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Government & Politics

Pitcture depicting the Kock Brothers

The behavioural design of the economy. On incentives and rewards

By | Citizen Behaviour, Government & Politics, Organisational Design

To get the rich and powerful to change their behaviour,
is the most wicked design problem of our time

Pitcture depicting the Kock Brothers

I have been thinking a lot lately about society’s inability to tackle the biggest challenges of our time. I don’t know about you but climate crisis, income inequality and radicalisation is scaring the hell out of me. We can’t seem to change the behaviour of those who are running the show. This is the most wicked problem of our time. I want to argue that the solution to change the course of history can be found in applying some Behavioural Design Thinking to this wicked problem.

The economy is a behavioural design

The best way to think about behavioural design is to think of it as the design of choices. The way you design a choice will largely determine the behaviour that follows from that choice. This simple and powerful first principle of Behavioral Designworks on all levels of human decision making, from small consumer decisions to big societal decisions. Let me illustrate this with a couple of examples:

  • If you want to sell an item, it matters a great deal if you give two or three options. You can change the value perception of a cake + coffee of € 5,- in comparison to a € 2,5 coffee instantly if you would introduce a decoy option of a € 4 cake in the middle. The introduction of the € 4 cake makes the € 5 coffee + cake suddenly look like a bargain.
  • You can change the value perpection of something if you don’t call it “cheap” but “great value for money”.
  • If you want to get a sales team to run like hamsters in a treadmill, introduce sales targets and continuously give them feedback on how they’re performing in comparison to their colleagues. With these simple interventions, you will have designed a choice system that triggers hyper-competitive game behaviour.

These applications of the lens of behavioural economics to human decision making is nothing new. What fascinates me is the idea that could also look at the economy through this lens. The economy is a behavioural design system that rewards particular behaviour with power and profits and punishes other behaviours with taxes and fines. If you want to transform the economy, you have to tweak the behavioural design in such a way that it rewards and incentives different behaviours.

(BTW: In this post we explore the concept of Behavioural Design in dept)

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It’s all about the incentives.

The problem with the current behavioural design of the economy is that it consistently rewards destructive behaviours, both with money, power and social status.

Society glorifies being rich and being powerful. To the extent that it rewards sociopaths like Donald Trump, Mark Zuckerberg, Jeff Bezos, Peter Thiel and Charles and David Koch (see picture above. BTW: David died this week) with power, prestige, admiration, etc.… The summit of social status in western capitalist society is “being rich”.

Society also rewards them with unlimited power to do whatever they want. Think about how Bezos played out communities against each other to fight for hosting the next HQ of Amazon. Amazon was offered 2.2 billions in tax cuts by the city of New York.

The third reward is financial. If you’re rich, you have access to all the tools to get even richer. The (capitalist) behavioural design of the economy offers unlimited financial rewards to people with capital. Every valuable thing in the marketplace is being sucked dry by the owners of capital. There’s so much cheap capital in the hands of investors that they can buy everything to help them to grow their wealth even further: They buy up houses in cities, they buy kindergartens, elderly homes, entertainment franchises, etc. They own more than 90% of all fortune 500 companies through the stock market, and instead of using profits to reinvest them in the companies, they use it to pay themselves high dividends.

This process is called the financialisation of the economy and explains why everything of value is rapidly becoming more expensive.

 

The solution: Change the incentives


If you want to understand the economy, understand incentives. If we’re going to change the economy, we’ll have to change the incentives. It’s as simple as that. If we want to fight inequality and climate catastrophe, we will need to change the social, financial and power rewards.

Governments and economist only tend to focus on tax incentives today, but I think we could have a far more significant impact if we work on the psychological rewards of social status and power.

We will need to challenge the social status of those who are destructing the planet and extracting wealth out of the economy. We will need to reward those with bold and brave ideas about the future with power.

A great example of this behavioural design change is the work that the Sunrise Movement in the US is currently doing. They are the movement that came up with the New Green Deal. They did a fantastic job of reframing the climate crisis story. Instead of talking about “saving the planet” and scaring the hell out of people, they turned climate action into a narrative about investing in wealth creation, job creation and the investment in thriving communities where kids have access to good education, clean water clean air and health care. That’s a story for which they’re getting bi-partisan support.

