What is Behavioural Science?
Behavioural Science (BeSci) is the study of the drivers of human decision-making. For example, It aims to explain the reasons why many of us don’t do as much exercise as we know we should, why people smoke and drink alcohol in quantities that are injurious to health and why we buy things we don’t need.
When may Behavioural Science be useful?
Regardless of what role you fulfil within your organisation, having an understanding of BeSci is a useful skill. We are all in the business of influencing other people. For example, in emails and conversations, we attempt to influence the decision-making of others. BeSci may be relevant if you work in:
- Client Coverage
- Customer Service
Why has Behavioural Science become so popular?
- Economists started to challenge their own discipline
- This occurred after they realised human behaviour often defies the laws of economic theory, the idea that we are rational beings and take the most logical courses of action. For example, traditional theories of Supply & Demand teach us, demand and price are inversely related. However, this is not the case for Veblen goods, which are in high demand because they are expensive, and Giffen goods which are difficult to substitute, and thus, can command higher prices
- Proliferation of large data sets
- The ubiquity of internet usage ensured we now have far more information about human decision-making than we’ve ever had before. Notably thanks to mobile devices which deliver vast quantities of contextualised information about what is going on inside our heads
- The quality of data that is available
- Historically, we’d have to ask people the reasons they made certain decisions, however, associated with this is false information. Technology removes the embarrassment factor that we feel when speaking to a real human being (i.e. medical appointments). When using online search engines, we feel more comfortable sharing our secrets, and thus, we gain more accurate information
- Governments saw it as a way of enacting their policy objectives more effectively
- In the aftermath of the 2008 Financial crisis, governments were under severe cost pressures, and thus, introduced the idea of “Nudge Units”, that could deliver cost-effective policy implementations. The Obama White House and the Cameron Government gave the official nod to this new approach
What is System 1 and 2 thinking, and when are they used?
- System 1
- Automatic, frequent, emotional and unconscious. This is often used to make fast and quick decisions. For example, when crossing a road, we use shortcuts (cognitive biases and heuristics) to avoid having to process large amounts of data for an otherwise simple task.
- Another example is the following: If you were asked to multiply 2 x 2, we would use our system 1 to get the answer. We use this method when we feel comfortable doing so, mainly when we’re dealing with familiar situations that we’ve come across before or where we think that there's no need to expand any energy on thinking too hard.
- System 2
- Effortful, logical, calculating and conscious. We use it for more complex decision making that isn’t quite as urgent. For example, if you were asked to multiply 17 x 67, most people will be using System 2 to calculate the answer.
How do Systems 1 and 2 interact with each other?
- The Elephant and its Rider
- The Elephant is the emotional brain, the Rider the rational one. At first glance, the Rider seems to be in charge and can determine the speed and direction of travel. However, when there’s a disagreement and push comes to shove, the Elephant usually wins, and as is the case with human decision-making, our emotional brain takes charge over logical thinking
- The Spokesperson and the Oval Office
- The Spokesperson is the rational brain and the Oval Office the emotional. The role of the Spokesperson is to communicate and relay the decisions made by the Oval Office to the outside world. The rational brain is desperately trying to make sense of the decisions it knows have already been taken by the Emotional brain. We're not using logical thought processes to make decisions, but rather to justify what our emotional brain has already decided to do