nudge unit

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pages: 340 words: 94,464

Randomistas: How Radical Researchers Changed Our World by Andrew Leigh

Albert Einstein, Amazon Mechanical Turk, Anton Chekhov, Atul Gawande, basic income, Black Swan, correlation does not imply causation, crowdsourcing, David Brooks, Donald Trump, ending welfare as we know it, Estimating the Reproducibility of Psychological Science, experimental economics, Flynn Effect, germ theory of disease, Ignaz Semmelweis: hand washing, Indoor air pollution, Isaac Newton, Kickstarter, longitudinal study, loss aversion, Lyft, Marshall McLuhan, meta analysis, meta-analysis, microcredit, Netflix Prize, nudge unit, offshore financial centre, p-value, placebo effect, price mechanism, publication bias, RAND corporation, randomized controlled trial, recommendation engine, Richard Feynman, ride hailing / ride sharing, Robert Metcalfe, Ronald Reagan, statistical model, Steven Pinker, uber lyft, universal basic income, War on Poverty

The funding range for the low-cost randomised experiment competition was also amended to $100,000–$300,000. See Laura and John Arnold Foundation, ‘Laura and John Arnold Foundation announces expanded funding for low-cost randomized controlled trials to drive effective social spending’, press release, 7 December 2015. 9David Halpern, Inside the Nudge Unit: How Small Changes Can Make a Big Difference, London: WH Allen, 2015, p. 274. 10Halpern, Inside the Nudge Unit, p. 274. 11Halpern, Inside the Nudge Unit, pp. 91–2. 12Halpern, Inside the Nudge Unit, p. 89. 13Halpern, Inside the Nudge Unit, pp. 113–15; Michael Hallsworth, John List, Robert Metcalfe & Ivo Vlaev, ‘The behavioralist as tax collector: Using natural field experiments to enhance tax compliance’, Journal of Public Economics, vol. 148, issue C, 2017, pp. 14–31. The Australian Taxation Office reports that it increased compliance from tax debtors by 5 per cent simply by removing from its letters the opening words: ‘Please disregard this letter if you have paid this debt in full in the last seven days’: Peter Martin, ‘Mind games could pay handsomely’, Sydney Morning Herald, 17 November 2013. 14Halpern, Inside the Nudge Unit, p. 90. 15Tim Harford, ‘Nudge, nudge.

The Australian Taxation Office reports that it increased compliance from tax debtors by 5 per cent simply by removing from its letters the opening words: ‘Please disregard this letter if you have paid this debt in full in the last seven days’: Peter Martin, ‘Mind games could pay handsomely’, Sydney Morning Herald, 17 November 2013. 14Halpern, Inside the Nudge Unit, p. 90. 15Tim Harford, ‘Nudge, nudge. Think, think. Say no more …’, Financial Times, 11 February 2012 16Halpern, Inside the Nudge Unit, p. 132. 17A reminder message that included the name of the client, the name of the adviser, and the words ‘Good luck!’ increased attendance rates from 10 per cent to 27 per cent: David Halpern, Inside the Nudge Unit: How Small Changes Can Make a Big Difference, WH Allen, London, 2015, pp. 120–2 18Halpern, Inside the Nudge Unit, pp. 275–8. 19Halpern, Inside the Nudge Unit, p. 340. In France, the Youth Ministry has set up an experimental laboratory, ‘Le Fonds d’Expérimentation pour la Jeunesse’, to test programs that help young people: see http://experimentation.jeunes.gouv.fr. 20Premier and Cabinet Behavioural Insights Team, ‘Understanding people, better outcomes: Behavioural insights in NSW’, Sydney: NSW Department of Premier and Cabinet, 2014. 21The control message was: ‘You have an appointment with [Doctor name] in [Clinic name] on [Date] at [Time].

The competition continues to operate through a non-profit foundation, which has announced that it will fund all proposals that receive a high rating from its review panel.8 Simplicity is at the core of the approach taken by the behavioural insights teams which are emerging in central government agencies across the globe. In 2010 the British government became the first to establish a so-called ‘Nudge Unit’, to bring the principles of psychology and behavioural economics into policymaking. The interventions were mostly low-cost – such as tweaking existing mailings – and were tested through randomised trials wherever possible. In some cases they took only a few weeks. Since its creation, the tiny Nudge Unit has carried out more randomised experiments than the British government had conducted in that country’s history.9 The Nudge Unit focused on ‘low cost, rapid’ experiments.10 It found that letters asking people to pay their car tax were 9 percentage points more effective if they included a photograph of the offending vehicle, along with the caption ‘Pay Your Tax or Lose Your Car’.11 A personally scribbled note on the envelope along the lines of ‘Andrew, you really need to open this’ increased taxpaying by 4 percentage points.


pages: 387 words: 120,155

Inside the Nudge Unit: How Small Changes Can Make a Big Difference by David Halpern

Affordable Care Act / Obamacare, availability heuristic, carbon footprint, Cass Sunstein, centre right, choice architecture, cognitive dissonance, collaborative consumption, correlation does not imply causation, Daniel Kahneman / Amos Tversky, different worldview, endowment effect, happiness index / gross national happiness, hedonic treadmill, hindsight bias, IKEA effect, illegal immigration, job satisfaction, Kickstarter, libertarian paternalism, light touch regulation, longitudinal study, market design, meta analysis, meta-analysis, Milgram experiment, nudge unit, peer-to-peer lending, pension reform, presumed consent, QR code, quantitative easing, randomized controlled trial, Richard Thaler, Right to Buy, Ronald Reagan, Rory Sutherland, Simon Kuznets, skunkworks, the built environment, theory of mind, traffic fines, twin studies, World Values Survey