As a consequence, this broad support incentives politicians to embrace the New Green Deal, because it increases their chances of being elected. Meanwhile, they do a great job in glorifying business and community leaders who step up and take action and vilify those who are bringing the world on the verge of climate catastrophe.

Even the very rich are suckers for social status and recognition


In the end, no matter how rich we are, we all crave for recognition and social status. If we as a society succeed in taking those away from the current “heroes” of financial fame and instead reward the new heroes that bring society further through investing in a sustainable economy and a sustainable planet, we might succeed much faster in turning things around.  Saving the world is all about redesigning the incentives.

It’s as simple as that.

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How Norway nudges its citizen to drive electric

By | Citizen Behaviour, Government & Politics

The surprising story behind
Norways spectacular rise in EV’s

Did you know that in Norway more than 60% of all newly bought cars are electric? Here’s the surprising story of how they used smart Behavioural Design Thinking to fight climate change and achieve their aggressive CO2-zero ambitions. They came up with a couple of interventions that provide people with daily reminders of how awesome it is to drive electric.

Principle 1: Trigger selfish motives

The Norwegian Government doesn’t want to turn you into an eco-fanatic. Neither don’t try to convince you to make the transition because of the environment. They just make it much more attractive for you to drive electric. The brilliant part of their strategy is that they didn’t stop at your typical tax cuts – although they are enormous. They turned the benefit in something far more system 1: Electric cars get a free passage at the Toll Gates, get free parking in a lot of municipalities and get permission to drive on the bus lane. In other words: they get to experience the benefits every day.

This brings me to the second principle.

Principle 2: feedback

A driver of an electric car gets constant positive feedback on their behaviours. Every time they use the bus lane to skip traffic jam, or every time they pass a toll gate for free, they get a chance to look at all those combustine engine suckers. They get visual reminders on a daily basis of how stupid one must be to drive the old school way.

The opposite is also true: Every time you get stuck in a traffic jam, and you see a Tesla or an electric Kia legally using the bus lane to cut you off, you get a painful reminder that your not part of the priviledged class of the country.

Principle 3: Take away barriers

The big challenge is still to tackle “range anxiety”. More than often, people in Norway buy an electric car for their second car, with which they commute to work. For the long distances, they still don’t feel secure enough that they could travel comfortably without having to freak out about finding a re-charge station on time. Norway is investing rapidly in charging infrastructure. Ability is not a detail.

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What can we learn: Re-think incentives

First and foremost, we can’t compare apples with pears. Norway can issue this enormous tax cut because the country can afford it. The state – ironically – lives of the export of oil. Furthermore: they have – unlike most other countries – a heavy taxation in place on imported cars. A tax cut on the imported electric car quickly makes a significant financial difference.

But what we can learn is that there are far more clever strategies to get people to switch to electric driving. Instead of using the traditional taxation-stick, we could come up with benefits that have a much higher psychological value:

  1. Legalize autonomous-driving asap: Last week I saw a guy driving his Tesla while reading his newspaper. I realized I just saw the future. And it looked frikking cool.
  2. Give visual priviliges in traffic: To be allowed to cut traffic Jams by using the emergency lane, especially in a country like the Netherlands, will give you a guaranteed daily dopamine rush to the brain.
  3. Replace most parking spots in big cities like Amsterdam with parking spots that are exclusive for electric vehicles. Having to park your diesel on the outskirts of town, while having to take public transport to the city centre, meanwhile having to watch Electric Vehicle owners parking their car next to the canals for free: priceless.

The green revolution is coming.

We’re only using the wrong incentives to make it attractive.

Update: This post is the first in a series of a posts on how to use Behavioural Design thinking to tink about the climate crisis.

Want to learn more?

If you want to master the science of influence yourself, you could consider enrolling in our two-day course Behavioural Design at our SUE | Behavioural Design Academy. You can download the Academy brochure.

