Newall, Walasek, Hassanniakalager, et al. (2023) on Gambling Risk Warnings

Philip W.S. Newall, Lukasz Walasek, Arman Hassanniakalager, et al., “Statistical Risk Warnings in Gambling.” Behavioural Public Policy 7(2), 219-239, 2023 [pdf available here].

• Warning messages in the gambling arena, when they are provided, tend to be generic and do not facilitate comparison across various betting options.

• Theoretical loss = (house edge) times (total amount bet), or, the expected price of a bet or bets; for instance, in European roulette, the house edge is 2.7%, so the theoretical loss of betting $100 is $2.70.

• Theoretical loss is a long-run concept and not salient for bettors, while their recent gambling experience is quite salient. But given that most of the social harm from gambling is tied to bettor losses, theoretical loss is a decent metric for the social risks of alternative wagers. 

• Expected prices (or theoretical loss) of gambling tends to be hidden from gamblers – but it would be possible to provide (sometimes approximate) theoretical loss information, or other related metrics such as house edge. (For games where player behavior affects the odds, the risk could even be personalized based on player characteristics.) Presumably gamblers (all else equal) would be dissuaded from forms of gambling with high theoretical losses. 

• Should gambling warnings also note volatility and the slow convergence to theoretical loss levels?

• Gamblers cannot identify vast differences in expected price on seemingly identical games.

• Some jurisdictions mandate “return to player”-style info; but players often do not understand it. And sometimes the info is hard to find and to see.

• Should the automatic reinvestment of small wins into a player's available gambling account be banned?

• In sports betting, longshots and “exact score” or other prop bets tend to have higher house edges – and these are heavily advertised.

Michaelsen, Johansson, and Hedesström (2021) on Experiencing Default Nudges

Patrik Michaelsen, Lars-Olof Johansson, and Martin Hedesström, “Experiencing Default Nudges: Autonomy, Manipulation, and Choice-Satisfaction as Judged by People Themselves.” Behavioural Public Policy, First View, 1–22, 19 March 2021. 

• This article examines how people feel about default nudges, especially with respect to their perception of their autonomy and their satisfaction with their ultimate choice. "We present three experiments (total N = 2083) where participants are subjected to opt-out default nudges and compared with participants subjected to opt-in or a no-default active-choice format [pages 3 and 4]."

• Study 1: MTurk folks consider whether to have “green” (and slightly more expensive) appliances in their (imaginary) new flats. There are three conditions: green (environmentally friendly) default (opt out); non-green default (opt-in); and active choice.

• The effect of the default is big, with about twice as many green appliances chosen with opt-out relative to opt-in; active choice leads to more green appliances than opt-in, too, but not as much more as opt-out.

• Participant ratings of their autonomy, satisfaction, and perceived threat to their choice freedom do not differ based on the condition. In particular, the opt-out default, which produces greener choices, does not lead to participant dissatisfaction.  

• Study 2 replicates study 1, but with a twist: now, half of the participants ae told about the default or active choice, and how default nudges are expected to influence choices. How does making the nudge transparent affect its influence on choices and satisfaction?

• It turns out that lots of participants don’t really understand the explanation of how the default nudge is supposed to work.

• The large impact on choosing green appliances from the opt-out default is replicated – and nudge transparency does not change that.  

• The participants give high ratings across-the-board for autonomy, but opt-out folks report slightly higher experienced autonomy and satisfaction than do their opt-in brethren.

• Study 3 aims to raise the stakes (slightly). Participants receive a 20 cent bonus, on top of the 50 cents they are paid to take part.  But they are given an opportunity to donate their bonus to a charity. The opt-out condition is where the bonus is defaulted to the charitable contribution. 

• Defaults continue to have consequences: opt-out folks are more likely to donate than are opt-in; active choice is in the middle; the three conditions have no effect on feelings of autonomy.

• With disclosure (and understanding), opt-in and active choice donations go up. (Again, the number of participants who do not understand the disclosure is fairly staggering.)

• Opt-out folks view the set-up as more threatening to freedom of choice, and full transparency raises everyone's view of such a threat – but despite that threat, people aren't really worked up over it. 

