Behavioral science for your business
Behavioral Science – studies how people make decisions, behave, and respond to incentives, programs, and policies.
Behavioral Economics combines Judgment & Decision-Making, Psychology, and Economics. The behavioral science fields have identified over 200 biases and heuristics people use to make daily decisions.
Behavioral Science, including behavioral economics, considers these to help people make better decisions.
Why did it emerge?
Economics assumes that people make rational decisions, which reality contradicts. Psychology deals only with mental processes, less with the behaviors that result from those processes. Behavioral economics comes to unite these two disciplines.
Judgment & Decision Making applies to Marketing, Behavioural Finance, Customer Behavior, Organizational Behavior, and Medical Decision Making.
Behavioral Change
Different disciplines include Behavioural Economics + Cognitive Psychology + Social Psychology + Learning Theory, + Evolutionary Psychology.
Human behavior is influenced in three directions
1. Internal Drivers. Here we find our habits, cognitive biases, emotions, and attitudes (beliefs).
2. Physical space. Here we see the context in which we find ourselves and the opportunities that arise.
3. Social. The social norms that guide our decisions.
To change our behavior, we need three elements. Depending on the model (e.g., BJ Fogg or COM-B Model), these are named differently but achieve the same things.
How to change behavior
You should look at these three elements to understand how to change people’s behavior. Depending on the context, there are other frameworks and factors to consider, but for simplicity, COM-B is easy to use and contains main behavioral elements.
Cability + Motivation + Opportunity = Behavior
Capability – Psychological factors. Do people have the cognitive capacity to perform that behavior? Do they believe they can do that thing?
Motivation – Reflective and automatic factors. Do people have sufficient motivation to act? Does what we want them to do align with what they want to do?
Opportunity – Physical and social factors. Is there a context for doing that behavior? Is there a social influence to make them act?
These three tiers influence each other.
Once you determine what factors influence your target audience’s behavior through research, data, and observation, you can use some intervention that addresses those obstacles.
Some of them are below. Modeling, Training, Environmental Restructuring or Persuasion, etc. (Michie S, Atkins L, West R. (2014) The Behaviour Change Wheel)
Depending on the problem, I use only one type of intervention or combine the elements.
If a product isn’t selling, we can create an intervention that includes the following:
- Information – what are the product’s benefits;
- Context Change – better positioning on the site or a persuasive LP;
- Process Design – a frictionless experience for the customer; and Incentives.
How to use Behavioural Science
| Decision Facilitation | Preventing decisions | |
| Helping consumers | Nudge: making things easy for people, benefits, and social norms | Putting Decision points to help people think before they act; reminders. |
| Harming consumers | Sludge: Reducing options; Add-ons without people’s consent. | Making it difficult to unsubscribe, return products, and change settings and options. |
Some types of biases are targeted when building interventions or thinking about solutions.
Cognitive biases used in behavioral economics
Behavioral science studies how people make decisions, behave, and respond to incentives, programs, and policies. Specialist teams use rigorous methods to measure the effectiveness of their interventions.
These interventions can be based on the following:
1. Providing information in a way that is easy to understand, clear, and actionable (where appropriate).
E.g., instead of “this cake has n calories, of which x carbs, y carbs, etc. “a better option would be “if you eat this cake, you will have to run 5 kilometers, which is X calories”.
2. Simple processes help people understand what they need to do and make it easy for them to take action.
Ex. Instead of a website design where people have to go over four pages to order something, and at the end, the prices are shown separately without a total (so they have to calculate how much it costs mentally), a more straightforward flow, broken down into chunks, would bring better results.
3. Default or Opt-out programs.
E.g., Instead of giving the person 20 options and letting him choose, you might as well create fewer options, with a preferred one that you know would help him if he selected it. Or You automatically enroll him in programs for his benefit, and if he doesn’t want to participate, he should try to opt out/unsubscribe.
How might businesses fail?
1. In organizational change programs. Instead of understanding the human context, social influences, or habits, companies jump to training, incentives, or restrictive policies.
2. In communication campaigns. I often see how businesses create messages, ads, videos, and emails, thinking they will hit the mark; then, they notice that their messages don’t have the desired impact. They ignore, again, how people decide.
3. In creating products. Instead of discovering the real needs of consumers and understanding how much they are willing to solve their problems, they make unwanted products and services or ones that don’t meet actual demand.
Glossary
Main Terminology
System 1 thinking – is automatic, fast, and often unconscious, so we don’t realize it. Being automatic and efficient, it does not require much energy and attention on our part. It is, therefore, subject to mistakes and biases. We use it 95-97% of the time. (In-depth sources on these – Thinking fast and slow – Daniel Kahneman, Amos Tversky).
System 2 thinking – requires effort, is slow, and is under our control. It requires energy and attention and helps us filter out the “instincts” of system 1. We use this one 3-5% of the time.
Heuristics – A mental shortcut that helps a person make decisions, solve problems or judge a situation without much effort. It helps us navigate a complex world.
Cognitive Bias – People make mistakes because of the limited human ability to process information. It also translates into a biased attitude towards something (person, event, object, situation, etc.).
Nudge – is an intervention that takes into account human behavior. It can take many forms: changing the presentation of choices, also called behavioral architecture. It can also be reminders, warnings, automatic options set (Defaults), automatic opt-outs, etc.
A nudge preserves freedom of choice. E.g., I offer you three subscription packages, not just one. I suggest five investment fund choices and the possibility of reviewing others separately. I’ll put the bananas before you and place the candy bars out of sight.
Sludge – friction that impedes or hinders processes or outcomes. E.g., very long recruitment processes, cluttered forms, long waiting times, countless unnecessary steps on a website, etc.
Definitions
Behavioral Economics – studies cognitive, social, and emotional influences on economic decision-making.
Behavioral Science – studies how people make decisions, behave, and respond to incentives, programs, and policies.
Behavioral Design – recognizes how people think and behave and uses techniques and patterns to influence people’s behavior (in the physical or online environment).
Methods of measurement
RCT – Randomised Control Trial – is a scientific experiment used to measure an intervention’s effectiveness. It comes from the medical area, where a drug is tested in two groups. One control and one that will take that drug (the treatment group). Then it is observed if there are (significant) differences.
I do not use RTCs. Applying RTCs in other types of interventions often involves different experimental groups. For these, you need at least one data scientist.
Emilia Zăinel
Behavioral Designer & Senior Trainer
Get in touch: hello@behavilab.com
4 thoughts on “What is Behavioral SCIENCE?”