Tiny nudges that can drastically improve your life

Summary

Nudge Podcast Episode Summary: "Tiny nudges that can drastically improve your life"

Release Date: February 10, 2025 | Host: Phil Agnew

In this enlightening episode of Nudge, host Phil Agnew delves into the profound impact that small behavioral nudges can have on our daily lives. Joined by esteemed behavioral economist Eva van den Broek and advertising veteran Tim, the discussion explores various psychological strategies that subtly influence our decisions and behaviors without our conscious awareness.

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1. Introduction to Behavioral Nudges

The episode opens with Phil Agnew presenting a compelling thought experiment about encouraging children to finish their meals without resorting to drastic measures. He introduces the concept of the Delbouf Illusion, where using a larger plate makes the same amount of food appear more substantial, thereby increasing consumption. Phil cites a 2016 study from the Journal of Association for Consumer Research highlighting that doubling plate size can lead to a 41% increase in food intake (00:00).

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2. Guests and Their Insights

Phil welcomes his guests, Eva van den Broek, a behavioral economist specializing in policy-related questions, and Tim, the founder of Brain Creatives, a company that integrates behavioral science with the creative process.

"Housefly Effect" and the Schiphol Airport Story

Eva and Tim discuss their book, Housefly Effect, which examines how minor psychological cues can significantly alter behavior. Tim shares the intriguing story of Schiphol Airport’s urinals, where painting small flies led to a 50% reduction in splashback and cleaning costs (03:15). This anecdote illustrates how a seemingly insignificant change can produce remarkable behavioral shifts.

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3. The Power of Defaults

Defaults are predefined options that, by their mere presence, influence decision-making without restricting alternatives.

• Student Loans Example: Eva recounts an experiment from her early career where the default option for student loans was set to the maximum amount available. This resulted in 68% of students opting for the maximum loan. When the default was removed, the uptake halved to 34% (05:13). This demonstrates how defaults can significantly influence financial decisions.

• Organ Donation and Policy Impacts: Phil references various policies influenced by defaults, such as Austria’s opt-out organ donation scheme, which boasts a 99.98% registration rate compared to Germany’s 12% under an opt-in system (06:28).

• Corporate Applications: Tim mentions Burger King’s initiative in Austria, where making the vegan burger the default option subtly encouraged healthier eating choices without overt enforcement (07:44).

• Personal Applications: Phil shares his own use of defaults, such as keeping healthy snacks at eye level and automating savings transfers to promote better habits (08:05).

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4. Leveraging Loss Aversion

Loss aversion refers to the tendency to prefer avoiding losses over acquiring equivalent gains.

• Charity Donation Strategies: Tim illustrates how charities manipulate donation amounts based on order effects, showing that the sequence in which donation options are presented can influence both the number and size of donations (12:20).

• Teacher Performance Bonuses: Eva explains a study where teachers who received an upfront bonus with the potential to lose a portion if student performance declined demonstrated a 10-15% improvement in student grades (09:55). This showcases how loss aversion can motivate individuals to maintain high performance.

• Practical Tips: Phil advises using loss aversion in everyday life, such as prepaying for classes to commit to attendance or setting financial penalties for missed goals (11:58).

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5. Order Effects and Decision Making

Order effects pertain to how the sequence of information presentation influences decision-making.

• Charity Donation Orders: Tim discusses how the order in which donation amounts are presented affects donor behavior—starting with higher amounts tends to yield fewer but larger donations, whereas starting with lower amounts encourages more frequent donations (13:00).

• Supermarket Layouts: Phil and Tim explore how supermarkets place healthy items at the entrance, leading customers to make seemingly healthier choices initially but potentially indulging in less healthy options later on. Eva cites that when McDonald's introduced healthy products first, their fast food sales paradoxically increased due to similar order effect dynamics (14:49).

• IKEA’s Customer Experience: The episode delves into how IKEA employs the peak-end rule by offering ice cream at the end of the shopping journey, ensuring customers leave with a positive final impression despite earlier challenges in the store (16:41). Phil explains the Kahneman Colonoscopy Study to illustrate the power of the peak-end rule, where the final moments of an experience disproportionately influence overall satisfaction (18:40).

