Archive for March, 2009

Richard Thaler at the Telegraph

March 31, 2009

Richard Thaler has been on a swing through the United Kingdom. Here he is at the offices of the Telegraph, talking about the importance of disclosure and transparency in regulatory reform.

Listen to the audio of a separate event at Demos here. Thaler extends his remarks on disclosure, which he says is on his mind frequently these days.

More transparency in airline pricing

March 31, 2009

Disaggregation meets disclosure in the world of air travel:

The airlines are aware that customers shop around online and that they hate trying to figure out fees. So they are currently working with other ticket distributors on a complex system that (Rick Seaney, the chief executive of FareCompare.com) said will expand the fee checklists and allow all distributors, whether an airline itself or an online travel agency, to be more uniformly precise in just what a customer is ordering.

“They’ll present a base ticket price in three or four categories, and then you’ll have a bunch of things you can add,” Mr. Seaney said. “You’ll get a base price quote, and then you’ll have a bunch of columns with choices that add something to the ticket. You going to see a whole new slew of amenities that you pay for in advance.”

…(And airline fare pricing) committee is evaluating the universe of fee-based extra services, and drawing up lists of uniform codes to make it easier to “compare apples to apples,” Mr. Seaney said. Among the items on that growing list are the usual things like prepaid checked bag (code 0AA), snack (0AT), aisle seat exit row (0A5), beverage (0AX), video games (0AF), passenger assistance (0BY) and wheelchair (0AH).

The choice architecture of Time magazine’s online poll of influentials

March 30, 2009

Time Magazine’s list of 203 finalists for the 100 most influential people in the world is out for 2009 and thanks to Nudge, Richard Thaler and Cass Sunstein are on it. Almost making the final list is a great honor for them, but in Sunstein’s household, he’s just playing catch-up (his wife Samantha Power made the final list in 2004).

On Time’s web site, readers are able to help editors pick the influentials. Already, it is clear that the online rankings are quirky, and that’s not just because readers have ranked Thaler and Sunstein dead last as of Sunday March 29. A number of readers on Freakonomics have pointed out how awkward some of the choice architecture of the site is. Say you want to vote on who belongs on the list. Time provides a slider on a 1-100 scale that visitors can use to score influence. But you might be easily confused. Should influential people get higher or lower numbers. Seems like you’d want to give higher number to influential people; but the winner of any best/worst list always comes in at No. 1.

Reader Tom notes that Federal Reserve Chair Ben Bernanke has an average score of 5. “People are interpreting the top 100 scale to mean 1 is the highest and 100 is the lowest,” he writes. E agrees that the slider is poorly conceived. “I started by sliding toward 1 to say the person has less influence (like 1%) and toward 100 for more influence…Now I think it’s ranking that the slider indicates, not ‘influence’ as the text indicates…. So I just gave up, not understanding the paradigm.”

Initially, Time gave no guidance about how to interpret the scale. Since the site went online, Time has added a description to the scale that makes clear 100 is “most influential.”

Meanwhile, a lot of people are voting for moot, the founder of the image bulletin board 4chan.org, and the leader with a score of 75. The Korean pop star Rain (he’s Korea’s answer to Justin Timberlake) finished second on the online poll, and is currently ranked No. 3. Online polls are one good way to open up the selection process to people, but they can be vulnerable to manipulation, especially when mobilized groups participate in small, relatively unknown ones. Basically, they are a highly flawed form of choice architecture.

Comedian Stephen Colbert recently outwitted NASA by asking his viewers to write him in as part of an online poll to name a room on the international space station. One U.S. congressional member is backing Colbert’s win, telling the Chicago Tribune, “Funding for space exploration is something where getting the public’s interest is challenging, and having Colbert would bring interest to NASA’s program. Over a quarter of a million people or so came online to chime in on the naming question…It just shows what happens when you reach outside the normal circles.”

Colbert is doing pretty well again in Time’s poll, holding steady at No. 4.

Why would an ice cream freezer lid ever be left open?

March 26, 2009

Because it’s easier to get the ice cream, of course. From Brian Wansink’s Food Think:

One cafeteria tested (how much effort people will go to to eat ice cream) by leaving the lid of an ice cream cooler closed on some days and open on other days. The ice cream cooler was in the exact same location, and people could always see the ice cream.  All that varied was whether they had to go through the effort of opening the lid in order to get it.  Even that was too much work for many people.  If the lid was closed, only 14% of the diners decided it was worth the modest effort to open it.  If the lid was open, 30% decided it was ice cream time.

Some readers may wonder why a store owner would ever leave the lid on an ice cream freezer open? Would the extra cost of the energy (not to mention the general environmental unfriendliness of such a strategy) be worth the extra ice cream sales? Maybe not for a typical freezer. But Wansink says there are some in Europe that keep ice cream frozen from the bottom, allowing owners to lose the lid. Any readers seen or shopped at these freezers before?

Hat tip: Tom Vanderbilt.

Black friday nudge on an average Thursday

March 26, 2009

There’s a marketing case study in here:

(Dr. Kivetz, of the Columbia Business School and Anat Keinan of Harvard) managed to change consumers’ behavior simply by asking a few questions to bus riders going to outlet stores and to other shoppers shortly before Black Friday.

The people who were asked to imagine how they would feel the following week about their purchases proceeded to shop thriftily for basic necessities, like underwear and socks. But people who were asked to imagine how they’d feel about their purchases in the distant future responded by spending more money and concentrating on indulgences like jewelry and designer jeans.

From John Tierney’s piece on oversaving.

Want people to lose weight? Put a mirror in front of the donuts.

March 25, 2009

Richard Thaler appeared on ABC’s Good Morning America last week. As part of the package, the correspondent ran an unscientific experiment of the breakfast buffet table at a local office, tweaking the presentation of the food to see the effects on eating habits. Elevating fruit on display platters is a good idea. Putting mirrors in front of the donuts works even better. The clip, which lasts about 5 minutes, is here.

Watch out for comcast’s customer service survey

March 25, 2009

The default settings are for good customer service, reports reader Donnie Hall:

I recently signed up for internet service with Comcast, using their online ordering system which is completed via online chat with a representative. This was a very good experience compared to talking on the phone, so I wanted to leave some great feedback at the conclusion of my order. When I reached the feedback screen, I noticed that all the answers had had their defaults set to the most “Comcast-friendly” option. I did have a good experience, but I felt like this took away from my good feedback, as most people probably would just submit the feedback form with all the defaults checked. Comcast is very clever if they are looking for ways to boost their customer service ratings.

Why we turn to our gut (a cartoon)

March 24, 2009

Rose Is Rose

Rose is Rose, reprinted in “The Functions of Affect in the Construction of Preferences” by Ellen Peters.

Nudge for sweet teeth

March 23, 2009

Former research assistant Heidi Liu passes along link with this tidbit:

Colgate normally gives out small product samples at annual events like “Oral Health Month” to remind target consumers, especially kids, to take better care of their teeth after eating sweets. This method does not drive strong results as most consumers tend to forget the message, even if they have collected the samples. Instead of giving away product samples, ice cream and cotton candy were given out. The stick carrying the ice cream and cotton candy carries a hidden message. Once consumers are done the message printed on the tip of the stick shaped like a toothbrush reveals “Don’t Forget” with the Colgate logo. This simple message effectively reminded consumers to brush their teeth.

Picture of stick is here.


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