23 july 2013, nudge, nudge

A few years behind those really ahead of the curve, I am getting my head around the application of behavioural psychology in public policy, or the nudge as it is popularly known. Why go to the trouble, expense and civil rights borderlands of troublesome law or regulation when a gentle application of science can sometimes have an equal effect. I want to be a choice architect. The examples are many, such as the changed wording of a letter that raised success rates 15% (in that case by suggesting paying tax was the norm); restaurant menu items at the beginning or end became more than twice as popular when put in the middle. My favourite is probably the hershey bars (p15), which were sold for 1 cent, compared to lindt chocolate, for 15c; 73% chose lindt. However this revealed preference was turned on its head when both prices were dropped by 1c, i.e. the hershey became free. Then 69% went for hershey. "Most transactions have an upside and a downside, explains the author, dan ariely, but when something is FREE! We forget the downside." There may be big lessons here for our free public services. How would charging £1 to go and see the doctor affect demand ? Having said that, some people genuinely can't afford a pound.