Example Reports were written about water usage and sent

 

Example 1: WaterSmart
Software, 2012

Behavioural
economic principles were adopted in California to nudge residents to save
water. This then influenced other companies to utilise various principles and
apply them within their context. WaterSmart (2012) used nudges such as feedback
and social norms as collateral to influence behaviour change. Reports were
written about water usage and sent to customers informing them of how much
water they were using compared to their past and the position they ranked at in
terms of their neighbours and other households. As a result, water conservation
increased significantly. As a social species, norms can influence our behaviour
so that we conform to society. Nolan et al., (2008) posited that normative
social influence “produced the greatest change in behaviour.” Frederiks,
Stenner & Hobman (2015) provide further research support in this area in
applying these principles to household energy consumption. There are
implications for application in the healthcare sector especially. For example,
adopting these methods to nudge those who are hesitant to be vaccinated would
be beneficial.

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Example 2:
Broadband Package/Moneysupermarket

Many comparison websites such as moneysupermarket.com
(MoneySuperMarket, 2017) adopt behavioural economic principles such as framing,
anchoring and incentives. Firstly, presentation of information is significant.

For example, using bold colours such as greens and hot pinks attract customer’s
attention to certain packages more than dull colours like grey. Additionally, putting
a line through previous prices makes a positive impact to how customers choose
their package. Secondly, since people latch onto the first price they see,
otherwise known as anchoring, they compare it to others as a reference point
when viewing other products. Incentives are another aspect of behavioural
economics that can change behaviour (Dolan et al., 2012) and is another
principle that was applied to the broadband packages since some providers had
the option of no installation fees if their package was chosen and purchased.

 

Example 3: England
could move to ‘opt out’ organ donation system 2017

Behavioural
economics has provided us with deeper insight into how people think and make
decisions. Recently in the news, it has been reported that England want to
adopt a soft opt-out system. Applying this principle to organ donation would
mean an increase in donor and transplant rates. This system implies that all
registrants will donate unless they explicitly opt-out from the donor registry.

This is referred to as the default effect as people typically stray from making
an active choice because it is effortful. Johnson and Goldstein (2003) provide
support for this in that their findings stated that a surge in donors was due
to believed assent.

 

Example 4: Health
app of the year 2016- 7 Minute Workout

Health and fitness apps are becoming
increasingly popular especially with fitbits and Apple watches used to monitor
progress in weight loss and exercise e.g. how many steps have been done. We
live in an obesogenic environment in which Britain has been labelled “the fat
man of Europe.” According to the Organisation for Economic Co-operation and
Development (OECD) report, obesity has increased by 92% since
the 1990s in the UK. “More than one
in two adults and nearly one in six children are overweight or obese in the
OECD

Area, (OECD, 2017).” Apps
such as 7 Minute Workout, along with many others, use the principle of
gamification to nudge users into losing weight by tracking their progress. It
includes earning rewards and progress to higher levels from positions such as
“novice” to “athlete.” Additionally, it allows users to compete with friends.

Furthermore, active subscriptions are automatically renewed 24 hours before the
expiry date. Lister et al’s., (2014) “initial results show an abundant use of gamification
in health and fitness apps…the potential of gamification to change health
behaviours.”

 

 

 

Example 5: Tube
advert- Rohingya Crisis Appeal 2017

On the metropolitan line, the Rohingya
Crisis Appeal advertised a young boy holding his baby brother alongside a quote
that read, “I looked back to see my house burning. I couldn’t save my mother.” This
advert utilised the behavioural principle of affect and emotional appeal as it typically
instils saddened emotions in commuters, and in turn, may persuade some to give
aid towards this appeal. According to Kahneman and Tverssky (2011), two systems
exist in explaining our decision making. Affect based decisions are represented
by system 1 which are automatic and made subconsciously whereas system 2
involves logical thinking, effortful, slow and conscious. In this way,
charities tailor their advertisements to emotional appeal. Jen Shang, Philanthropic Psychologist, states charities
should focus on creating appeals that make people feel positive. For example,
including words such as “compassionate,” and “kind,” as opposed to using guilt,
(“Are emotive appeals effective in persuading people to give to
charity?”, 2013). Additionally,
Small (2009) discusses emotional contagion and found that people are more likely to donate when seeing “sad
expressions versus happy or neutral expressions” (p.1). Moreover, this links
back to the dual system theory as “contagion effects are automatic, but they
are diminished by deliberative thought” (p.1) Consequently, charities should
apply emotional appeal and affect in their advertisements.

