Behavioural economics is the study of human behaviour and decision making. In a nutshell, it tells us that we as humans don’t always act rationally. We don’t have fixed preferences, we’ll make one choice one day, and a different choice the next. That’s us just being human! We’re highly influenced by environmental, social, psychological, and behavioural factors, much more than we realize. In this lightning talk, I’ll start with a classic behavioural economics example, where a seemingly insignificant design decision (or a "nudge") had a drastic effect on organ donor registration around the world.
Over 99% of citizens in countries like Austria and France are organ donors, whereas that number in Canada is less than 20%. The reason isn’t because there is something fundamentally different about our citizens, instead, it’s the process to become an organ donor. In countries like Austria and France, all their citizens are already organ donors unless they choose to opt out.
In most of Canada, on the other hand, organ donation is opt in. Organ donation is a complex decision, and when people are faced with a complex decision (or they’re busy, lazy, etc.), they often make the easiest choice, which is making no choice at all and sticking with the default. Governments around the world, including Wales and certain provinces in Canada, have been employing this nudge by switching to an opt-out system. But now, two years later, Wales has seen no change in the number of increased donors at all. Why didn’t the opt-out system work in Wales?
A nudge alone isn’t the solution. It’s just one part of a much bigger picture, and this is where behavioural economics and service design thinking can work well together. Organ donation often occurs after an accidental death, and countries like Wales and Canada have a clause that allows the final decision to donate after accidental death to go to the family. Families that see the would-be donor consented by default do not believe that this reflects their actual intention, and end up vetoing the choice to donate as a result, countering the positive effects of this nudge.
Behavioural economists often work at the level of individual decisions, but they can benefit greatly from the holistic view of service design thinking by looking across the entire journey and understanding the downstream effects. And service designers can benefit from behavioural economics by improving those great ideas, products, or services that don’t quite seem to work as expected in practice because they're not looking at the details.