Read: The power of fifty bits

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The Praise. What happens when a practitioner writes about behavioral sciences’ insights and their applications? You get a refreshingly different perspective, refreshingly new examples for behavior change strategies that work, and in this particular case a refreshingly balanced discussion of the underlying ethical principles.

In contrast to many other authors in the popular behavioral science genre Bob Nease does not write about human irrationality. That is already a reason to recommend his book: The term irrationality is often misunderstood as stupidity, and some authors seem to emphasize this interpretation, pushing the need for paternalistic advice and guidance. Nease, on the other hand, is focusing on bounded rationality – limited cognitive ability, limited willpower, (and limited self-interest) – as the result of a long evolutionary process. People are not (that) inherently stupid and do not need to be guided by a better-knowing and well-meaning paternalistic entity, our decision processes and the resulting (in)actions are just maladaptive as a consequence of a rapidly changed environment. As a result, there is an intention—action gap. A gap that can be closed with the right choice architecture, or rather action-taking architecture. Since the intentions are already there it just needs to get easier to follow through with them.

Nease offers a small set of strategies that have this goal in mind: Making it easier to follow through (when the inaction is caused by inattention and inertia). The strategies are, of course, not new or unique to Nease’s insight. Default options, mandated choice, and framing are discussed at length in the academic and the popular behavioral science literature. Yet, the examples from his personal work experience and the reminders (for the action-taking-environment engineer) for the constant need to experiment make his book entertaining, instructive, and hence worthwhile to read.

Fifty bits is a rather short, concise, and focused book. There is no padding. Indeed, some parts could have been slightly more detailed. As a result, there is no excessive hurdle for picking up the book and reading it. I guess this feature of the book, making it easier to pick it up and read it in full, is intentional.

The critique. While Nease is very careful to present a balanced discussion, to consider the ethics of behavior changing interventions, and to call for intellectual honesty, avoidance of deception, and generally being “nice” there is an inconsistency in one of his arguments. At least, I cannot agree with his rationale for choosing between mandated choice and defaults with opt-out.

First Nease recommends requiring an active choice (chapter 3), what is sometimes also called “mandated choice.” Then, however, in chapter 5 (“Let it Ride”) he also recommends setting defaults with opt-outs and tries to establish a rule when to ask for an active decision vs when to rely on the default.

It is all linked to the “Effort [cost] of Active Choice”, “Effort [cost] of Opting out”, and the “Fraction who would Opt out.” Setting a default with opt-out leads to a larger behavioral effect at the population level. If the expected cost of opting out is lower (at the population level) than the cost of active choice the choice architect should implement a default with opt-out.

This may sound reasonable. So, let me add one of Nease’s insights that he offers in chapter 9 “Simplify wisely” under the heading “Why is easy so good?”

The bottom line is that what logically looks like a small bump on the road to better behavior psychologically looks more like a wall. (p. 135)

Seemingly small obstacles can be associated with high psychological costs. Looking only at the physical cost to opt out, let’s say looking only at the time it would take, neglects these psychological costs (to overcome inertia). Naively applied – as in Nease’s example –, the rule would too often recommend setting a default with opt-out instead of mandated choice.

Yet, there is another reason why I do not like this advice and cannot agree with the presented rationale for it.

The rule is based on a cost to society argument and the, at least, theoretical possibility to compensate the losers (i. e. aiming at a Kaldor-Hicks improvement). However, since compensation never occurs it remains unclear whether there is indeed an increase in society’s welfare. Further, this requires that the disutilities and utilities caused to the individual members of society can be compared across individuals and aggregated in a meaningful way. I would contest this assumption. (For more and more eloquent critiques on this kind of social welfare improvements see the works of Arrow, Baumol, Bergson, Little, … ) Mandated choice, on the other hand, does not require any of these interpersonal utility comparisons.

Obviously, if my critique is on such a technicality, a point that is often dismissed and ignored in practice it cannot be that bad. Let’s just say I would prefer active choice on principle. It seems more honest, more autonomy preserving, maybe even autonomy enhancing (if the action-taking-environment engineer does not add peer pressure).

Disclosure: The author, Bob Nease, sent me a copy of his book for free. Thank you, Bob! I enjoyed it.