On (ir)rationality in decision making | Alberto Alemanno | TEDxHECParis

Summary

This script explores the impact of behavioral sciences on decision-making, challenging the belief in our rationality. It delves into the framing effect, the power of inertia, social pressure, and cognitive traps used by marketers to exploit mental shortcuts. The speaker discusses how these influences can be both manipulative and beneficial, urging awareness and action to ensure our choices reflect our true interests, amidst the backdrop of big data and targeted advertising.

Takeaways

• 🤔 The script challenges the belief in our ability to make rational decisions, suggesting that external factors significantly influence our choices.
• 🍪 The 'framing effect' was demonstrated through an experiment where the display of food influenced consumption behavior, showing that context matters in decision-making.
• 🏥 The way information is presented (e.g., success rates vs. complication rates for surgery) can drastically affect our choices, highlighting the power of framing.
• 📈 Behavioral sciences, including psychology and behavioral economics, question our rationality and ability to make good life decisions.
• 💻 The 'power of inertia' is a mechanism where defaults significantly influence decisions, as people tend to stick to a predetermined position.
• 🗳️ Organ donation rates vary greatly between countries due to the default setting of being an organ donor or not, illustrating the impact of default choices.
• 👥 'Social pressure' is a mechanism where our behavior changes to align with the group, showing that social context is crucial in decision-making.
• 🛒 Marketers exploit our mental shortcuts through 'cognitive traps' to influence our actions and purchases, as seen in retail layouts and advertising.
• 👶 Companies use marketing strategies that target children with 'free' toys to influence family consumption, leveraging the persuasive power of kids.
• 📱 Social media platforms use our cognitive shortcuts to capture our attention and generate revenue through clickbait techniques.
• 🛂 Public authorities and regulators are taking action against exploitative practices, such as prohibiting pre-checked options for extra services during online transactions.
• 🏛️ The script concludes by emphasizing the importance of awareness and the non-existence of neutral design, as every design choice can influence our decisions.

Q & A

What is the main theme of the speech?

The main theme of the speech is the influence of behavioral sciences on our decision-making process, highlighting how factors like framing effect, power of inertia, and social pressure can affect the choices we make.

What is an example of the framing effect mentioned in the script?

The framing effect is exemplified by the experiment with two tables serving biscuits and fruit. Table A was arranged to encourage fruit consumption, while Table B was set up to promote chocolate consumption, leading to a 25% difference in fruit consumption between the two groups.

How does the framing effect influence the perception of medical outcomes?

The framing effect influences medical decision-making by presenting the same information in different ways. For instance, a surgery with a 90% success rate (Option A) is more likely to be accepted than the same surgery framed as having a 10% chance of complications (Option B).

What is the 'power of inertia' and how does it impact our decisions?

The 'power of inertia' refers to our tendency to stick with a predetermined position or default setting because we are cognitively lazy and prefer not to make additional choices. This can be seen in organ donation policies, where the default status of being an organ donor or not significantly affects the participation rates.

How does social pressure influence our behavior?

Social pressure influences our behavior by causing us to conform to the actions and norms of the group we are in. For example, we might eat more, drink more, or even exercise more if those around us are doing so.

What are cognitive traps and how do marketers use them?

Cognitive traps are mechanisms that exploit our mental shortcuts to influence our actions and decisions. Marketers use these traps to steer us towards buying products we don't need or to direct us in ways we might not be fully aware of, such as through bait-click techniques on social media.

Why do companies sometimes pay for special displays in stores?

Companies pay for special displays to make their products more accessible and appealing to children, who can be very persuasive in driving family consumption, even though children themselves are not the primary consumers.

What is the role of the framing effect in the layout of an IKEA store?

The framing effect in an IKEA store is used to guide customers through a set path, ensuring they see and browse through the store in a way that is designed to maximize exposure to products and potentially increase sales.

How does the European Union address exploitative practices in online services?

The European Union has taken measures to prohibit exploitative practices such as pre-checking extra services during online transactions, ensuring that consumers have to actively check the box if they want the service, and promoting the use of alternative search engines to provide a fairer online marketplace.