The MINDSPACE framework (Institute for Government, 2010). The 2010 government launches the Nudge Unit Squeezed between Steve Hilton and Rohan Silva, the new Prime Minister’s political advisers, in the back of a Paris taxi was not somewhere I thought I’d find myself in the early summer of 2010. It was still the very early days of the new Coalition Government, and we had come to Paris to see if the centre-right administration of Nicolas Sarkozy shared the interest in approaches to government of the new Cameron–Clegg government in the UK, including nudging, Big Society and well-being. It turned out that they didn’t. Richard Thaler was with us, over from Chicago for a few days while we sought to put into action the plan to create the world’s first nudge unit. We didn’t even know what we would call it at that point. At that time, my role was supposed to be to advise the new unit for a day or so a week, drawing on my knowledge of government and my specific knowledge of behaviour and policy.

Data and transparency 8. A different approach to big policy challenges 9. Well-being: Nudging ourselves, and each other, to happier lives 10. What works? The rise of experimental government Section 4 Where next? 11. Risks and limitations 12. Conclusion: Where next? Notes Index Acknowledgements Copyright About the Book This is the story of an experiment. The Behavioural Insights Team, or ‘Nudge Unit’ as it came to be called, was set up in Downing Street in 2010 by Prime Minister David Cameron. The team’s objectives read like a mission impossible: to transform the approach of at least two major departments; to inject a new and more realistic understanding of human behaviour across UK government; and to deliver a 10-fold return on its cost. If it failed, it was to be shut down on its two-year anniversary – with enough time for voters to forget the whole embarrassing experiment before the next election.

Nothing came of the French effort aside from an excellent lunch, but we made good use of our time together on the Eurostar to think about what the team might do and other important matters, including deciding what it should be called. We eventually settled on the Behavioural Insights Team, though Rohan prophetically predicted that the formal name of the team would be irrelevant since everyone would just call it the ‘Nudge Unit’. Now, five years later, it is hard to imagine what would have become of the effort had Rohan not convinced David Halpern to come back from the comfortable, good life working at the UK’s Institute for Government and as an academic at Cambridge, to resume a full-time role in government. David had a unique background that made him the ideal person to lead this new effort. Not only was he a first-rate academic psychologist with a thorough understanding of modern behavioural science research, but crucially he had also worked in the Strategy Unit at 10 Downing Street in Tony Blair’s administration, so knew the workings of Whitehall intimately.


pages: 317 words: 87,566

The Happiness Industry: How the Government and Big Business Sold Us Well-Being by William Davies

1960s counterculture, Airbnb, business intelligence, corporate governance, dematerialisation, experimental subject, Exxon Valdez, Frederick Winslow Taylor, Gini coefficient, income inequality, intangible asset, invisible hand, joint-stock company, lifelogging, market bubble, mental accounting, nudge unit, Panopticon Jeremy Bentham, Philip Mirowski, profit maximization, randomized controlled trial, Richard Thaler, road to serfdom, Ronald Coase, Ronald Reagan, science of happiness, selective serotonin reuptake inhibitor (SSRI), sentiment analysis, sharing economy, Slavoj Žižek, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, social intelligence, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, The Chicago School, The Spirit Level, theory of mind, urban planning, Vilfredo Pareto

In 2013, the British government was embarrassed when a blogger discovered that jobseekers were being asked to complete psychometric surveys whose results were completely bogus.19 Regardless of how the user answered the questions, they got the same results, telling them what their main strengths are in the job market. It later transpired that this was an experiment being run by the government’s ‘Nudge Unit’, to see if individual behaviour was altered by having this survey offer them these findings. Social reality had been manipulated to generate findings for those looking down from above. This logic of experimentation allows for policies to be introduced which would otherwise seem entirely unreasonable, or even illegal. Behavioural experiments on criminal activity show that individuals are less psychologically prone to take drugs or engage in low-level crime if the resulting penalty is swift and certain.

In that sense, due process becomes viewed as an inefficient blockage, standing in the way of behaviour change. The much-celebrated HOPE (Hawaii’s Opportunity Probation with Enforcement) programme, which builds directly on this body of evidence, ensures that repeat offenders know they will be jailed immediately if found up to no good. Projects such as the Hudson Yards quantified community, the Nudge Unit’s fake survey and HOPE share a number of characteristics. Most obviously, they are fuelled by a high degree of scientific optimism that it may be possible to acquire hard objective knowledge regarding individual decision-making, and then to design public policy (or business practices) accordingly. This optimism is scarcely new; indeed it tends to recur ever few decades or so. The first wave occurred during the 1920s, inspired by Watson and Taylorist principles of ‘scientific management’.

Today, the fact that it is ‘quants’ (mathematicians and physicists, equipped with algorithmic techniques to explore large data sets) who are rendering our behaviour predictable is deemed all the more promising, given these individuals are not burdened by any theory of what distinguishes human beings or societies from any other type of system. Secondly, the surveillance. As examples such as Hudson Yards or the Nudge Unit indicate, the new era of behaviourist exuberance has emerged on the basis of new high-level alliances between political authorities and academic researchers. Without those alliances, social scientists continue to labour under the auspices of ‘theory’ and ‘understanding’, as indeed we all do when seeking to interpret what each other are up to in our day-to-day lives. Alternatively, there are companies such as Facebook, who are able to make hard, objective claims about how people are influenced by different tastes, moods or behaviours – thanks to their ability to observe and analyse the online activity of nearly a billion people.


