Professor Cass Sunstein wrote a book with Richard Thaler titled "Nudge". It theorized that one way to help improve decisions about health, wealth, and happiness was to set up subtle ways to influence behavior towards more positive outcomes. Many of these principles have been proven to work in a variety of areas.
One example is with 401(k) programs. Everyone knows that they should be saving for retirement. Many companies (including Medtronic) offer generous matches to employees if they will contribute towards their own retirement. Even with all of these incentives, people still elect not to participate. Sometimes it could be as simple as someone just forgetting to fill out the paperwork! Whatever the cause, this choice could end up being a significant liability in the long run to the employee. One simple solution is to change the default position. Instead of having employees elect to participate, some companies are starting off with automatic enrollment in the program. Participation is still voluntary. The catch is that those who don't want to join must take the active step to fill out the paperwork to withdraw from the program. This simple reversal makes significant, double-digit improvements in the participation rate!
This type of change is actually being investigated in the US government. There is a "Social and Behavioral Sciences Team" that is actively searching for ways to help make government work just a little better. Their nickname is the "Nudge Unit". Through emphasis on changing the design of programs, they are working to help improve the function of the various departments without massive infusions of capital. The result? Small changes that are creating outsized results at very low costs.
What's most important about all of this is that none of it is based on chance. Each of these tweaks is subject to rigorous testing. Using a model similar to A/B testing, small scale pilot programs are compared against the standard operating procedure. Changes are only made if the pilots can prove the overall value of the concept in the real world.
The results so far are impressive, suggesting that their work is going to save millions and possibly billions of dollars. And because the cost of these tweaks is so low, even moderate impacts yield extraordinarily high benefit-cost ratios.
In one case, the researchers tweaked some of the printers (but not others) linked to some Department of Agriculture computers so that whenever people tried to print a single-sided document, a pop-up message appeared to remind them how to make two-sided printing their default. On the printers they tweaked, 52 percent of all print jobs were double-sided, compared with 46 percent on the others. This increase of 6 percentage points may not sound like much, until you realize that about 18 billion pages roll off federal government printers each year, according to the Social and Behavioral Sciences Team report, suggesting that carrying this out across the entire federal government could save more than half a billion pages a year.
The changes may even lead to more ethical behavior:
Small nudges can also help make people more honest. In one ingenious tweak, the research team added a prompt at the beginning of a federal-vendor tax collection form asking vendors to promise to report the truth. Those who were randomly selected to use this new form reported more taxable sales relative to those who used the old form. In just three months of using this form on just one small and obscure tax provision, this box caused people to volunteer an additional $1.6 million in taxes. Expanding this idea could potentially bring in billions of dollars in extra revenue.
I'm sure that there are many ways we might be able to make small changes in our own lives that could produce similar results. It's impressive to know that there is real data underpinning the recommendations. Perhaps these kinds of activities can help reduce the overall waste in the system and make government ever more efficient in the coming days.
Here is the link to the full article: http://www.nytimes.com/2015/09/27/upshot/a-better-government-one-tweak-at-a-time.html?rref=upshot&_r=0
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