WEEK 3 – Nudge: Influencing Behaviours
Lecture 5 – Follow Through Plans and Goal Setting
Commitment:
Sophisticates: realise they are present bias.
o People in advance want to save for retirement, exercise, diet, etc.
o People realise that when tomorrow becomes today, they will spend earnings
rather than save, they will watch tv rather than exercise, and eat junk food
rather than diet.
Naïfs: do not realise they are present bias.
o People in advance want to save for retirement, exercise, diet, etc.
o People believe that when tomorrow becomes today, they will save, exercise,
and diet.
People are both farsighted planners and myopic doers:
Planner: makes decisions in advance, anticipates dangers of present bias.
Doer: makes decisions in the heat of the moment, exhibits present bias.
The ‘planner’ makes use of tools to prevent the ‘doer’ from exhibiting present bias.
Since sophisticates anticipate present bias, before reaching the ‘heat of the moment’,
they may attempt to restrain their future selves.
Increasing commitment:
Through commitment devices
o Restricting own set of choices in the future to control future impulsive
behaviour.
Limit choices to those that reflect long-term goals.
Mechanisms that impose restriction of choices are commitment
devices.
o Are used by the planner to prevent the doer from exhibiting present bias.
o Two key features:
People must voluntarily elect to use them.
People must be self-aware about the gap between current and
future selves.
People must associate consequences with their failures to achieve their
goals.
Immutable: consequences cannot be reversed.
Mutable: consequences can still be changed.
o Increase the effectiveness of commitment devices:
Opt-out instead of opt-in
Make enrolment as easy as possible
Create larger obstacles to temptations by increasing the costs of giving
into temptations.
Make your commitment well-known, thus putting your reputation on
the line.
Make a monetary contract with someone to increase the benefit of
staying on track.
Provide positive feedback.
Choose challenging, but attainable goals. Keep goals salient.
, Setting deadlines
Temptation bundling
o Harness people’s impulsivity to get them making healthier choices:
Only grant access to a desired ‘want’ when a person engages in a
‘should’.
People might get more value out of this ‘bundle’ than the sum of its
independent parts.
Goal setting theory:
How do goals affect performance?:
o Direct attention
o Lead to greater effort
o Increase persistence in face of obstacles
Necessary conditions:
o Commitment
Importance of goal (value-driven)
o Specific clearly defined.
o Feedback on goal
o Feasibility of goal external and internal (self-efficacy)
Dark side of goals:
o A narrow focus that neglects non-goal areas.
o Distorted risk perception.
o A rise in unethical behaviour.
o Corrosion of organizational culture deceased
cooperation.
o Reduced intrinsic motivation.
How can we nudge ourselves to reach our goals?
Theory of planned behaviour
Intention gap: what people intend to do, and their action
behaviour can be different.
How to close this gap?
Make the intention easy to implement.
o Turn a non-automatic/effortful behaviour to an automatic/effortless behaviour.
o Become aware of potential obstacles.
Make the automatic (non-desired) behaviour difficult to implement.
o Barriers, costs, etc.
How can we do this?
o Make the goal more appealing by changing the distance to it.
o Plan making.
Goal gradient:
Actions closer to the end goal seem more impactful (the closer you
get to the goal, the ‘faster you run’ the more motivated you are to
get it). This can be used for motivation by creating sub-goals.
Lecture 5 – Follow Through Plans and Goal Setting
Commitment:
Sophisticates: realise they are present bias.
o People in advance want to save for retirement, exercise, diet, etc.
o People realise that when tomorrow becomes today, they will spend earnings
rather than save, they will watch tv rather than exercise, and eat junk food
rather than diet.
Naïfs: do not realise they are present bias.
o People in advance want to save for retirement, exercise, diet, etc.
o People believe that when tomorrow becomes today, they will save, exercise,
and diet.
People are both farsighted planners and myopic doers:
Planner: makes decisions in advance, anticipates dangers of present bias.
Doer: makes decisions in the heat of the moment, exhibits present bias.
The ‘planner’ makes use of tools to prevent the ‘doer’ from exhibiting present bias.
Since sophisticates anticipate present bias, before reaching the ‘heat of the moment’,
they may attempt to restrain their future selves.
Increasing commitment:
Through commitment devices
o Restricting own set of choices in the future to control future impulsive
behaviour.
Limit choices to those that reflect long-term goals.
Mechanisms that impose restriction of choices are commitment
devices.
o Are used by the planner to prevent the doer from exhibiting present bias.
o Two key features:
People must voluntarily elect to use them.
People must be self-aware about the gap between current and
future selves.
People must associate consequences with their failures to achieve their
goals.
Immutable: consequences cannot be reversed.
Mutable: consequences can still be changed.
o Increase the effectiveness of commitment devices:
Opt-out instead of opt-in
Make enrolment as easy as possible
Create larger obstacles to temptations by increasing the costs of giving
into temptations.
Make your commitment well-known, thus putting your reputation on
the line.
Make a monetary contract with someone to increase the benefit of
staying on track.
Provide positive feedback.
Choose challenging, but attainable goals. Keep goals salient.
, Setting deadlines
Temptation bundling
o Harness people’s impulsivity to get them making healthier choices:
Only grant access to a desired ‘want’ when a person engages in a
‘should’.
People might get more value out of this ‘bundle’ than the sum of its
independent parts.
Goal setting theory:
How do goals affect performance?:
o Direct attention
o Lead to greater effort
o Increase persistence in face of obstacles
Necessary conditions:
o Commitment
Importance of goal (value-driven)
o Specific clearly defined.
o Feedback on goal
o Feasibility of goal external and internal (self-efficacy)
Dark side of goals:
o A narrow focus that neglects non-goal areas.
o Distorted risk perception.
o A rise in unethical behaviour.
o Corrosion of organizational culture deceased
cooperation.
o Reduced intrinsic motivation.
How can we nudge ourselves to reach our goals?
Theory of planned behaviour
Intention gap: what people intend to do, and their action
behaviour can be different.
How to close this gap?
Make the intention easy to implement.
o Turn a non-automatic/effortful behaviour to an automatic/effortless behaviour.
o Become aware of potential obstacles.
Make the automatic (non-desired) behaviour difficult to implement.
o Barriers, costs, etc.
How can we do this?
o Make the goal more appealing by changing the distance to it.
o Plan making.
Goal gradient:
Actions closer to the end goal seem more impactful (the closer you
get to the goal, the ‘faster you run’ the more motivated you are to
get it). This can be used for motivation by creating sub-goals.