pages: 290 words: 82,871

The Hidden Half: How the World Conceals Its Secrets by Michael Blastland

air freight, Alfred Russel Wallace, banking crisis, Bayesian statistics, Berlin Wall, central bank independence, cognitive bias, complexity theory, Deng Xiaoping, Diane Coyle, Donald Trump, epigenetics, experimental subject, full employment, George Santayana, hindsight bias, income inequality, manufacturing employment, mass incarceration, meta analysis, meta-analysis, minimum wage unemployment, nudge unit, oil shock, p-value, personalized medicine, phenotype, Ralph Waldo Emerson, random walk, randomized controlled trial, replication crisis, Richard Thaler, selection bias, the map is not the territory, the scientific method, The Wisdom of Crowds, twin studies

See also Justin Pierce and Peter Schott, ‘The Surprisingly Swift Decline of US Manufacturing Employment’, American Economic Review, vol. 106, no. 7, 2016, pp. 1632–1662. 18 Note: shares of manufacturing exports, not overall manufacturing totals. 19 China became a member of the World Trade Organization in 2001, which seems to have reassured overseas investors that its intentions to trade were long term. 20 See especially Jonathan Rothwell, ‘Cutting the Losses: Reassessing the Costs of Import Competition to Workers and Communities’, 19 October 2017, Available at SSRN: https://ssrn.com/abstract=2920188. Chapter 9 1 Disciplined pluralism is described in his book The Truth About Markets, London, Penguin, 2004, among other writings. 2 My Radio 4 colleague Tim Harford has suggested we encourage more Kay-like discipline with a prize for the best public change of mind. 3 David Halpern, Inside the Nudge Unit: How Small Changes Can Make a Big Difference, London, W. H. Allen, 2015. 4 The Behavioural Insights Team (aka the Nudge Unit) has useful resources on its website, including papers about experiment in government, such as: ‘Test, Learn, Adapt’. 5 Gabriel Ahlfeldt et al., ‘The Economics of Density: Evidence from the Berlin Wall’, Econometrica, vol. 83, no. 6, 2015, pp. 2127–2189. 6 Lurking behind this sentence is an increasingly fraught argument about the value of randomized controlled trials.

A recent practical example of the attempt to put the theory to use came when advisors to the UK government used social proof to try to persuade more people to sign up to a register to donate their organs for transplant after their death.12 Given a straw of hopeful theory, governments often grab it, especially if it’s congenial for other political reasons. Wisely, the Behavioural Insight Team – also known as the Nudge Unit – didn’t do that. Instead, they ran an experiment in which they tested messages inspired by the theory against others. The organ donation campaign targeted people visiting a government website to renew their driving licence. Some were shown one of three messages embracing the principles of social proof, in essence: ‘lots of people agree to donate their organs after their death, perhaps you’d like to do the same?’


pages: 168 words: 46,194

Why Nudge?: The Politics of Libertarian Paternalism by Cass R. Sunstein

Affordable Care Act / Obamacare, Andrei Shleifer, availability heuristic, Cass Sunstein, choice architecture, clean water, Daniel Kahneman / Amos Tversky, Edward Glaeser, endowment effect, energy security, framing effect, invisible hand, late fees, libertarian paternalism, loss aversion, nudge unit, randomized controlled trial, Richard Thaler

., Changing Human Behavior to Prevent Disease: The Importance of Targeting Automatic Processes, 337 SCIENCE 1492 (2012) (exploring role of automatic processing in behavior in the domain of health). 25. See The Behavioural Insights Team, CABINET OFFICE, http://www.cabinetoffice.gov.uk/behavioural-insights-team (last visited Dec. 10, 2012). 26. Id. 27. Various reports can be found at the website of the Behavioural Insights Team. See id. 28. See Oliver Wright, Steve Hilton’s “Nudge Unit” Goes Global, INDEPENDENT (London), Sept. 20, 2012, http://www.independent.co.uk/news/uk/politics/steve-hiltons-nudge-unit-goes-global-8157492.html. 29. See Consumer Policy Toolkit, ORG. FOR ECON. COOPERATION & DEV. (July 2010), http://www.oecd.org/sti/consumerpolicy/consumerpolicytoolkit.htm. 30. See DG SANCO, Consumer Behaviour: The Road to Effective Policy-Making, EUR. COMMISSION (2010), http://ec.europa.eu/consumers/docs/1dg-sanco-brochure-consumer-behaviour-final.pdf. 31.


pages: 611 words: 130,419

Narrative Economics: How Stories Go Viral and Drive Major Economic Events by Robert J. Shiller

agricultural Revolution, Albert Einstein, algorithmic trading, Andrei Shleifer, autonomous vehicles, bank run, banking crisis, basic income, bitcoin, blockchain, business cycle, butterfly effect, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, central bank independence, collective bargaining, computerized trading, corporate raider, correlation does not imply causation, cryptocurrency, Daniel Kahneman / Amos Tversky, debt deflation, disintermediation, Donald Trump, Edmond Halley, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, full employment, George Akerlof, germ theory of disease, German hyperinflation, Gunnar Myrdal, Gödel, Escher, Bach, Hacker Ethic, implied volatility, income inequality, inflation targeting, invention of radio, invention of the telegraph, Jean Tirole, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, litecoin, market bubble, money market fund, moral hazard, Northern Rock, nudge unit, Own Your Own Home, Paul Samuelson, Philip Mirowski, plutocrats, Plutocrats, Ponzi scheme, publish or perish, random walk, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, Rubik’s Cube, Satoshi Nakamoto, secular stagnation, shareholder value, Silicon Valley, speech recognition, Steve Jobs, Steven Pinker, stochastic process, stocks for the long run, superstar cities, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, theory of mind, Thorstein Veblen, traveling salesman, trickle-down economics, tulip mania, universal basic income, Watson beat the top human players on Jeopardy!, We are the 99%, yellow journalism, yield curve, Yom Kippur War