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6. Enhancing Productivity Through Financial Disincentives

Eva introduces a fascinating study involving Indian data entry workers who opted into a system where failing to meet a daily target resulted in reduced earnings. Despite the inherent risk, about one-third of participants chose this self-imposed financial penalty. Remarkably, these workers ended up earning 2% more overall by consistently meeting their targets (20:23). This experiment underscores how setting personal stakes can combat procrastination and enhance productivity.

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7. The Dunning-Kruger Effect and Overconfidence

The conversation shifts to the Dunning-Kruger effect, a cognitive bias where individuals overestimate their own abilities.

• Behavioral Studies: Eva discusses studies where participants, irrespective of actual performance, overestimated their intelligence, especially when required to present themselves to potential employers. Even those receiving false positive feedback exhibited heightened overconfidence, affecting their self-perception and behavior (23:51).

• Practical Implications: Phil emphasizes the importance of recognizing our own susceptibility to overconfidence. By acknowledging these biases, we can better implement nudges to foster personal growth and decision-making (24:05).

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8. Conclusion and Takeaways

Phil wraps up the episode by reflecting on the practical applications of the discussed nudges:

• Defaults: Arrange your environment to favor healthy or productive choices effortlessly.
• Loss Aversion: Implement personal incentives or penalties to maintain motivation.
• Order Effects: Be mindful of how information sequencing can influence your decisions.

Phil encourages listeners to embrace these subtle strategies to enhance various aspects of their lives, from financial management to personal health and productivity. He also highlights the importance of humility in understanding our cognitive biases and the value of designing environments that guide us toward better outcomes.

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Notable Quotes

• Phil Agnew (00:00): "There is another way. A tiny, small nudge that can dramatically change behaviour."
• Tim (03:15): "People aren't motivated... yet [painting the fly] works."
• Eva van den Broek (05:13): "Almost 70% of people who visited that page asked for a maximum loan."
• Phil Agnew (08:05): "If I know I want to wake up early for a park run, I'll lay out my running clothes the night before. That's default."
• Tim (11:23): "We are too overconfident. And this naivety is due to the Dunning Kruger effect."
• Eva van den Broek (20:23): "To motivate yourself to complete a project, set a goal. If you miss your goal, impose a minor penalty."

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Final Thoughts

This episode of Nudge masterfully illustrates how minor adjustments in our environment and decision-making frameworks can lead to significant positive changes. By understanding and applying the principles of defaults, loss aversion, and order effects, listeners can harness these behavioral insights to improve personal habits, professional performance, and overall well-being.

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For more insights and episodes like this, visit nudgepodcast.com and subscribe to the newsletter for updates.

Transcript

[Phil Agnew]

Let's start today's podcast with a thought experiment. You are a parent. Every night you cook fresh, healthy meals for your children. These meals are delicious, they're nutritious. But your children always leave food on their plates. How can you convince your kids to finish their plate? Well, you could cook smaller portions, but then they wouldn't eat enough. You could swap out the healthy ingredients for more enticing junk food, but that'll make them unhealthy. You could try paying them them, bribing them, shouting at them. I'd imagine most parents have tried a combination of all of these things. But there is another way. A tiny, small nudge that can dramatically change behaviour. It's known as the Delbouf Illusion. Instead of giving the child a little children's plate, give them the biggest plate you have in the house. The same portion of food then looks a good deal more. More manageable. According to a 2016 study in the Journal of Association for Consumer Research, if you double the size of the plate, 41% more gets eaten. Today, we are covering how these small nudges can change behaviour and improve your life. All of that coming up. Do you remember when marketing was actually fun? When you had the time to get creative and genuinely connect with your customers, to make content that really resonated and to create campaigns, campaigns that really performed well. Well, let me be honest. I'm not sure I ever found marketing actually fun. But I certainly enjoyed it much, much more when I wasn't bogged down in data sets, in platforms and bureaucracy and red tape. And that is where HubSpot can help. You can turn one piece of content into everything you need. You can know exactly when your prospects are ready to buy and you can see all of your campaign results in one place. They take away the need for platforms, data sets, bureaucracy, and they make things easy to use. It is simple to use with the average HubSpot customer doubling their leads in just 12 months. So if you sign up to HubSpot, you'll get more leads, less hassle and more time to actually enjoy marketing again. Get started for [e-mail] hello and welcome to Nudge. Today I am chatting to a behavioral economist and veteran ad man. It's Eva and Tim.