What are some positive applications of mental shortcuts by public authorities or employers?

Positive applications of mental shortcuts include designing environments that encourage healthier choices, like placing stairs more prominently than elevators, or using social pressure in reminders for paying fines, which can increase compliance rates without restricting choice.

What are the potential ethical concerns regarding the use of mental shortcuts in decision-making?

Ethical concerns include the legitimacy of manipulating decision-making processes without individuals' awareness or consent, the potential for exploitation, and the risk of undermining our autonomy and ability to make informed choices.

How does the speaker suggest we can protect ourselves from exploitative practices?

The speaker suggests that by becoming more aware of these practices, talking about them, and learning to spot them, we can better protect ourselves and make more informed choices in our lives.

Outlines

00:00

🤔 The Illusion of Choice and Decision Making

This paragraph explores the concept of choice in our lives, from simple decisions like what to eat or read to more complex ones like whom to vote for or where to live. It challenges the idea that we are rational decision-makers by demonstrating how external factors like context and framing can influence our choices without our awareness. The speaker uses the example of an experiment with fruit and chocolate to show how easily our decisions can be swayed. They also discuss how the way information is presented, such as success rates of surgery, can significantly affect our decisions. The paragraph introduces the idea that we are not as autonomous in our choices as we believe, and that our decisions are often influenced by psychological and behavioral factors.

05:04

🛍️ Exploiting Mental Shortcuts: The Power of Defaults and Social Influence

The second paragraph delves into how our mental shortcuts are exploited by marketers and businesses to influence our behavior and decisions. It discusses the concept of cognitive traps, which are mechanisms designed to take advantage of our mental shortcuts to steer us towards certain actions or purchases. Examples include the layout of IKEA stores, which is designed to guide customers through the entire shop, and the use of 'free' toys to encourage children to order full menus at fast-food restaurants. The paragraph also touches on the impact of social media and online advertising on our decision-making process, highlighting how these platforms use our cognitive biases to capture our attention and generate revenue. The speaker calls for public authorities to consider the implications of these exploitative practices and whether they should intervene to protect consumers.

10:05

🏛️ Nudging Towards Better Choices: The Role of Design and Policy

The final paragraph discusses the potential for 'nudging' individuals towards making better choices through thoughtful design and policy interventions. It provides examples of how employers and municipalities can encourage healthier behaviors, such as using stairs instead of elevators, and how social pressure can be leveraged to increase compliance with rules and regulations. The speaker also addresses the ethical considerations and potential pitfalls of such approaches, including the risk of undermining individual autonomy and the responsibility of public authorities to protect citizens from exploitative practices. The paragraph concludes with a call to action for greater awareness and education about these issues, suggesting that increased exposure and understanding can empower individuals to make more informed choices and resist being manipulated.

Keywords

💡Choice

Choice refers to the act of selecting between two or more possibilities. In the video's context, it is central to the theme of decision-making, illustrating how our choices may not always be as free or rational as we believe. The script mentions that life is about making choices, from the trivial to the significant, and how external factors can influence these choices, such as the framing effect in the fruit and chocolate experiment.

💡Framing Effect

The framing effect is a psychological phenomenon where the way information is presented influences the decision-making process. The video uses this concept to show how the display of chocolate and fruit influenced consumption patterns at the tables, demonstrating that context and presentation can significantly affect our choices, even when we believe we are making decisions freely.

💡Behavioral Sciences

Behavioral sciences encompass the study of human behavior through various disciplines like psychology, behavioral economics, and neuroscience. The video references these sciences to support the idea that humans are not as rational in their decision-making as they might think, and that our choices can be influenced by cognitive biases and external factors.

💡Inertia

Inertia, in a cognitive context, refers to the tendency to maintain a current state or course of action, often due to a preference for minimizing effort. The video discusses the 'power of inertia' to explain why organ donation rates differ between countries with opt-in versus opt-out policies, highlighting how defaults can significantly impact our choices.

💡Social Pressure

Social pressure is the influence that others have on an individual's behavior, often leading to conformity. The script uses social pressure to illustrate how our behavior can change when we are around others, such as adjusting to group behaviors like eating or exercising, showing that our choices are not only personal but also social.