Indiana University Lilly Family School of Philanthropy, GenerosityForLife.org, Charitable Profile, http://generosityforlife.org/generosity-data/data-tools/generosity-reports/. 3. “Reading Aloud,” Washington Post, October 25, 1899, p. 6. 4. See Colley, 2003. 5. Regarding women, see Driscoll et al., 2009. 6. OECD, “Behavioral Insights,” 2017, http://www.oecd.org/gov/regulatory-policy/behavioural-insights.htm. See also Zeina Afif, “ ‘Nudge Units’—Where They Came From and What They Can Do,” World Bank “Let’s Talk Development” blog, October 25, 2017, http://blogs.worldbank.org/developmenttalk/nudge-units-where-they-came-and-what-they-can-do. 7. https://millercenter.org/the-presidency/presidential-speeches/march-4-1933-first-inaugural-address. 8. https://millercenter.org/the-presidency/presidential-speeches/march-12-1933-fireside-chat-1-banking-crisis. 9. See https://www.sistrix.com/ask-sistrix/google-index-google-bot-crawler/why-does-a-google-search-with-the-parenthesis-operator-sometimes-deliver-more-results-than-the-same-search-without-it/. 10.

Fortunately, the behavioral economics revolution of the last few decades has brought economic research closer to that of other social sciences. No longer do economists routinely assume that people always behave rationally. One widespread and important innovation is the creation of economic think tanks interested in creating policies based on the insights of behavioral economics. These think tanks have been called “nudge units,” following the Behavioral Insights Team in the UK government in 2010. Working with the ideas popularized by Richard Thaler and Cass Sunstein in their 2008 book Nudge: Improving Decisions about Health, Wealth, and Happiness, these units try to redesign government institutions toward “nudging” people away from their irrational behavior without coercing them. According to the Organization for Economic Cooperation and Development, there are now close to two hundred such units around the world.6 I advocate formalizing some of the intuitive judgment that national leaders already use to acknowledge and harness changing economic narratives.

See also brain Newcomb, Anthony, 35 “New Deal,” coined by Stuart Chase, 185 The New Financial Order (Shiller), 38 news media: creative during major stock market corrections, 75; economic narratives spread through, 3, 21; improving retention with narrative presentation, 77; international economic narratives and, 110; marketing-driven, 61–62; in modified SIR model, 297; reminding public on anniversaries of events, 76; searching for words and phrases in, x Nixon, Richard, 173 normalcy, 244, 252 North, Douglass, 14 Northern Rock bank run in 2007, 119, 135 novels: classical symphony as, 35; understanding human experience and, 16. See also fiction Noyes, Alexander Dana, 127, 164, 231 Nudge (Thaler and Sunstein), 278 nudge units, 277–78 NVIDIA Corporation, 20 O’Barr, William M., 15 Occupy Wall Street protest, 8, 225 office workplace: automation of, 204; labor-saving machinery narrative and, 186 Ohanian, Lee E., 132 oil embargo of 1973, 256 one-hit wonders, 41–42 Only Yesterday (Allen), ix–xi, 139 organ donation, narrative presentation of, 78 overlapping generations model, 24–25, 27f, 303n8 overproduction or underconsumption theory, 187–92 “Ownership Society” (Bush reelection slogan), 155 oxytocin, 54 Oz: The Great and Powerful (film), 172 Palme, Olof, 48–49 panic: at beginning of World War I, 93–94; creation of Federal Reserve and, 117; in financial crisis, 55–56, 86; following complacency, 55–56; Great Depression seen as, 128; inflation in 1970s and, 262; stock prices and, 228.


Digital Transformation at Scale: Why the Strategy Is Delivery by Andrew Greenway,Ben Terrett,Mike Bracken,Tom Loosemore

Airbnb, bitcoin, blockchain, butterfly effect, call centre, chief data officer, choice architecture, cognitive dissonance, cryptocurrency, Diane Coyle, en.wikipedia.org, G4S, Internet of things, Kevin Kelly, Kickstarter, loose coupling, M-Pesa, minimum viable product, nudge unit, performance metric, ransomware, Silicon Valley, social web, the market place, The Wisdom of Crowds

By making it very difficult for people with different specialist strengths to advance to positions of influence, many organisations end up losing those perspectives altogether as people leave to join companies that value them. Digital transformation is not really about replacing old skills with new; it is about balancing old skills and new, and putting them to work together. Retrospective: organ donation In 2012, the UK government began experimenting with new ways to increase the number of people donating organs after they had died. The Behavioural Insight team, also known as the ‘Nudge Unit’ – a crack unit of policy experts and economists – believed a likely route to success would be to amend the paper form that people used to apply for a provisional driving licence, adding a call to action that encouraged donations. They were working with operational officials in the DVLA to make this happen, but the logistical difficulties involved in updating paper-based processes were slowing them down.

