Summary Nudge week 3&4, all lectures, articles, book and videos!

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.