Colby, Li, and Chapman (2020) on Avoiding Healthy Defaults

Helen Colby, Meng Li, and Gretchen Chapman, “Dodging Dietary Defaults: Choosing Away from Healthy Nudges.” Organizational Behavior and Human Decision Processes 161: 50-60, 2020.

• Imagine a burger restaurant that makes carrots the default “side” – as opposed to French fries, say. Are people more likely to choose the carrots than if fries were the default? [Yes]. 

• Note that, unlike some environments with default nudges such as organ donations or pension registration, dining is an ongoing choice; so…

• …would people be less likely to return to a restaurant in which carrots are the default side dish?

• Two real-life(ish) and three hypothetical studies are conducted. In Study 1, university mugs are packaged with either M&Ms or a (healthier) fruit-and-nut bar as defaults. Shoppers know that they can easily override the default by asking the cashier for the alternative filling. 

• The defaults turn out to be almost perfectly sticky (unlike those well-designed M&Ms). But, more mugs are sold when M&Ms are the default. People don't override the healthy default, even though they know they could, but the healthy default seems to put them off the mug purchase altogether.

• If the store elected to employ a healthy default to promote customer health, is it doing the right thing? 

• Study 2 is also a real-life one, involving signing up for meal kit deliveries. What (three) meals will serve as the default for the kit? The experiment compares a default kit of three healthy meals (from one company) with an alternative default of three unhealthy meals (from a different company); once again, it is easy for meal kit purchasers to override the defaults.

• Again, the defaults are sticky, and in particular, the healthy default works in terms of nudging the choice of healthy meals. But, when choosing which company to patronize, there is a significant “dodge” effect: people became more likely to choose the company with the unhealthy default meals. So maybe it is not such a good idea for meal kit companies to set up healthy meals as the default?

• Study 3 is an internet-mediated "lab" experiment about which (hypothetical) restaurants people are likely to patronize. A subject is asked to order food from two competing burger restaurants. One burger restaurant uses turkey burgers as the default (this is the relatively healthy version, though not for the turkey), and the other burger place has been hamburgers as the default. (A similar comparison is run between two pizza places, and two sandwich shops). 

• Once again, (hypothetical) patrons tend to stick with the default, whether it is heathy or unhealthy. But they also are asked which of the restaurants they would return to, and in the case of burger joints, for the most part they would return to the unhealthy default version. People stay away from burger joints with a healthy default – turkey instead of beef burger – even though when at the "healthy" place, they generally go with the default. (It turns out that people are not so reluctant to return to pizza or sandwich shops that offer healthy defaults.)

• Study 4 looks at what happens if potential customers see an ad that lets them know in advance that turkey is the default burger meat. People become more enamored of the alternative restaurant that offers a beef default, and also suspect that ordering will be more of a hassle with the healthy default.

• Study 5 looks at healthy versus unhealthy defaults in a familiar setting, a McDonalds. There is a line, and a subject observes that the five people ahead of him or her in the line each stick with the default burger, where it is healthy or unhealthy. Does this social confirmation influence subsequent orders? 

• Once again, people tend to stick with default – but less so when the default is a turkey burger, when a third of folks request an override. Nonetheless, people indicate that they would dodge the healthy default restaurant in the future – but the dodgers were primarily folks who did not bother to override the healthy default!

• So, defaults can be quite sticky. Set up a health default, and you can expect that it will increase the percentage of customers who choose the healthy option. But there is a partial offset: some customers will dodge the restaurant with the healthy default, reducing the effectiveness of the healthy nudge by some 25%.

de Ridder, Feitsma, van den Hoven, et al. (2020) on Simple, Not Easy, Nudges

Denise de Ridder, Joram Feitsma, Mariëtte van den Hoven, et al., “Simple Nudges That Are Not So Easy.” Behavioural Public Policy, 1-19, 2020.

• This article draws upon a Dutch research program (2014-2018) with the acronym WINK: “Welfare Improvement through Nudging Knowledge [p. 3].” WINK "examines nudging from the perspective of three core disciplines: ethics, public administration and psychology [p. 3]."