Or maybe you currently have a challenge in which you want to influence choice or change behaviour. Please, take a look at our Behavioural Design Sprint. It might be the answer you’re looking for.

Or could be you just would like to get to know us a little better. We happily introduce ourselves here.

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how to influence the ones at power

How to influence those in power?

By | All, Citizen Behaviour, Government & Politics

How do you influence those in power? Have you seen the talk that Observer journalist Carole Cadwalladr did at the official TED2019 conference last week? Her performance became a viral sensation because she did what nobody dared to do before. In a conference, sponsored by Google and Facebook and with their high-priests Mark Zuckerberg, Sherryl Sandberg, Sergei Brin, Larry Page and Twitter-CEO-turned-mindfulness-hipster Jack Dorsey in the room, she named and shamed them in front of their peers and the whole world. For how their platforms are undermining democracy, and for how they keep refusing to look that dirty truth in the eyes.

Carole Cadwalladr speaking at TED2019

Carole Cadwalladr speaking at TED2019 – click for video

Influence 1: Public shaming works

Of all the efforts to get these leaders to take action for the havoc their platforms are causing to society, this might be the most powerful one. It reminded me of my favourite quote by the American philosopher Richard Rorty:

“We resent the idea that we shall have to wait for the strong to turn their piggy little eyes to the suffering of the weak, slowly open their dried-up little hearts. We desperately hope there is something stronger and more powerful that will hurt the strong if they do not do these things.”

Rorty argued that the only way to change the behaviour of the ruling elites is to persuade them that it’s in their interest to do the right thing. The robber barons agreed to more human labour laws, only when it became clear that the alternative was a revolution.

Influence 2: We’re suckers for social status

We, humans, are total suckers for social recognition. We’re continually signalling our desired social status to others through our cars, the house we live in, our job titles, our relentless attempts to build and maintain our personal brand on social media, etcetera.

Being wealthy and successful is the highest form of social status you can achieve in Western Society.  The problem is not “success” as such, but the cultural narratives that surround success. One of those dominant narratives is that both success or failure is your achievement. (It’s not, it’s your social background that determines the number of opportunities you will get).

Another one is that the State is bureaucratic and corrupt and you should outsmart the State by paying as little taxes as possible. Being successful is all about out-smarting the State. However, everything that contributes to opportunities and success (the availability of talent, infrastructure, business partners) is being paid for by taxes.

Influence 3: Villify and glorify

Lot’s of people thought it was an absolute disgrace how fast the super-rich in France pledged more than 1 billion (!) Euro for the restoration of the Notre Dame Cathedral. If it’s that easy for them to give away, then why not give all that money to societal and environmental problems, that are in part being caused by their greed? Their behaviour is obscene, and we should remind them of their obscenity.

If you want them to do the right thing, turn them into heroes for doing the right thing. Let’s not do this by applauding them for their philanthropy schemes, but for contributing to the general well-being by paying their taxes. The real heroes of society are all the entrepreneurs who create jobs, contribute to building thriving communities, try to come up with new business ideas to tackle the environmental challenges, etc.

I hope Zuckerberg, Sandberg, Brin and Page opened their piggy little eyes last week at TED19. I hope they are gradually starting to realise that society doesn’t think of them as heroes anymore,  but as the crooks who crippled democracy, just because it made their billionaire shareholders even richer.

Want to learn more?

If you want to master the science of influence yourself, you could consider enrolling in our two-day course Behavioural Design at our SUE | Behavioural Design Academy. You can download the Academy brochure.

Or maybe you currently have a challenge in which you want to influence choice or change behaviour. Please, take a look at our Behavioural Design Sprint. It might be the answer you’re looking for.

Or could be you just would like to get to know us a little better. We happily introduce ourselves here.

How Brett Kavanaugh and his Republican Senators only made it worse

How The Senate Hearing of Brett Kavanaugh turned into a framing nightmare for Republicans

By | All, Government & Politics

Framing Blunder 1: Attack a likable opponent

In theory, a Senate hearing is supposed to be nothing more than a carefully crafted show to shape public perception. The stakes for the hearing last night were enormous. Republicans have a small window of opportunity to install an extreme conservative Supreme Court Judge who can block every progressive legislation for the next 40 years. There’s only little problem: The guy is being accused by several women to be an alcohol abusing sexual predator.

