How the Smallest Choices
Matter
The Kingdom of Bhutan applies choice
architectures to improve decisions and well-being.
Through
a much-appreciated referral from a good friend, I was invited to teach a course
on decision-making at Bhutan’s Royal Institute for Governance and Strategic
Studies (RIGSS). The course is part of a programme for Bhutan’s senior
government officials to help them develop their leadership and governance
skills. The two-day session on making better decisions looks at various aspects
of choice, including behavioural biases, the decision process, and concepts of
choice architecture.
The course was greatly aided by a poorly
designed door that was a perfect illustration of choice architecture and its
ability to influence people’s decisions. To enter the room, one had to push
against it, yet it had a large, vertical, metal handle that sends a strong
stimulus signal to say ‘pull me.’ I know this because I tried to pull it
the first time I saw it (and many times after that). I wasn’t the only
one. Despite the fact that there was a sign above that handle saying ‘PLEASE
PUSH THIS DOOR,’ I noticed many of the participants were facing this same
problem – despite that sign, and despite the fact that they had been there
longer than me – until I was finally able to use it as a great example of
choice architecture and tell them the story of “Thaler’s door”.
This
story was mentioned in the book, Nudge, by
Richard Thaler of the University of Chicago Booth School of Business and Cass
Sunstein of Harvard University. It involved a door in a classroom where Dr
Thaler was teaching. The door was an example of poor choice architecture
as it had handles, “…large, handsome wood handles, vertically mounted
cylindrical pulls about two feet in length.” Our instinct tells us that when
we see a large handle, it should be pulled, and so most students when leaving
the room would pull on the handles. This was a problem though, as the
door pushed outwards.
Occasionally
students would have to leave during the middle of class and they would quietly walk
up to the doors to minimise the disturbance, only to wreck that attempt when
they would start pulling, and continue to pull, on the doors that had to be
pushed. Thaler even discussed this with the class at one point, reminding them
of how the door opened. Yet when students were faced with that door they
would very often follow their instinct and make the wrong choice, trying to
pull the door open. As Thaler and Sunstein pointed out in their book,
doors like this are bad architecture because they trigger an action that is the
opposite of that needed. They are, however, a good example of choice
architecture, as they show how the presentation of the problem can influence
our response, and even override our thoughtful, logical self in doing so.
Moving
quickly to change
But
this is where our story deviates from Thaler’s. Thaler doesn’t explicitly say
if the school ever changed the door, he makes no mention of this, and in fact
he describes this as occurring throughout the semester.
Bhutan
is a different story. When I was describing this door, the institute’s
registrar was sitting in the class. After listening to the story, he
shared with us that this door had been a problem for them since they opened,
and that despite their efforts (the sign) each new group at the institute faced
the same mental disconnect.
Having
looked at the problem from a perspective of how people really make decisions,
he now realised that the only sensible solution was to change the choice
architecture, and characteristic of Asian foresight and willingness to change
quickly, he announced to the class that he was going to do so by removing the
handle and installing a metal plate in its place. Problem solved.
Nudge describes
how the way the options are presented can influence how people respond. Standard
economic theory tells us that people should behave under something called
“descriptive invariance”, meaning that if you offer something to someone in two
differently phrased ways, but the actual offers are mathematically equivalent,
then the person’s response should not change. People don’t behave this way
though.
One
of the classic examples of this looks at how schools can influence which foods
children choose in the cafeteria through choice architecture, in this case
simply the way in which the food is laid out and displayed. Neoclassical
economics would suggest that students would look at all the options and choose
their optimal mix of preferences, thereby maximising enjoyment.
Most
people, though, don’t look at all the choices simultaneously. Instead they
look at whatever is in front of them first in the line and decide if they want
that. If yes they take it. If not, they move on and face the same
choice at the next item. This type of behaviour is not maximising, but instead
is something called satisficing. Because of this, the order and manner in which
the food is laid out has a big impact on what people choose and eat. Move
the vegetables and healthy foods close to the front of the line and within easy
reach, and move the desserts and fried foods to the end of the line or out of
easy sight, and the students will actually choose and eat healthier
foods. This is one example of choice architecture in action.
In
this way we can look to influence people’s decisions by changing the
choice architecture – changing the layout of the cafeteria line if you
will. This has been done for thousands of years by people trying to sell us
things, and more recently adopted by governments trying to convince us to want
to do what they want us to do. For example, changes to the structure of
how we sign up for, or opt out of, retirement plans can have a huge impact on
people saving for retirement, all while leaving us the freedom to make the
choice ourselves (albeit a decision where the choice architecture will steer us
in a certain direction.)
Lessons
from Asia
One
of the joys of living in Asia is that often complex problems can be quickly
addressed. While Thaler’s door might well still be in its original, confusing
form, RIGSS is changing theirs. This speed can come with problems of course,
but on occasion it serves us well. In this instance this immediacy of
action will both solve the problem and provide the teacher with the joy of
knowing that the lesson has had an impact. It will also provide a fun anecdote
to recall the lessons of choice architecture.
Beyond
the door, the participants also discussed ways to frame choices so as to
address problems more meaningful to Bhutan. People might be surprised that in a
country known for its commitment to the environment one hot topic involved ways
to combat littering in the capital. Another discussion involved the
universal challenges of alcohol abuse. This then led on to a more
localised problem – how can one influence people to limit the incidence of A.U.I.
(Archery Under the Influence. Yes, apparently this is a real thing.)
As
Bhutan’s senior leaders are thinking about their own decision process and ways
in which they might employ choice architecture (and the important ethical
questions that come with this) that door at RIGSS also provides us outside of
Bhutan with a great example of the importance of choice architecture, and the
willingness to take action to improve our decision process. Instead of
relying on trial and error that human beings have traditionally done over the
centuries before determining the best path, good choice architectures can
minimise clumsy problems and find efficiency faster. RIGSS is changing its
door. What are you going to do?
Chris Lobello is a
Financial Consultant.
Read more at http://knowledge.insead.edu/blog/insead-blog/how-the-smallest-choices-matter-4741?utm_source=INSEAD+Knowledge&utm_campaign=37324ca816-16_June_mailer6_16_2016&utm_medium=email&utm_term=0_e079141ebb-37324ca816-249840429#PFfCs7SpfCRmKWkJ.99
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