💡Mental Shortcuts

Mental shortcuts, or heuristics, are cognitive strategies that simplify decision-making by reducing the time and effort required to process information. The video emphasizes that we rely on these shortcuts daily, often without realizing it, and that they can be exploited by marketers and others to influence our actions and choices.

💡Cognitive Traps

Cognitive traps are mechanisms that exploit our mental shortcuts to influence our behavior and choices. The video gives examples of how marketers use these traps, such as IKEA's designed path through the store or fast-food restaurants offering toys to encourage children, and by extension, parents, to make certain purchases.

💡Bait-Click Techniques

Bait-click techniques are strategies used in digital media to attract clicks on links, often using sensational or intriguing content. The video mentions these techniques as a way social media platforms capture our attention, with the goal of increasing engagement and generating revenue through clicks.

💡Public Authorities

Public authorities in the video are presented as potential protectors against exploitative practices that leverage our mental shortcuts. The script discusses how the European Union has taken steps to prevent certain exploitative marketing practices, suggesting a role for authorities in regulating to protect consumers.

💡Nudging

Nudging is a concept where subtle cues or prompts are used to guide people towards certain behaviors or decisions without restricting choice. The video provides examples of how nudging can be used positively, such as encouraging the use of stairs or paying fines, while maintaining the individual's ability to opt out.

💡Big Data

Big data refers to the large volume of data that can be collected, stored, and analyzed to identify patterns and trends. In the context of the video, big data is highlighted as a potential tool for both public authorities and marketers to understand and influence consumer behavior, raising questions about privacy and the ethical use of such information.

Highlights

Life choices extend to everyday decisions like what to buy and where to live.

People consider themselves good choosers, weighing options before making decisions.

An experiment showed that the display of food influenced consumption behavior.

Framing effect is a psychological phenomenon that influences decision-making based on context.

Organ donation rates vary due to the default settings in different countries, demonstrating the power of inertia.

Social pressure can significantly influence behavior, as seen in group dynamics.

Mental shortcuts are relied upon daily, indicating we think less than we believe.

Marketers exploit cognitive traps based on our mental shortcuts to influence purchasing decisions.

IKEA's store layout is a strategic use of framing and default paths to guide customers.

Fast food restaurants use 'free' toys to exploit children's persuasive power over family consumption.

Social media platforms use cognitive shortcuts to capture attention and generate revenue through clicks.

The European Union has prohibited exploitative practices like pre-checking extra services during online transactions.

Public authorities are being urged to protect consumers from exploitative use of mental shortcuts.

Employers and cities are using design nudges to encourage healthier behaviors, like taking stairs.

Text reminders are an intrusive yet effective method to prompt positive actions like saving or donating.

The use of footprints on the floor as a nudge to direct people towards trash bins is an example of subtle influence.

There is a debate around the legitimacy and ethics of using nudges without explicit consent.

The potential overuse of nudges could lead to a reliance on government intervention for decision-making.

Big data allows for the collection and exploitation of digital footprints, raising concerns about privacy and manipulation.

Increased awareness and discussion of these practices can empower individuals to recognize and act against them.

The speaker concludes that life should be a sum of our own choices, emphasizing the importance of autonomy.

Transcripts

Translator: Ana Joldes Reviewer: Robert Tucker

Life is about choice:

what to eat, what to read, whom to vote for,

but also what to buy, and sometimes where to live.

We cannot always choose in life.

But when we do, we generally consider ourselves very good choosers.

We stop, we think, we ponder the pros and cons of every single option,

and then finally we choose.

What I'm going to be trying to do today,

is to change the way in which you think about your own ability to take decisions,

decisions that really go to the best interest of yourself.

We just had a break, just a few minutes ago,

and there were two tables where biscuits and fruit were served.

Those of you who approached table A consumed on average 25% more fruit,

than those who approached table B.

Is it just a coincidence? Of course it is not.

It happens all the time.

We ran an experiment.

We played on the display of the chocolate and the fruit on the two tables.