Soon after GOV.UK was launched, a meeting was convened at Number 10. Amending the provisional licence form wasn’t just operationally difficult; it didn’t actually turn out to be that good an idea. Most provisional licence forms were filled out by prospective new teenage drivers or their parents. Neither group was particularly engaged by reading a sentence at the top of a long form that confronted them with their mortality, however elegant its drafting. The Nudge Unit tested one new version of the sentence on the paper form, and the number of donations went down. The early pioneers of e-government in the UK had long said that a goal for the new GOV.UK should be to make better use of the ‘golden page’ – the final page of a transaction. In companies, the golden page had become known as the best point to cross-promote additional or complementary goods. Having experienced the jolt of endorphins that came from buying something, the end of a transaction was the place people were most likely to extend their shopping basket.


pages: 387 words: 119,409

Work Rules!: Insights From Inside Google That Will Transform How You Live and Lead by Laszlo Bock

Airbnb, Albert Einstein, AltaVista, Atul Gawande, Black Swan, book scanning, Burning Man, call centre, Cass Sunstein, Checklist Manifesto, choice architecture, citizen journalism, clean water, correlation coefficient, crowdsourcing, Daniel Kahneman / Amos Tversky, deliberate practice, en.wikipedia.org, experimental subject, Frederick Winslow Taylor, future of work, Google Earth, Google Glasses, Google Hangouts, Google X / Alphabet X, Googley, helicopter parent, immigration reform, Internet Archive, longitudinal study, Menlo Park, mental accounting, meta analysis, meta-analysis, Moneyball by Michael Lewis explains big data, nudge unit, PageRank, Paul Buchheit, Ralph Waldo Emerson, Rana Plaza, random walk, Richard Thaler, Rubik’s Cube, self-driving car, shareholder value, side project, Silicon Valley, six sigma, statistical model, Steve Ballmer, Steve Jobs, Steven Levy, Steven Pinker, survivorship bias, TaskRabbit, The Wisdom of Crowds, Tony Hsieh, Turing machine, winner-take-all economy, Y2K

Colleen Giblin, “The Perils of Large Plates: Waist, Waste, and Wallet,” review of “The Visual Illusions of Food: Why Plates, Bowls, and Spoons Can Bias Consumption Volume,” by Brian Wansink and Koert van Ittersum (FASEB Journal 20, no. 4 [2006]: A618), Cornell University Food and Brand Lab, 2011, http://foodpsychology.cornell.edu/outreach/large-plates.html. 243. Wansink and Ittersum, “Visual Illusions of Food.” 244. Leo Benedictus, “The Nudge Unit—Has It Worked So Far?” Guardian, May 1, 2013, http://www.theguardian.com/politics/2013/may/02/nudge-unit-has-it-worked. 245. Britton Brewer, “Adherence to Sport Injury Rehabilitation Regimens,” in Adherence Issues in Sport and Exercise, ed. Stephen Bull (New York: Wiley, 1999), 145–168. 246. Richard H. Thaler, “Opting In vs. Opting Out,” New York Times, September 26, 2009, http://www.nytimes.com/2009/09/27/business/economy/27view.html. 247. Eric J.

We served over 3,500 lunches in that café that week and reduced total consumption by 5 percent and waste by 18 percent. Not a bad return on the cost of a few new dishes. Design deliberately and with intent Nudges are an incredibly powerful mechanism for improving teams and organizations. They are also ideally suited to experimentation, so can be tested on smaller populations to fine-tune their results. Prime Minister David Cameron of the United Kingdom established a “nudge unit” in 2010 that has improved collection of car taxes by 30 percent by sending overdue-tax notices along with a bold “Pay your tax or lose your [make of car]” label and a photo of the car. The unit also improved collection of court fines by 33 percent by sending notices by text message instead of mail. And in 2011 they replaced an attic insulation subsidy with an attic-clearing subsidy, with discounted rates for cleaning out clutter if insulation was subsequently installed.


Bulletproof Problem Solving by Charles Conn, Robert McLean

active transport: walking or cycling, Airbnb, Amazon Mechanical Turk, asset allocation, availability heuristic, Bayesian statistics, Black Swan, blockchain, business process, call centre, carbon footprint, cloud computing, correlation does not imply causation, Credit Default Swap, crowdsourcing, David Brooks, Donald Trump, Elon Musk, endowment effect, future of work, Hyperloop, Innovator's Dilemma, inventory management, iterative process, loss aversion, meta analysis, meta-analysis, Nate Silver, nudge unit, Occam's razor, pattern recognition, pets.com, prediction markets, principal–agent problem, RAND corporation, randomized controlled trial, risk tolerance, Silicon Valley, smart contracts, stem cell, the rule of 72, the scientific method, The Signal and the Noise by Nate Silver, time value of money, transfer pricing, Vilfredo Pareto, walkable city, WikiLeaks

Their conclusion was dramatic: “Obesity may spread in social networks in a quantifiable and discernible pattern that depends on the nature of social ties.”5 Their findings were that if one person became obese the likelihood of a spouse becoming obese was 37% higher, 40% for siblings, and 57% for friends. They drew on this connectedness to argue that “medical and public health interventions might be more cost effective than initially supposed, since health improvements in one might spread to others.” Could this insight lead to the great social unwinding project? And who better to involve than the UK Behavioral Insights Team, the so‐called nudge unit. Where would they start? In the same way that one person becoming obese impacted others, one person as a spouse, friend, or sibling could take the lead and be supported by committing to regaining normal weight. We now know a lot more than we did a decade ago about social networks; tackling obesity with this knowledge seems a sensible avenue to explore. 4. Supporting high‐leverage programs such as reducing weight gain in pregnancy and early childhood.


