The most successful products of the digital revolution, principally those with social media components, have mirrored and exaggerated our ancient mental response mechanisms. With the coming metaverse and ‘web3’, psycho junk food supernormal stimuli may be about to take the exploitation of our Stone Age minds to a frightening next level.
At first glance, fake news and false memories appear to be separate phenomena. But they have much in common as dangerous sources of misinformation. This article argues that fake news generates false memories, which in turn leads to flawed decision-making. Ignoring this interplay amplifies risk for individuals, businesses and policymakers who rely on information accuracy. Behavioural science techniques can nudge decision-makers towards more proactive critical thinking and self-checking to minimise this predictable and avoidable error.
Applied behavioural science is facing some tough challenges, in the form of an ongoing replication crisis and a public debate on limits to nudging (including COVID-related stumbles). At the same time, we believe there is reason to be optimistic: the fusing of behavioural knowledge with data science methods means that we can see some of these shared challenges in a completely new light. In this article, we show how a transformation of our interactions with consumers and employees can usher in a new age for the field.
With most of its attention captured by the global fervor around 'big data', the banking industry has failed to give behavioral science the attention it deserves. I argue that, considering today’s challenges to fully take advantage of big data, implementing insights from behavioral science is a more cost-effective approach to improve customer experience in banking.
Many of us say we care about our privacy, but often disclose personal information. This asymmetry is called the “privacy paradox”. This phenomenon is only a paradox, however, if we assume people are rational or engage in rational disclosure decision-making. Taking into account our cognitive biases and the way online platforms are designed, it comes as no surprise that our disclosure behavior doesn’t always match our privacy preferences.
Human behavior is remarkably complicated. And yet, just as Newton's laws of motion distill three fundamental truths about the physical world, the three laws of human behavior describe three fundamental truths of human behavior: People tend to stick to the status quo unless the forces of friction or fuel push us them off their path; behavior is a function of the person and their environment; every decision includes tradeoffs and the potential for unintended consequences.
Nudges have become popular policy instruments, for good reasons. However, recent studies show they might sometimes backfire or cause undesired distributional effects – differing impacts across people. Such studies highlight the importance of careful policy analysis that examines both the average and distributional impacts of nudges.
Heuristics play an important role in daily judgments and decision-making, but a scientific debate has been ongoing as to whether heuristics result in systematic errors or make us smarter. Both approaches have resulted in tools to support decision-making. Nudges address systematic errors and biases, while boosts support informed decision-making under uncertainty. But can these two opposing approaches be integrated into one framework?
Can multiple social nudges be combined to achieve behavior change in electricity consumption? Find out in this post.
People's failure to act is an important problem discussed in behavioral economics and finance. But inappropriate action can also be detrimental. Find out more about the action bias in this post.
