Behavioural Science Behind: Why Supreme Court orders were defied on Diwali

Even three days after Diwali, the air quality remains in the ‘severe’ category in Delhi. The Supreme Court’s orders were defied, and firecrackers were used extensively, resulting in thick smog that engulfed Delhi and NCR region.

Supreme Court is a highly respected and legitimate authority in India, despite being its order of regulating timings (between 2000 to 2200 hours) of burning fire-crackers on Diwali, the fire-show went on way beyond. Crackers were burned by the people of Delhi even knowing the ongoing hazard of air pollution in the capital city.

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Image Courtesy: Deccan Chronicle

Why it had happened, how it could have been handled, what are the possibilities of the future? Behavioural sciences have some answers:

Nudging:

“A nudge is an aspect of the choice architecture that alters people’s Behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Putting fruit at eye level counts as a nudge. Banning junk food does not.” (Thaler & Sunstein 2008)

Without giving an option of green fire-crackers, it is almost impossible to stop people from bursting crackers. People are irrational, restricting their choices make them curious and offender of breaking the barrier. Just like kids often do what you stop them from doing. It is almost impossible to have a reasonable effect of such restricting orders, especially when dealing with the general public.

The Psychology of All or Nothing: We, as an individual, manage to undermine our contribution and tend to think of ‘all or nothing’. A change starts from an individual and spreads all over.

Bystander Effect: The bystander effect occurs when the presence of others discourages an individual from intervening in an emergency situation. 

If we wait everyone to act before we act, no one will ever act before its too late.

Availability Heuristics: Availability is a heuristic whereby people make judgments about the likelihood of an event based on how easily an example, instance, or case comes to mind.

Celebrities should talk about air pollution on social media, the government should extensively campaign its hazard and solutions, politicians should refrain from making it a religious issue. Let people aware of it, let it trending on minds, the way it worked in decreasing tobacco consumption.

 

Do you have anything in your mind related to the application of behavioural economics in this situation? Feel free to write me at: sourav.raina@alumni.ie.edu

 

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The science of first impression: How TWO words can change everything about you

Our propensity to label people, ideas or things based on our initial opinions of them is so high, that even two simple words have the power to influence it.

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Here’s the experiment. A class of MIT students were told that their economics professor was out of town and therefore a substitute instructor would be filling in. The students received a brief bio describing him. Half the students received this version:

Mr._____ is from the Department of Economics and Social Science here at MIT. He has had three semesters of teaching experience in psychology at another college. This is his first-semester teaching Economics 70. He is 26 years old, a veteran, and married. People who know him consider him to be a very warm person, industrious, critical, practical, and determined.

The second half received the same bio. Only two words had been changed:

Mr._____ is from the Department of Economics and Social Science here at MIT. He has had three semesters of teaching experience in psychology at another college. This is his first-semester teaching Economics 70. He is 26 years old, a veteran, and married. People who know him consider him to be a rather cold person, industrious, critical, practical, and determined.

At the end of the class, each student filled out an identical questionnaire about the substitute instructor. Most students from the first group that received the bio describing him as ‘very warm’, loved him. They described him as good-natured, considerate, informal, sociable, popular, humorous and humane. Though the students in the second group sat in the same class, same session, most of these students saw him as self-centered, formal, unsociable, unpopular, irritable, humourless and ruthless!

Just two words have the power to alter our perception of another person and possibly sour the relationship before it even begins. Once we get a label in mind, we don’t notice things that don’t fit within the category. Labeling is important for us to go through the regular day bombarded with information so that we can organize and simplify. But it also prevents us from seeing things as they are.

Source:

Harold Kelley (University of Michigan) – The warm-cold variable in first impression of persons, Journal of Personality 18, no 4 (1950): 431-439.

Summarised by: Behavioural Design

 

Psychology of Pricing: The Decoy Effect

Have you ever thought of pricing beyond cost + margin?

Did you ever notice the way you make decisions by available choices?

Did you ever feel curious when a book judged by its compelling cover became a boring read?

Have you ever thought why a shirt is priced at 2999 instead of 3000?

Most of the times we make irrational iterations to justify the rationality of our decisions. Psychology plays a mindboggling part in pricing and many times we fall into the trap of it and end up buying more, expensive or even useless.

Psychological pricing has many forms, and you may come across many such types of things around your local retailers or grocery shops. Just like I bought apples on a relatively high price because of a sticker depicting “High Quality,” only to find them rotten inside. Damn smart street vendors!

The decoy effect is definitely not the only cognitive bias that is apparent in humans.

To understand The Decoy Effect, let’s start with an example:

The Economist is widely known for using The Decoy Effect. Out of the below-mentioned choices, try to choose one out of three offers:

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Many of us will argue that the offer I (left) is the best option. It is cheap to have both the subscription for US$15, which are worth of US$24 (US$12 each). You will suddenly feel that you are making a rational choice with a right amount of deal. Other options seem irrelevant, and you are ended up spending more even if you do not need one or other kind of subscription.

Dan Ariely found in The Economist magazine and wrote about in his book Predictably Irrational but it touches on the concept of decoy pricing or the “asymmetric dominance effect” effect.

Confused?

Let’s take another example: The bottle with $30 tag suddenly becomes reasonable after the introduction of $50 tag bottle.

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