pages: 209 words: 89,619

The Precariat: The New Dangerous Class by Guy Standing

8-hour work day, banking crisis, barriers to entry, basic income, Bertrand Russell: In Praise of Idleness, call centre, Cass Sunstein, centre right, collective bargaining, corporate governance, crony capitalism, deindustrialization, deskilling, fear of failure, full employment, hiring and firing, Honoré de Balzac, housing crisis, illegal immigration, immigration reform, income inequality, labour market flexibility, labour mobility, land reform, libertarian paternalism, low skilled workers, lump of labour, marginal employment, Mark Zuckerberg, mass immigration, means of production, mini-job, moral hazard, Naomi Klein, nudge unit, old age dependency ratio, Panopticon Jeremy Bentham, pensions crisis, placebo effect, post-industrial society, precariat, presumed consent, quantitative easing, remote working, rent-seeking, Richard Thaler, rising living standards, Ronald Coase, Ronald Reagan, science of happiness, shareholder value, Silicon Valley, The Market for Lemons, The Nature of the Firm, The Spirit Level, Tobin tax, transaction costs, universal basic income, unpaid internship, winner-take-all economy, working poor, working-age population, young professional

The authors do not attribute the idea to Bentham but say the state should create ‘an architecture of choice’. On becoming US President, Obama appointed Sunstein to head the Office of Information and Regulatory Affairs, based in the White House. Meanwhile, in the United Kingdom, Conservative Party leader David Cameron told members of parliament to read the book; on becoming Prime Minister in 2010 he set up the Behavioural Insight Team, quickly dubbed ‘the Nudge Unit’, in Downing Street, advised by Thaler. The mandate was to induce people to make ‘better’ decisions, in the interest of ‘society’. Steering people is always questionable. How do we know that the nudgers know what is best for any individual? Today’s conventional wisdom becomes yesterday’s error. Again and again, policies or practices that seem unwise turn out later to become norms and vice versa.


pages: 443 words: 98,113

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay by Guy Standing

3D printing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Big bang: deregulation of the City of London, bilateral investment treaty, Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cashless society, central bank independence, centre right, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, credit crunch, crony capitalism, crowdsourcing, debt deflation, declining real wages, deindustrialization, disruptive innovation, Doha Development Round, Donald Trump, Double Irish / Dutch Sandwich, ending welfare as we know it, eurozone crisis, falling living standards, financial deregulation, financial innovation, Firefox, first-past-the-post, future of work, gig economy, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, housing crisis, income inequality, information retrieval, intangible asset, invention of the steam engine, investor state dispute settlement, James Watt: steam engine, job automation, John Maynard Keynes: technological unemployment, labour market flexibility, light touch regulation, Long Term Capital Management, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, means of production, mini-job, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Kinnock, non-tariff barriers, North Sea oil, Northern Rock, nudge unit, Occupy movement, offshore financial centre, oil shale / tar sands, open economy, openstreetmap, patent troll, payday loans, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, precariat, quantitative easing, remote working, rent control, rent-seeking, ride hailing / ride sharing, Right to Buy, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Altman, savings glut, Second Machine Age, secular stagnation, sharing economy, Silicon Valley, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, Stephen Hawking, Steve Ballmer, structural adjustment programs, TaskRabbit, The Chicago School, The Future of Employment, the payments system, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, too big to fail, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Y Combinator, zero-sum game, Zipcar

Turner, Between Debt and the Devil: Money, Credit and Fixing Global Finance (Princeton: Princeton University Press, 2015). 10 ‘As safe as houses’, The Economist, 31 January 2015. 11 L. Buttiglione, P. R. Lane, L. Reichlin and V. Reinhart, ‘Deleveraging: What Deleveraging?’, Geneva Report on the World Economy 16 (Geneva: International Centre for Monetary and Banking Studies, 2014). 12 A morally inappropriate response has been proposed by influential behavioural economists linked to the nudge units in the White House and 10 Downing Street. This is to ban people from over-borrowing. As one enthusiast put it, ‘What is the big deal? Let’s limit people’s ability to hurt themselves in borrowing, like we do with seatbelts in driving.’ D. Ariely, Predictably Irrational: The Hidden Forces that Shape our Decisions (New York: Harper Collins, 2008). This would be arbitrary, subjective, costly and an obvious intrusion into freedom. 13 Cited in W.


pages: 453 words: 111,010

Licence to be Bad by Jonathan Aldred

"Robert Solow", Affordable Care Act / Obamacare, Albert Einstein, availability heuristic, Ayatollah Khomeini, Benoit Mandelbrot, Berlin Wall, Black Swan, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Cass Sunstein, clean water, cognitive dissonance, corporate governance, correlation does not imply causation, cuban missile crisis, Daniel Kahneman / Amos Tversky, Donald Trump, Douglas Engelbart, Douglas Engelbart, Edward Snowden, Fall of the Berlin Wall, falling living standards, feminist movement, framing effect, Frederick Winslow Taylor, From Mathematics to the Technologies of Life and Death, full employment, George Akerlof, glass ceiling, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jeff Bezos, John Nash: game theory, John von Neumann, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, meta analysis, meta-analysis, Mont Pelerin Society, mutually assured destruction, Myron Scholes, Nash equilibrium, Norbert Wiener, nudge unit, obamacare, offshore financial centre, Pareto efficiency, Paul Samuelson, plutocrats, Plutocrats, positional goods, profit maximization, profit motive, race to the bottom, RAND corporation, rent-seeking, Richard Thaler, ride hailing / ride sharing, risk tolerance, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, Skype, Social Responsibility of Business Is to Increase Its Profits, spectrum auction, The Nature of the Firm, The Wealth of Nations by Adam Smith, transaction costs, trickle-down economics, Vilfredo Pareto, wealth creators, zero-sum game

