Design is never neutral.
Take this experiment. At their jobs, people presented with the choice to save as a default option, rather than a plan to opt into, nearly quadrupled their savings.
We are prone to status quo bias. We favour the existing reality rather than exerting the mental effort to change. Simply, our brains are always seeking to minimise effort whilst maximising pleasure. (*Curious about why? Scroll to the bottom.)
Choice architecture: Better decisions, less effort.
The experiment above shows the power behind “choice architecture.” Think of choice architecture as the blueprint that determines how options appear in our environment. Popular examples could be restaurant menus or even something as silly as target marks in a urinal. Briefly, it is the way an environment is designed that influences your interactions with it.
Businesses and policy makers have long used choice architecture to influence consumer decisions. At the individual level, there is a growing appetite to become our own “choice architects” to design personal environments that help us make better decisions without the unwanted efforts. Luckily today, products increasingly allow for personalisation to help us do just that.
You can alter how you present yourself with options and information to behave in the way you intend to. Here are three simple questions to get you started on becoming your own choice architect:
Are you visual? Choose a mobile banking app that can keep track where your income and expenses go every month.
Do you have trouble keeping yourself accountable? Surround yourself with people that can pinch you when you’re steering away from good habits.
Do you find it easy to start something new, but hard to keep at it? Design an environment with simple, small milestones that are clearly listed with regular reminders to meet those deadlines.
While these questions seem arbitrary, they’re based on the main tenets behind behavior change: combining intrinsic motivation and extrinsic or social motivation, incremental change over big leaps and accountability tactics.
By applying choice architecture, you’re more capable of achieving your goals without the additional effort that makes it all seem less appealing. Whether it’s better health -- or greater financial wellbeing -- your odds are better when you’re the architect of your own future.
So go ahead. Start designing.
For further browsing and reading check out:
Video: techniques for better decision making by choice expert Sheena Iyengar (minute 10.25 for savings focus).
*Additional commentary: Why are default options so powerful?
We naturally stick to inertia; it’s easier on our brains. Remember the experiment we mentioned at the start? Imagine choosing between meeting friends after work versus going through that new savings plan? What would you rather do? Well… That’s just what a recent Financial Times poll of millennials in London found: we prioritise spending time with friends, often at the expense of thinking much about saving. This is where designing environments conducive to automatic action can help us have it both ways.
Defaults options also work because they help reduce loss aversion or our tendency to perceive losses as greater than gains. Try asking a friends whether they prefer earning £100 or avoid losing £100. They’ll generally prefer not losing £100. We naturaly like holding on to what we have. While saving generally translates into future wealth, we can also perceive it as loss: less money to spend today. But, if we design a way to earmark our earnings by deducting a portion for savings with automatic investments we can help bypass loss aversion.
This article was written by our guest contributor Rebecca Van Roy, Behavioural Science Consultant.
Rebecca consults on what drives human behaviour and how to improve and predict decision making. She has worked in tech, health, international development and energy in Washington DC and London, helping organisations design better products and services. She holds an MSc in Decision Sciences from London School of Economics, an MA in Communication and Digital Technologies from Johns Hopkins University and a BA in International Economics from University of Richmond. She can be reached at email@example.com.