We tried to induce consumption of fruit on table A

versus the consumption of chocolate on table B.

And that's what happened.

Do you start questioning your ability to take free decisions,

decisions that go to your best interest in your life?

If not, I have another illustration for you.

You just met your doctor, and it seems you have to go through surgery.

It is not a good decision

and before giving consent you would like to ask your doctor

how many probabilities of success you have.

The doctor knows the answer, and he can tell you that:

A. 90% of the patients who go through it are going to be okay,

or he could tell you that B. 10% of them are going to face complications.

If he chooses option A, around 70% of us will accept it.

But if he says B, only 35% will accept it.

Do you start doubting about your ability to make good choices?

Perhaps.

What I'm trying to illustrate today,

comes directly from the behavioural sciences:

psychology, but also behavioural economics

and some aspects from neurosciences.

And what all these disciplines are suggesting us,

is that we are not as rational as we believe.

They are questioning our ability to make good decisions in life.

What is behind the mechanism I just showed you in the break example,

but also in the doctor one?

It is called framing effect.

It basically says, that every single time we make a decision in life,

what is around us plays some role.

In particular, context matters -- remember that. Context matters.

What about this graph?

This graph portrays several European countries.

And we have two groups: we have the green countries, with a very low rate,

and some other group of countries, more significant, with a very high rate.

How can we explain such a difference?

We're talking about organ donations.

In some countries, the green countries, you are not a donor, unless you opt in.

You choose to become one.

You have to do something to become an organ donor,

if something happens to you.

But in the blue countries, you are actually a donor,

unless you opt out.

It's exactly the reverse.

The mechanism behind this is called power of inertia.

Yes, we are cognitively lazy, we don't like to choose.

We tend to stick to a predetermined position,

and that means that default matters.

I still have a mechanism to show you,

it is called social pressure, and you know it very well.

We all know that when we spend time with other peers,

we change our behaviour.

We tend to adjust to the behaviour of the group:

we drink more, we eat more, we can even do more gym,

if the people around us do so.

That means that social context matters too.

All what I'm trying to illustrate to you today,

shows that, in reality, we rely every single day on mental shortcuts.

We get shortcuts to decide, to act, and to survive.

We just have too many decisions to take, right?

The bottom line is that we think much less than we think we think.

This is disruptive.

And some people are smiling, even laughing,

some of you are not, because this is disruptive.

It is potentially disruptive for our own understanding of our own being,

but also for our understanding of society.

This is disruptive, and as it is often the case,

when it comes to new discoveries,

these new discoveries can be used for good or for bad.

You won't be surprised to hear that marketers learned about

how to use our mental shortcuts many years ago.

And what they developed are cognitive traps.

We know cognitive traps,

these are mechanisms that try to exploit our mental shortcuts

in order to reach us, in order to steer our actions,

to sell stuff we don't need,

and to steer us into a direction we are not necessarily aware of.

Did you ever wonder why in IKEA, you have to follow a set path?

You can follow it, you can always opt out, right?

But if you do, you're going to get lost. And many of you did. As I did.

Why so? Here is a default, but at the same time there's also framing.

Both mechanisms are at stake and the objective is very clear.

To bring you through all the shop.

You're going to see the shop as you watch and browse the catalogue,

exactly in the same way.

Sometimes marketers go even further

to encourage kids to order the full menu when they go to a fast food.

They give them 'free' toys. Wow, they catch the kids too.

And sometimes companies even pay for the special display that kids can reach,

in order to buy their products.

But, of course, kids themselves are not consumers.

But we all know, that kids can be extremely persuasive

when it is about driving family consumption.

What about our online experience?

We spend more time with a computer, than with people these days.

What is social media using to capture our attention?

You won't be surprised to hear they're using our cognitive and mental shortcuts,

they do it all the time.

What's the goal? To make us click. That's what generates revenue.

And in order to do so, they don't hesitate to use bait-click techniques:

weird pictures you see, and you really want to click,

and we all do click -- not much information there, but the goal is clear.

All that these ideas have in common, and all that these uses have in common

is to exploit our mental shortcuts. It is pretty clear.

