Behavioural Economics

Tēnā rawa atu koe to Shane Ngan from Department of Internal Affairs for an entertaining and informative session. Shane shared his Behavioural Economics journey and a few fun exercises.

Shane was concerned about how 'insighty' some of our insights are ;) So he decided to return to Uni…and is finding it really hard :) Shane took us through a couple of exercises and got some good discussion going. 

Exercise #1:

  • Handing out to every second person
  • Population of Guangzhou
  • Influenced by the figure we are given…and it’s called “anchoring”
  • And we don’t adjust to it enough
  • How could we use this to improve our services?
  • The idea of “pre-existing” anchors – not being able to rationalise out of that
  • Credit card payments suggest a rate and people don’t deviate from that…but if you remove, research shows that people will pay more
  • Charities putting an amount, people won’t pay too much below as seen to be “socially acceptable”
  • Managing people’s expectations about what they might be entitled to
  • Uber’s option for tipping ($1, $2 or $5) and hiding the option not to tip (which is a sneaky default)
  • Existing ‘racist’ anchors, e.g. 48% of Māori smoke, x% of Māori men in prison population – look at reframing in a positive way
  • Social norms = a % of the population does something, then that is applied as the norm for what we do
Exercise #2:
  • Outcome = explain the rule for the sequence
  • Most people when they get it right don’t want to have another go – confirmation bias
  • So what can we do about confirmation bias in our work?
  • Prototyping and testing – if we’re only showing the one thing, how do we know it’s the right thing?
  • “design like you’re right, test like you’re wrong”
  • Want to be able to look for the breadth of response, rather than the positive
  • People think of the solution of what they want – “you are not your users”
  • HIPPO – Highest Paid Person’s Opinion – take them into testing
  • Being able to position yourself as the expert
  • Being able to have the conversations in a public space – not so confronting
  • Check out the Netflix doco “The Flat Earth” and “Everybody’s Doing It” Candid Camera video 

Veerle Snijders from Ministry of Justice has also very kindly provided some additional Behavioural Insights resources:

EAST framework by BIT 

Daniel Kahneman - Thinking Fast and Slow

A free course on the topic 

Behavioural Scientist newsletter

Podcast = Hidden Brain or Freakonomics 


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