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Influence better decision making by becoming a 'choice architect'

NEW YORK CITY — Decisions are oftentimes colored by environment. Consider the humble cafeteria.

“When you walk into a cafeteria, something comes first, something comes last,” Katherine L. Milkman, associate professor of operations, information and decisions at The Wharton School at the University of Pennsylvania, said at Strata + Hadoop World. “And the first thing you encounter is more likely to end up on your tray than the last thing you encounter — because [at the beginning], your tray is empty.”

That’s not accidental; it’s the product of “choice architecture,” a concept Milkman said was best described in the 2008 book Nudge: Improving Decisions about Health, Wealth, and Happiness. “The idea is that everywhere we make decisions, we’re being influenced by our environment — by the architecture around us,” she said.

Milkman, who relies on big data to analyze how people avoid making the choices that would seem to be in their best interests  (e.g. exercising more, cutting down on junk food intake), suggested that if environment plays such an important role in making decisions, maybe it’s time to take action. “Why not be a wise choice architect,” she said to attendees. “Why not try to improve decisions and facilitate better choices by, perhaps, putting ‘healthier foods’ first” in the cafeteria line of IT choices?

Based on her extensive work with A/B testing or split testing and her analysis of data both big and small, she provided five tips on how to become a choice architect:

Set helpful defaults. A “default decision” occurs when the decision maker takes no action and, instead, accepts what’s offered. She provided the example of organ donation; in countries where the default decision is to opt-out of an organ donation program, the number of organ donors is significantly lower compared to opt-in programs. That could be an example of laziness, Milkman said, or an example of consumer trust. “We take whatever the default is to be the policy recommendation, and that can be very powerful,” Milkman said. “Remember to design your defaults wisely whenever you’re creating a system, because they change behavior.”

Prompt people to plan whenever you want them to follow through on intended behaviors. In an A/B test for a free on-site flu shot clinics, Milkman sent two types of messages to different employees: Group A received a mailing that simply provided information about the upcoming event; group B received the same information and then asked employees to make note of the date and time for their own benefit. Those in group B took advantage of the free flu clinics more than those in group A. “[Prompting] works because, one, it helps the person think through obstacles,” said Milkman. “And, two, it also embeds plans more firmly in memory.”

The power of leveraging social norms or our tendency to want to follow the herd. Milkman pointed to an A/B test done at a hotel on towel reuse. Group A received messages that mentioned saving the environment as a reason to use fewer towels; group B received messages that encouraged joining fellow guests in the reuse of towels to help save the environment. “The second message was dramatically more successful in increasing towel reuse,” Milkman said. In a similar vein, Opower, a company that creates software for utility companies, sends out mailings that compare a homeowner’s energy usage to that of his neighbors. “A/B tests of this company has shown, year over year, this [messaging] reduces energy consumption by about 3% reliably,” Milkman said.

Create accountability. Holding someone’s feet to the fire works. Milkman pointed to a Michigan primary to prove her point. A decade ago, registered voters were sent different mailings that informed them they were being studied; others were mailed the voting record for the last two elections of everyone in the neighborhood — the record, not who a person voted for, is public record — and they were included on a list sent to their neighbors. “This accountability to neighbors increased voter turnout by eight percentage points, which to my knowledge is the single largest increase in voter turnout from any mailing that has ever been sent,” Milkman said, who also noted it was a “pretty aggressive” tactic.

Capitalize on fresh starts. Statistically, there are moments when people try to put their best foot forward — “at the start of a new week, new month, following celebrations of holidays and following birthdays,” Milkman said. “If you’re thinking when to provide tools to follow through on goals, these fresh start moments might be opportune opportunities to do so,” she said.