• The authors posit that there are three common yet false assumptions made concerning nudges: (1) nudges threaten autonomy; (2) nudges are easy to implement; and (3) nudges are simple and effective.

• Autonomy might mean unfettered choice, but it also could refer to agency (capacity to choose) and self-constitution (identity and living the life one desires). Perhaps people who criticize nudges for threatening autonomy (even though by definition nudges do not preclude any choice options) do so because they have adopted a definition of autonomy in which maintenance of freedom of choice does not end the debate.

• Is it enervating to possess too many choices? Should we welcome nudges to reduce the burden of choice?

• The explanation of nudges can alter judgments about the extent to which they threaten autonomy.

• In general, the authors are fairly hostile to claims that nudges threaten autonomy, and tend to believe that nudges are more likely to enhance autonomy, by overcoming common gaps between  intentions and actions.

• The rush to set up nudge units is one piece of evidence that shows that many policymakers view nudges as both effective and cheap to implement. "In reality, however, the process of designing, testing and implementing nudge interventions is far more complicated, which questions the supposed ‘efficiency’ of nudges [p. 8]."

• Persuasion via information provision is hard… so it is not surprising that many policymakers view nudging as a promising, quick-acting alternative (p. 10). But in general, the effects of nudges tend to be fairly modest. This limited effectiveness might be considered an advantage, as it defuses the argument that nudges are overly manipulative. 

• When folks are unsure of their preferences, nudging works pretty well, and promotes autonomy in both the self-constitution sense and in the agency sense.

de Ridder, Kroese, and van Gestel (2022) on Nudgeability

Denise de Ridder, Floor Kroese, and Laurens van Gestel, “Nudgeability: Mapping Conditions of Susceptibility to Nudge Influence.” Perspectives on Psychological Science 17(2): 346–359, 2022.

• What conditions might influence the extent to which people are susceptible to a nudge? The authors look (primarily) at three issues: (1) awareness of the nudge and/or its purpose; (2) pre-existing preferences; and, (3) are the subjects employing System 1 or System 2 thinking?

• In this article, transparency involves making subjects aware of the presence and purpose of a nudge; this is a stricter condition than Thaler and Sunstein’s publicity principle, that asks if nudges, were they publicly known, would garner public support.

• Default nudges tend to maintain their effectiveness under transparent conditions; further, when nudged opaquely, people informed after the fact don’t seem to view those nudges as an affront to their autonomy. (Though when an ex ante inquiry is made, people often indicate that they will feel their autonomy threatened by an opaque nudge; that is, they forecast a higher level of concern than they will actually experience.) 

• Nudges will be “ineffective” at altering choices if the nudge counsels behavior to which they hold a negative view, or if the nudge counsels behavior to which they already are strongly attached! That is, we needn't be too concerned with nudging people into behaviors that their pre-existing preferences do not endorse.

• If people lack clear preferences, a nudge might “impose” preferences – though starting with a request that people discuss their preferences (a plus!) might undermine any perceived manipulation.

• There is not much evidence suggesting that people are nudged more when they are employing System 1 thinking (through ego depletion, say). That is, the effectiveness of a nudge is not tied to the extent that it prompts unthinking responses.

• People with lower cognitive capacity do not appear to be more susceptible to nudges.

• The final sentence of the text succinctly summarizes the article: "Nudges do allow people to act in line with their overall preferences, nudges allow for making autonomous decisions insofar as nudge effects do not depend on being in a System 1 mode of thinking, and making the nudge transparent does not compromise nudge effects [p. 355]."

Krekel et al. (2021) Have a Course that Raises Wellbeing

Christian Krekel, Jan-Emmanuel De Neve, Daisy Fancourt, and Richard Layard, “A Local Community Course that Raises Wellbeing and Pro-Sociality: Evidence from a Randomised Controlled Trial.” Journal of Economic Behavior and Organization 188: 322–336, 2021.

• Many correlates of wellbeing have been identified, but can we teach people, in an economical manner, how to be happier? Adaptation might preclude any sort of long lasting benefit, even if we could figure out ow to teach people to be happier.