How Brett Kavanaugh and his Republican Senators only made it worse

So what do you do? How do you solve this problem? The classic Republican approach is following one of Roger Stone’s Rules: Attack, Attack, Attack, Never Defend. They knew they had to discredit the female accuser. But they had two big problems:

  1. Mrs Ford is a Professor in Psychology. A woman who can’t be out-bluffed. She’s tough as a nail.
  2. The similar case of Anita Hill, who accused a Supreme Court Judge in 1991, had taught them that a group of old male Senators, attacking the credibility of a victim of sexual abuse, resulted in both a PR and an electoral nightmare

Framing blunder 2: Misjudge the setting

They had figured it all out: They would avoid making this mistake again by letting a female prosecutor doing the questioning of Mrs Ford. And they would do the questioning of Brett Kavanaugh. The spectacle that followed was a disaster. A hand grenade exploding in their face. As fans of political framing it reminded us of watching a Bruce Willis movie with your friends, eating popcorn and yelling at the scream. This is what happend:

  1. First of all the prosecutor turned out to be an ice cold woman. The contrast with the decent and likable Mrs Ford couldn’t be sharper.
  2. As a result the Senators in the back looked like a bunch of cowards for not daring to do the dirty work themselves.
  3. The contrast with Brett Kavanaugh was enormous. He acted agitated, bothered, offended, throwing all kinds of accusations at everyone, interrupting senators, etc. Let’s say that he did a great job in confirming the image of a high school bully called Brett. Not the kind of temper you want for a Supreme Court judge.
  4. Mrs Ford did a brilliant job in speaking in System 1 terms. She captured the imagination, which is way much powerful than talking to the rational mind. When she was asked about the strongest memory of the abuse she painted an incredibly powerful image: ““Indelible in the hippocampus is the laughter, the uproarious laughter, and their having fun at my expense. I was underneath one of them while the two laughed. Two friends having a really good time with one another.”

Framing blunder 3: Don’t Think of an Elephant

The most disastrous part had yet to come. Republican Senators tried to help Kavanaugh by posing all kinds of questions about his drinking behaviour. That would allow him to deny the accusations. But one of the first rules of political framing, named after the essential book by George Lakoff: Don’t Think of an Elephant. If you repeat the frame, even if you try to deny it, you make the frame stronger. The classic example of this is when President Nixon said: I am not a crook. That’s the moment when his days were over. He got stuck with the word “Crook”.

Now picture this: A group of old Republican Senators, who kept asking questions to Kavanaugh about sex and alcohol. The more they asked the worse he sounded. They asked him if he ever passed out. If he ever woke up not knowing where he was? How much of a drinking problem does he really have? It was a gift that kept on giving. The only conclusion you could think of when watching this spectacle: This guy is guilty.

More Behavioural Design Thinking on Framing:

The consumer behind the rise of Trump (English)
Power Talk: How framing reality determines our perception (English)
Campagnes zijn smerige Framing oorlogen (Dutch)
Hoe progressieven moeten leren Framen (Dutch)

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How to win wars by influencing people’s behaviour

By | All, Government & Politics

When terrorism is staged for YouTube, and all sides are media-savvy, the military is turning to the behavioural sciences for help. In 1955 Robert Oppenheimer, the physicist who led the project that developed the first atomic bomb, addressed the American Psychological Association. He warned that both physics and psychology could endanger humanity but that psychology “opens up the most terrifying prospects of controlling what people do and how they think.” Despite Oppenheimer’s warning, the idea that you could change human behaviour to win a war, rather than winning a war to change human behaviour, languished as an also-ran in the cold war arms race. But as information technology has begun to globalize and behavioural science has entered the mainstream, there is an increasing move to put psychology at the center of military operations.

Read the whole article

Author: Vaughan Bell
Published in: The Guardian
Publishing date: 16 March 2014

Cover image by DVIDSHUB under Creative Commons License.

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