The core idea behind Nudge is that rather than fighting these forces, we should use them, to steer or nudge people to make the choices they would want to make – the choices homo economicus would make, or at least something close. At first, Nudge looked like a passing fashion, just the latest idea from the policy wonks hanging around central government. But it didn’t go away. Sunstein worked for Obama in the White House, Thaler’s ‘Nudge Unit’ advised the Cameron government in the UK, and self-conscious Nudge policies are now being used in around 130 countries.23 Thaler won the Nobel Prize for economics in 2017. Nudge enthusiasts almost always point to the same policy to illustrate the Nudge approach, its flagship success story – automatic enrolment in workplace pensions. A workplace pension has two big advantages over other forms of retirement saving: tax breaks and contributions from your employer.


pages: 424 words: 114,905

Deep Medicine: How Artificial Intelligence Can Make Healthcare Human Again by Eric Topol

23andMe, Affordable Care Act / Obamacare, AI winter, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, artificial general intelligence, augmented reality, autonomous vehicles, bioinformatics, blockchain, cloud computing, cognitive bias, Colonization of Mars, computer age, computer vision, conceptual framework, creative destruction, crowdsourcing, Daniel Kahneman / Amos Tversky, dark matter, David Brooks, digital twin, Elon Musk, en.wikipedia.org, epigenetics, Erik Brynjolfsson, fault tolerance, George Santayana, Google Glasses, ImageNet competition, Jeff Bezos, job automation, job satisfaction, Joi Ito, Mark Zuckerberg, medical residency, meta analysis, meta-analysis, microbiome, natural language processing, new economy, Nicholas Carr, nudge unit, pattern recognition, performance metric, personalized medicine, phenotype, placebo effect, randomized controlled trial, recommendation engine, Rubik’s Cube, Sam Altman, self-driving car, Silicon Valley, speech recognition, Stephen Hawking, text mining, the scientific method, Tim Cook: Apple, War on Poverty, Watson beat the top human players on Jeopardy!, working-age population

New York: HarperCollins, pp. 202–203. 46. Mar, A., “Modern Love. Are We Ready for Intimacy with Androids?,” Wired. 2017. 47. Di Sturco, G., “Meet Sophia, the Robot That Looks Almost Human,” National Geographic. 2018. 48. Sagar, M., and E. Broadbent, “Participatory Medicine: Model Based Tools for Engaging and Empowering the Individual.” Interface Focus, 2016. 6(2): p. 20150092. 49. Patel, M. S., K. G. Volpp, and D. A. Asch, “Nudge Units to Improve the Delivery of Health Care.” N Engl J Med, 2018. 378(3): pp. 214–216. 50. Emanuel, E. J., “The Hype of Virtual Medicine,” Wall Street Journal. 2017; Lopatto, E., “End of Watch: What Happens When You Try to Change Behavior Without Behavioral Science?,” Verge. 2018. 51. Marteau, T. M., “Changing Minds About Changing Behaviour.” Lancet, 2018. 391(10116): pp. 116–117. 52. Subrahmanian, V.


Sam Friedman and Daniel Laurison by The Class Ceiling Why it Pays to be Privileged (2019, Policy Press)

affirmative action, Boris Johnson, discrete time, Donald Trump, Downton Abbey, equal pay for equal work, gender pay gap, gig economy, Gini coefficient, glass ceiling, Hyperloop, if you build it, they will come, income inequality, invisible hand, job satisfaction, knowledge economy, longitudinal study, meta analysis, meta-analysis, nudge unit, old-boy network, performance metric, psychological pricing, school choice, Skype, starchitect, The Spirit Level, unpaid internship, upwardly mobile

See Friedman et al (2015); Laurison and Friedman (2016). 306 Notes: Chapter NotesEight-Nine 35 36 37 38 Gary brings to mind Richard Hoggart’s autobiographical The uses of literacy (2009), the seminal text that charts the possibilities (and pains) of social ascent at a time of expanding opportunities. He eschewed the contemporary language of social mobility embraced more readily by professional service firms, feeling that architecture was now an established level-playing field. See Thaler and Sunstein (2009). The Behavioural Insights Team, also known as the Nudge Unit, is an organisation that was set up inside the Cabinet Office to apply nudge theory to UK government policy in many areas, including social mobility. Erickson’s (1996) classic study finds a similar effect in terms of the use of popular culture as a bridging tool that aids cross-class interaction and coordination in workplaces. Chapter Nine 1 2 3 4 5 6 7 8 9 10 11 12 13 APPG on Social Mobility (2012).


pages: 500 words: 145,005

Misbehaving: The Making of Behavioral Economics by Richard H. Thaler

"Robert Solow", 3Com Palm IPO, Albert Einstein, Alvin Roth, Amazon Mechanical Turk, Andrei Shleifer, Apple's 1984 Super Bowl advert, Atul Gawande, Berlin Wall, Bernie Madoff, Black-Scholes formula, business cycle, capital asset pricing model, Cass Sunstein, Checklist Manifesto, choice architecture, clean water, cognitive dissonance, conceptual framework, constrained optimization, Daniel Kahneman / Amos Tversky, delayed gratification, diversification, diversified portfolio, Edward Glaeser, endowment effect, equity premium, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, George Akerlof, hindsight bias, Home mortgage interest deduction, impulse control, index fund, information asymmetry, invisible hand, Jean Tirole, John Nash: game theory, John von Neumann, Kenneth Arrow, Kickstarter, late fees, law of one price, libertarian paternalism, Long Term Capital Management, loss aversion, market clearing, Mason jar, mental accounting, meta analysis, meta-analysis, money market fund, More Guns, Less Crime, mortgage debt, Myron Scholes, Nash equilibrium, Nate Silver, New Journalism, nudge unit, Paul Samuelson, payday loans, Ponzi scheme, presumed consent, pre–internet, principal–agent problem, prisoner's dilemma, profit maximization, random walk, randomized controlled trial, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Silicon Valley, South Sea Bubble, Stanford marshmallow experiment, statistical model, Steve Jobs, Supply of New York City Cabdrivers, technology bubble, The Chicago School, The Myth of the Rational Market, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, ultimatum game, Vilfredo Pareto, Walter Mischel, zero-sum game