• On the other hand, not all domains of wellbeing are subject to rapid adaptation. Social connections and pro-social behaviors are among those elements of wellbeing that are adaptation-resistant.

• Introducing... “Exploring What Matters”: An eight-week course aimed at the adult population in general; the course is coordinated by lay people (great expertise not required) and “manualised," that is, it is easy to become an effective coordinator.  

• Hundreds of Exploring What Matters courses have been conducted (by August 2020), with a total of more than 5000 participants. The courses have been in 25 countries, though most of them have been in the UK. "'Exploring What Matters' is run by Action for Happiness, a registered charity in England, which was launched in 2011. Its patron is the Dalai Lama, who helped to launch the course in London in 2015 [p. 323]."

• The course material includes mindfulness, gratitude, building good habits, social connections…

• Krekel et al. undertake a randomised control trial (RCT) for six Exploring What Matters courses conducted in London, 2016-2017, n=146. The people who were randomly chosen to be controls were not abandoned, but rather, were placed in a later course. The initial data were collected before people knew whether they were in the treatment group or the control group.

• When participants sign up for the free course, they are asked (but not required) to make a donation to cover the course costs of about 90 pounds. The course meets once a week for eight weeks, with each individual session lasting 2 to 2.5 hours.

• "The course aims at building (i) autonomy .. using a weekly mindfulness exercise, gratitude exercise, and personal reflection, supported by... scientific evidence on that week’s theme; (ii) relatedness by facilitating interpersonal connections and social trust...; and (iii) competence by enabling participants to experience for themselves how behavioural changes to daily routines can make differences to their and other people’s wellbeing, using goal-setting and social commitment tools to help translate motivation into action."

• The researchers look at 15 outcome measures (four on subjective wellbeing (SWB), two on mental health, three on pro-sociality, and six biomarkers collected via saliva samples, such as cortisol levels).

• The course brought about a large increase in SWB on average, like a point higher on a ten-point scale. Mental health improved, but not to the same extent that cognitive behavioral therapy brings. Compassion and social trust rose, too. [These findings have been replicated in a broader sample.] There were no significant change in biomarkers.

• These improvements are highly cost-effective, and scalable!

• Since this course evaluation was undertaken, the course has been revamped (now 6 weeks, recommended donation reduced to 60 pounds) and renamed: Happiness Habits.

• Action for Happiness is great, you should check out their website. Here's their monthly action calendar. 

Banerjee and John (2021) on Nudge Plus

Sanchayan Banerjee and Peter John, “Nudge Plus: Incorporating Reflection into Behavioral Public Policy.” Behavioural Public Policy, 1-16, 2021, available at https://doi.org/10.1017/bpp.2021.6.

• Should we embed a prod for people “to reflect” into System 1 nudges? Such a prod is the “plus.” [The authors themselves seem to equate nudges (or perhaps "classic nudges" with System 1 nudges; the "plus" activates a System 2 element in conjunction with a System 1 nudge.]

• Bundling a nudge with a plus makes nudges more salient.

• People need actual reflection, not just “the potential for reflection [p. 2].”

• Thaler and Sunstein consider that a legitimate nudge must be one that would receive wide assent if everyone were informed about its aim and operation. This restriction would rule out manipulating people in ways that harm them. Nonetheless, such a legitimate nudge might, when it is affecting choice, remain hidden, invoking an automatic, System 1 response.

• Nudge plus wants to extend the transparency, so that just about everyone understands what is going on in the choice moment. Actors maintain their autonomy, though without being required to pay extremely close attention or to engage in strenuous cognitive processing. 

• Commitment devices are a nudge plus, because the need to consider whether to sign up for the device spurs the requisite reflection; likewise with cooling-off periods.

• People often choose not to use GPS on familiar routes – they are thinking, they are not being “tricked into using the device heuristically once again [p. 7].” For them, GPS is a nudge plus.

• Adding a regular prompt to set a future fitness goal turns an otherwise ordinary fitness tracker into a nudge plus.

• But… do people really desire this “experiential learning environment [p. 10],” this near necessity to reflect regularly, at least to some extent?