behavioral econ 101 for product design - action design dc 12 august 2014
DESCRIPTION
Stephen Wendel's & Zarak Khan's presentation at Action Design DC on 12 August 2014, giving an introduction to behavioral economics and how it can be applied to product design.TRANSCRIPT
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Behavioral Economics 101For Product Design
Action Design DCAugust 12, 2014
Steve Wendel (In: sawendel) Principal Scientist, HelloWalletZarak Khan (In: khanzarak) Senior Consultant, Booz Allen
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Help your users overcome obstacles
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What is it?
Thorndike et al. 2012 (American Journal of Public Health)
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500 Million Dollars in Savings on Energy Bills…
…And a billion dollar valuation
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Why? Are we just that lazy?
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What’s Behavioral Economics?
Core Lessons for Product Design
How Habits Fit In
Behavioral Methods for Product Design
Topics
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2
3
4
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About Steve
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And Zarak
Maybe someday I’ll grow up to be a management consultant and wear vests every day!
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What is it?
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Well, maybe not so thoughtful
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The first behavioral economist?
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Behavioral economics meets the public
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And practitioners
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Who uses it?
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What’s Behavioral Economics?
Core Lessons for Product Design
How Habits Fit In
Behavioral Methods for Product Design
Next Up – Core lessons for product design
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Bag of Tricks
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4 Big Lessons
1: We have two independent systems
2: We’re imperfect
3: Choices are relative, contextual & social
4: Friction Matters
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Lesson 1: Dual processes - a rider & an elephant
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Marketing that appeals to emotion
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Lesson 2: We’re just not perfect.
attention
willpower
memory
handling complex decisions
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So build accordingly.
attention
willpower
memory
handling complex decisions
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In menus or anywhere else
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And automate where possible
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Lesson 3: We’re unsure & look for clues: comparisons, context, and peers
“9 out of 10 people in your area have already paid their taxes”
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Especially in pricing
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Lesson 4: Minor frictions matter. A lot.
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And can be used practically in products
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What’s Behavioral Economics?
Core Lessons for Product Design
How Habits Fit In
Behavioral Methods for Product Design
Next Up – How Habits Fit In
1
2
3
4
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So what’s a Habit?
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So what’s a habit?
Adapted from Duhigg 2012
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What can they be used for? The good…
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And the bad
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Building them means taking action, repeatedly
Nir Eyal’s Model
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Remember, we’re often on autopilot
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What’s Behavioral Economics?
Core Lessons for Product Design
How Habits Fit In
Behavioral Methods for Product Design
Next Up – Behavioral Methods
1
2
3
4
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A philosophy and a method
There are no magic wands.
We’re always wrong.
Experiments can make us less wrong.
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Sorry, none of this works
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Because we’re always wrong
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So, be less wrong
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With experiments – A/B, RCT, ABC, etc.
Controlled Experiments: The Gold Standard
Statistical Models w/ Controls
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Summary
Behavioral econ: uses economics & psychology to understand quirks of behavior
We’re all fundamentally limited; design accordingly
Users are often on autopilot (habits, etc.)
Assume you’re wrongand rigorously test interventions
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Comments?
sawendel khanzarak
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Thank You!
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Find the behavioral obstacles
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Figure out what to change / try
Component: To Do This: Try This:
Cue Cue Action Tell the User What The Action Is
Increase Power of Cue Create Clear Affordances
Increase Power of Cue Clear the Page of Distractions
Reaction Increase Trust Make Site Beautiful and Professional
Increase Interest & Trust Social Proof
Increase Interest & Trust Display Strong Authority on Subject
Bypass Automatic Rejection Be Authentic and Personal
Evaluation Increase Motivation Prime User-Relevant Associations
Increase Motivation Loss Aversion
Increase Motivation Peer Comparison
Increase Motivation Peer Competition
Increase Motivation Make the Rewards Vivid
Decrease Costs Default Everything
Decrease Costs Lessen Burden of User Action (cheat)
Decrease Costs Reduce information required for user to proceed (simplify)
Decrease Costs Avoid choice overload
Ability Increase Logistical Ability Implementation Intentions
Decrease Resource Constraints Automate
Increase Sense of Feasibility (Self-Efficacy) (Positive) Peer Comparison
Time Pressure Increase Urgency Frame text to avoid temporal myopia
Increase Urgency Remind of prior commitment to act
Increase Urgency Make it scarce Increase Urgency Make it time-sensitive
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Want more?
www.designforaction.org
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Want more?
Well, four of you. Fame, friends and a free
ticket.
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Want more?
$99 for first 25 peoplewho use code “be_dc”
$150 for the next 50
$250 -> $400 for the rest
Capped at 400 people
www.designforaction.org