On the train ride over, Steve Hilton and I got into a heated debate about what the new team should be called. Steve wanted to use the term “behavior change,” which I thought had awful connotations. David Halpern and I were lobbying for Behavioural Insights Team, the name finally chosen. The argument consumed most of the trip to Paris. At some point Rohan took Steve aside and told him to give in, arguing, prophetically, that “no matter what we name it, everyone will call it the ‘nudge unit.’” By the time of my next trip to London, the initial team had been established and was set up in temporary facilities in an obscure corner of the Admiralty Arch, located a short walk away from 10 Downing Street and Parliament. It was winter, and London had been hit with what locals considered a massive snowstorm. Accumulation was about an inch. And it was not much warmer inside than outside the drafty building that served as the team’s first home.


pages: 688 words: 147,571

Robot Rules: Regulating Artificial Intelligence by Jacob Turner

Ada Lovelace, Affordable Care Act / Obamacare, AI winter, algorithmic trading, artificial general intelligence, Asilomar, Asilomar Conference on Recombinant DNA, autonomous vehicles, Basel III, bitcoin, blockchain, brain emulation, Clapham omnibus, cognitive dissonance, corporate governance, corporate social responsibility, correlation does not imply causation, crowdsourcing, distributed ledger, don't be evil, Donald Trump, easy for humans, difficult for computers, effective altruism, Elon Musk, financial exclusion, financial innovation, friendly fire, future of work, hive mind, Internet of things, iterative process, job automation, John Markoff, John von Neumann, Loebner Prize, medical malpractice, Nate Silver, natural language processing, nudge unit, obamacare, off grid, pattern recognition, Peace of Westphalia, race to the bottom, Ray Kurzweil, Rodney Brooks, self-driving car, Silicon Valley, Stanislav Petrov, Stephen Hawking, Steve Wozniak, strong AI, technological singularity, Tesla Model S, The Coming Technological Singularity, The Future of Employment, The Signal and the Noise by Nate Silver, Turing test, Vernor Vinge

Why a ‘Right to an Explanation ’ Is Probably Not the Remedy You Are Looking For” Duke Law and Technology Review, Vol. 16, No. 1 (2017), 1–65 (43). 54Vijay Panday, “Artificial Intelligence’s ‘Black Box’ Is Nothing to Fear”, New York Times, 25 January 2018, https://​www.​nytimes.​com/​2018/​01/​25/​opinion/​artificial-intelligence-black-box.​html, accessed 1 June 2018. 55See Daniel Kahneman and Jason Riis, “Living, and Thinking About It: Two Perspectives on Life”, in The Science of Well-Being, Vol. 1 (2005). See also Daniel Kahneman, Thinking, Fast and Slow (London: Penguin, 2011). 56Indeed, the latter is so powerful that the UK Government created a specialist body—the Behavioural Insights Team (popularly known as the Nudge Unit) designed to influence people’s behaviour without them realising. Website of the Behavioural Insights Team, http://​www.​behaviouralinsig​hts.​co.​uk/​, accessed 1 June 2018. 57Campolo et al., AI Now Institute 2017 Report, https://​assets.​contentful.​com/​8wprhhvnpfc0/​1A9c3ZTCZa2KEYM6​4Wsc2a/​8636557c5fb14f2b​74b2be64c3ce0c78​/​_​AI_​Now_​Institute_​2017_​Report_​.​pdf, accessed 1 June 2018. 58For an example of a functional approach to explainable AI, see Todd Kulesza, Margaret M.


pages: 654 words: 191,864

Thinking, Fast and Slow by Daniel Kahneman

Albert Einstein, Atul Gawande, availability heuristic, Bayesian statistics, Black Swan, Cass Sunstein, Checklist Manifesto, choice architecture, cognitive bias, complexity theory, correlation coefficient, correlation does not imply causation, Daniel Kahneman / Amos Tversky, delayed gratification, demand response, endowment effect, experimental economics, experimental subject, Exxon Valdez, feminist movement, framing effect, hedonic treadmill, hindsight bias, index card, information asymmetry, job satisfaction, John von Neumann, Kenneth Arrow, libertarian paternalism, loss aversion, medical residency, mental accounting, meta analysis, meta-analysis, nudge unit, pattern recognition, Paul Samuelson, pre–internet, price anchoring, quantitative trading / quantitative finance, random walk, Richard Thaler, risk tolerance, Robert Metcalfe, Ronald Reagan, Shai Danziger, Supply of New York City Cabdrivers, The Chicago School, The Wisdom of Crowds, Thomas Bayes, transaction costs, union organizing, Walter Mischel, Yom Kippur War

The appeal of libertarian paternalism has been recognized in many countries, including the UK and South Korea, and by politicians of many stripes, including Tories and the Democratic administration of President Obama. Indeed, Britain’s government has created a new small unit whose mission is to apply the principles of behavioral science to help the government better accomplish its goals. The official name for this group is the Behavioural Insight Team, but it is known both in and out of government simply as the Nudge Unit. Thaler is an adviser to this team. In a storybook sequel to the writing of Nudge, Sunstein was invited by President Obama to serve as administrator of the Office of Information and Regulatory Affairs, a position that gave him considerable opportunity to encourage the application of the lessons of psychology and behavioral economics in government agencies. The mission is described in the 2010 Report of the Office of Management and Budget.