years, whilst ‘Outer Directed’ males would see the fly as a clear target, would all ‘Inner directed’ males with benevolent or universalist values do the same?”, Charlie writes.
    “Would those with Sustenance and Safety values see the fly as dirty and to be avoided at all costs?”, he wonders.

    To elaborate, I suspect that the kind of heuristics, framing effects etc that Kahneman talks about in ‘Thinking Fast and Slow’ will have a very different effects as a person grows from, say, King and Kitchener’s 2nd stage of ‘Reflective Judgement’ maturity (a model of how cognition changes as people grow) to their 7th stage of ‘Reflective Judgement’ (aka ‘passionate
    knowers’, perhaps of the RSA ilk!).

    Does Reflective Judgement stage level loosely predict the
    kinds of cognitive short-cuts etc that a person is most likely to use, I wonder?

    For instance, Kahneman talks about how our decisions are often driven by a very non-deliberative ‘Affect Heuristic’ – ie where we are guided by feelings of liking or disliking, with very little reasoning. He says we have an inability to acknowledge the extent of our ignorance about the world.

    He says the ‘slow’/rational/System 2 brain has a ‘positive test strategy’ whereby it looks for confirming evidence, in order to test a hypothesis

    But I can’t help thinking that, say, level 7 or Reflective Judgement is far more able to avoid just being led by the ‘Affect
    Heuristic’, that it is far more able to acknowledge its ignorance about the world (and is even driven by an awareness of its ignorance), that is actually much keener to look for dis-confirming evidence that previous stages might be.

    Prof Robert Kegan – who gave an excellent lecture here at
    the RSA in May – makes it very clear that he’s found that his Self-authoring (Level 4) folks indeed tend to seek confirming evidence, and rather ignore the rest – whilst Self-transforming
    (Level 5) minds are much happier to integrate, and seek out, disconfirming evidence (these are the people who can successfully work with ‘Wicked’ issues, he argues. We ought to be working out how to increase the numbers of people
    with this capacity!).

    My suspicion is that Kahneman’s social psychology experiments just miss all these developmental stage differences, and miss how particular heuristics might wax and wane in people as they grow up. (When you don’t do long-term longitudinal studies, the changes I’m talking about are hard
    to spot and understand – and Social Psychologists don’t do such studies).

    And I’m not convinced by Kahneman’s view that these kinds
    of differences are explained away by differences in the amount that people have practiced – surely a rather reductionist-style Behaviourist or Social Learning approach.

    I was hoping we’d got to something more sophisticated
    than that model of human nature by now…

    Matthew Mezey
    (RSA Online Community Manager)

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  • MatthewMezey

    When I raised my concerns with a Fellow who’s an expert in this area – Ellen Pruyne FRSA (she used to be Prof Kegan’s research assistant) this is what she told me:

    “About ‘Reflective Judgment’ and heuristics or cognitive
    shortcuts, I suspect that the answer is that heuristics do change as someone develops their capacity for reflective judgment. I’m not sure anyone has done any research on this topic as I have not kept up with the literature. But it makes sense that people at earlier stages would depend on heuristics that allow them to reach a decision or judgment quickly and move into a state of certainty that they cling to, whereas in the later stages they would depend on heuristics that allow them to entertain and hold multiple viewpoints and yet still make a decision they can live with under the circumstances. It’s also likely that individuals at later stages have developed the
    ability to entertain ambiguous or uncertain situations without
    finding them as threatening or stressful, and to feel less cognitive fatigue in responding to such situations. There would definitely be reframing involved, which at some point would likely be unconscious and automatic.

    Those are my suspicions but I can’t say I know the latest
    literature. Just some thoughts that may be of some help.”

  • Nathalie

    Thanks for the thoughtful comments. It’s an interesting hypothesis, and one which I haven’t seen studied or tested. Matthew, you and I have discussed this idea previously, and perhaps we need another opportunity to chat about it again – maybe there is a research project in here somewhere, exploring whether there is any correlation between extent of reliance on automatic (vs deliberative) thinking and adult developmnet stage (eg Kegan’s http://www.rsablogs.org.uk/2013/socialbrain/searching-hell-mental-complexity-wellbeing-bobs-big-idea/). It would be a fun project! :o)

  • MatthewMezey

    Hi Nathalie,

    Perhaps a project on this between the RSA Social Brain Centre, Nudge Unit, Campaign Company, Cultural Dynamics/Pat Dade would be a good idea?

    It seems fairly important to work out whether these kind of Nudge-like interventions are systematically underperforming (or having the opposite effect, with some people), because they ignore difference between Psychographic segments.

    I think a lot of people would like to know the answer to this – and might fund it (eg Futerra might help: http://www.futerra.co.uk/blog/redefining-consumer-demand).

    We could just ask Pat Dade if he is interested, for a start…

    Matthew