 

Example 6: Trump
election campaign, 2016

Behavioural
economics can be applied to the political sector. In this case, it can be used to
explain why Trump was voted in as president. The principle ‘messenger’ was
applied to his campaign as he spoke of policies that would be beneficial to his
supporters, some of whom were deemed to be racist. Therefore, his policies
appealed to these particular groups who felt threatened with change in America.

Furthermore, loss aversion was another principle that affected the election
outcome, utilising prospect theory. Trump’s emphasis on America’s losses, for
example, discussing their economic position in relation to higher countries
such as China, influenced voters. Studies have revealed that “people are more
likely to take risks when they are in a bad position (losses),” (McDermott,
2001, p.4). In addition, people measure their status according to a reference
point “and for many Republicans that reference point is a past time when they
had more status and more economic security” James Surowiecki (2016).

 

References

Hudson, S. (2013, September 2). Are emotive appeals
effective in persuading people to give to charity?. (2017). The Guardian. Retrieved from https://www.theguardian.com/voluntary-sector-network/2013/sep/02/effective-emotive-appeals

Chen, F., & Stevens, R. (2016). Applying lessons from
behavioral economics to increase flu vaccination rates. Health Promotion International, 32(6),
1067-1073. doi: http://dx.doi.org/10.1093/heapro/daw031

Dolan, P., Hallsworth, M., Halpern, D., King, D., Metcalfe,
R., & Vlaev, I. (2012). Influencing behaviour: The mindspace way. Journal of Economic Psychology, 33(1), 264-277. doi: http://dx.doi.org/10.1016/j.joep.2011.10.009

England to consider optout organ donation. (2017, October 4).

BBC News. Retrieved from http://www.bbc.co.uk/news/health-41435255

Find Cheap Broadband Packages | MoneySuperMarket. (2017). Moneysupermarket.com. Retrieved from
http://www.moneysupermarket.com/broadband/packages/

Frederiks, E., Stenner, K., & Hobman, E. (2015).

Household energy use: Applying behavioural economics to understand consumer
decision-making and behaviour. Renewable and
Sustainable Energy Reviews, 41, 1385-1394
http://dx.doi.org/10.1016/j.rser.2014.09.026

Johnson, E., & Goldstein, D. (2004). Defaults and
Donation Decisions. Transplantation, 78(12), 1713-1716.

http://dx.doi.org/10.1097/01.tp.0000149788.10382.b2

Liang, J., Chen, Z., & Lei, J. (2016). Inspire me to
donate: The use of strength emotion in donation appeals. Journal of Consumer Psychology, 26(2), 283-288. http://dx.doi.org/10.1016/j.jcps.2015.09.001

Lister, C., West, J., Cannon, B., Sax, T., & Brodegard,
D. (2014). Just a Fad? Gamification in Health and Fitness Apps. JMIR Serious Games, 2(2), e9. http://dx.doi.org/10.2196/games.3413

Faro, D. (2016, November) London Business School. Donald Trump’s election: a behavioural
science perspective. London Business School. Retrieved from https://www.london.edu/faculty-and-research/lbsr/how-trump-won#.Wi71B7SFjOQ

McDermott, R. (2001). Risk-taking
in international politics. Ann Arbor: University of Michigan Press.

Nolan, J., Schultz, P., Cialdini, R., Goldstein, N., & Griskevicius,
V. (2008). Normative Social Influence is Underdetected. Personality and Social Psychology Bulletin, 34(7), 913-923. http://dx.doi.org/10.1177/0146167208316691

Oecd.org. Retrieved from
http://www.oecd.org/health/health-systems/Obesity-Update-2017.pdf

Rohingya refugees crisis (2017, November). Donate now to
help Rohingya in Bangladesh. Unicef UK. Retrieved from https://www.unicef.org/infobycountry/bangladesh_100945.html

Slovic, P., Finucane, M., Peters, E.,
& MacGregor, D. (2007). The affect heuristic. European Journal of
Operational Research, 177(3), 1333-1352.

http://dx.doi.org/10.1016/j.ejor.2005.04.006

Slovic, P., Finucane, M., Peters, E., & MacGregor, D.

(2007). The affect heuristic. European Journal
of Operational Research, 177(3), 1333-1352. http://dx.doi.org/10.1016/j.ejor.2005.04.006

Small, D., & Verrochi, N. (2009). The Face of Need:
Facial Emotion Expression on Charity Advertisements. Journal of Marketing Research, 46(6), 777-787.

http://dx.doi.org/10.1509/jmkr.46.6.777

Surowiecki, J. (2016, June 6). Losers!. Retrieved from https://www.newyorker.com/magazine/2016/06/06/losers-for-trump

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