And it is legitimate to ask ourselves, whether society,

and, in particular, public authorities, should not react.

Isn't it the duty of public authorities to protect us

from this exploitative use of mental shortcuts?

To give you an example: you're about to buy a flight ticket online,

and the airline used to offer you a lot of extra services

like insurance or extra legroom,

and usually when they do so, they pre-check,

they choose those options for you.

Why do they do so? Of course you know -- power of inertia.

You're not going to uncheck the box, and if you try to uncheck the box,

it will be complicated.

You will have to browse down and to identify this little hidden option:

'No insurance, I don't want it.'

Now, this practice, being considered to be exploitative,

was prohibited by the European Union.

They can no longer do it.

You are going to be the one checking the box if you really need the service.

Another example:

You're in Paris, and you're looking for a café.

'Café in Paris' -- that's what they're going to type in, and that's what you get.

These are the results.

But what about this little charming café you heard about,

but didn't really show up there?

Yes, that café could not afford to pay for any kind of fees

to appear on the top of the list.

What the European Union is asking Google today,

is to somehow help us, by showing alternative search engines,

that will enable us to find exactly that little café in Paris.

It is pretty clear what all those illustrations have in common.

They share this effort at somehow limiting the possibility

of using mental shortcuts to a bad purpose.

And this is the time for action, perhaps.

It is time to wonder whether we cannot all learn about those practices.

And perhaps this is happening.

Just think about your employer.

If he would like to keep you fit,

he could try to steer you towards the stairs,

instead of towards the elevator, the lift.

But also cities these days, municipalities and regions,

are doing exactly that.

In order to collect better and more fines, once they've been enacted,

they can send letters like this one:

'Dear Miss Fastdriver, we would like to remind you

to pay your fine for excess speed.

Most of your fellows already paid their fines.'

Social pressure in action -- you belong to the 5% who didn't.

Wow, this will increase, and it does increase all the time,

the amount of people who are going to pay their fine.

Other examples include the possibility of sometimes using footprints

which are on the floor to lead you to go towards the trash bin,

because these will reduce the cost for society to collect waste.

And what about texts? We receive texts all the time, it's pretty intrusive,

but it's a way to remind you to do, perhaps, positive things,

like saving for yourself,

or sometimes to pay and to give money to charities.

More and more countries around the world

are getting very interested in such an approach. Why?

The appeal is clear. Most of these applications are cheap.

It doesn't cost much to implement them.

But, of course, the best part of it is that they are choice preserving.

They let you opt out all the time.

If you want to take the lift instead of the stairs you can do it.

If you want to take the biscuit, you can do it --

and many of you did, I know it so.

What about the flaws?

There's a big legitimacy issue.

Don't you think you're better placed than anyone else

to think about your interest? Probably you are.

And what about ethical issues?

Don't you think you should be informed, when somebody is trying to trick you?

Perhaps you do.

And there's also a further flaw, if we follow this approach too closely,

We might give up our ability,

ask our government to intervene when it's needed,

with more severe actions.

At a time when our rationality seems to be compromised, or at least questioned,

we should really wonder what we are going to be doing with this.

And the answer is: We cannot do anything.

We have to act, it is pretty clear by now.

We are becoming aware of this,

and the bottom line is that no neutral design exists.

There will always be someone, who deliberately,

or without realising will be deciding for you.

This is becoming even more interesting today.

And perhaps more worrying.

In the time of big data,

our countless digital footprints can be collected,

stored and sold by data brokers.

And this happens all the time. There's an enormous potential there.

It is pretty clear. Public authorities could do the same.

Next time you smell popcorn when you walk into a movie theatre,

or you're about to sign a contract written in very small print,

or your kids are targeted by advertisers, well, you would be under their trap.

Should we be worried about this, should we be scared?

I don't think so.

The more we are exposed to these practices,

the more we talk about those practices,

the more we learn how to spot them.

They appear behind every corner, but we can learn from them --

and possibly try to act upon it.

And by doing so,

I think that our life could truly be the sum of our own choices.

Thank you.

(Applause)