[Eva van den Broek]

My name is Eva van den Broek and I'm a behavioral economist by training and I try to put it to work mostly for policy questions. So I usually work for ministries or municipalities.

[Tim]

And I'm Tim. I have a background in the traditional world of advertising, but about seven years ago I started My own company called Brain Creatives, which specializes in combining behavioral and neuroscience and the creative process.

[Phil Agnew]

Ava and Tim have just published the English version of their book, the Housefly Effect. The Housefly Effect explores how subtle psychological cues, or nudges, influence our daily behaviours, often without our conscious awareness. There's an interesting story behind the book's name, and it comes from the toilets at Amsterdam's Schiphol Airport. Here's Tim to explain.

[Tim]

Schiphol had a problem that at the urinals, men aim badly and the floors get wet. It's called. I think it's called splashback. And then they have to clean the floors, which costs a lot of money, but they also have to close down the toilets, which is very inconvenient. And they solved that problem in, I think, a very unconventional way. They painted little flies in the urinals. Guys just aim at those without really knowing why they do it, and the problem was solved. It's one of the more mysterious ones because we still can't really say why it works. All the conventional ways of changing behavior aren't there. People aren't motivated, There is no. No reward for it, There is no punishment. And still. Yet it works.

[Phil Agnew]

It's a very small nudge that shifts behavior. The fly gives men something to aim at and it works, reducing cleanup by 50%. And because of this, the cleaning costs also drop substantially. Now, I should add that this isn't a scientifically controlled study, it's an anecdote. And more evidence is definitely needed before you paint a tiny fly in your own toilet. But there is some fun history, at least behind the fly. In Stratford Upon Avon, urinals dating back to around 1880 also featured little bees painted on them. This is supposedly a small British pun, as the Latin word for bees is APIs, sounding much like what you would use a urinal for. The housefly symbolises a nudge, a small change in the environment that makes the desired behaviour easier. Today, we will cover how these nudges alter our behavior, starting with one of the most impactful defaults.

[Eva van den Broek]

Of course, we all know that the brain is very lazy, right? And there's good reasons for that. It consumes energy to think and we try to avoid that. Takes effort to change a default option to something else, and people don't really realize that. And that is something that I find super interesting, that people that we all think that this might work for other people, but not for us.

[Phil Agnew]

And Ava herself has seen her life change fairly dramatically after interacting with one innocuous default. As A young adult at the time.

[Eva van den Broek]

When I was asking for student loans. So that's really 30 years ago I think there was this online web form where you could choose whether you wanted a maximum loan from the Dutch government. They were sort of encouraging people to take up loans. So you could either choose the maximum loan available or you could compute yourself how much you would be needing. So other please, special please specify something like that. And of course these two options are, well it's a binary choice. You take either of them and the webmaster back then, early days of Internet I guess had pre selected the first. So the maximum loan please. Almost 70% of people who visited that page asked for a maximum loan. That was quite something. The cool thing is that at some point one of the webmasters has just been playing around with these defaults. So this is one of the beautiful studies where we've, by accident, it's like a natural experiment, by accident we found that he took out the tick, the tick box and suddenly it was a binary choice without the default. And now what you would say that would happen is yeah, maybe it becomes a bit lower, but really it's half the number of people that took out the maximum loan.

[Phil Agnew]

When the default option automatically selected the maximum loan amount, 68% of prospective students borrowed as much as they could. When the default was removed, the number of new students borrowing the maximum level halved to 34%. Donald Trump has used the same principle to swindle larger donations out of his fans. His team concealed a pre checked box causing donors to unknowingly double their supposed one off donations and turning them into weekly contributions. There are major policy changes based on this approach. In the uk, pharmaceutical companies replaced large sized family containers of paracetamol with smaller packs and they introduced limits on the quantity a customer could purchase. This default switch led to a significant decrease in paracetamol suicide rates. Opt out organ donation schemes have increased the percentage of registered donors to 99.98% in Austria, while in contrast in Germany where the system is opt in registration stands at just 12%. Defaults are tiny implementations that can alter our debt, our post mortem organs or even our burger choice.

[Tim]

One example I really liked was Burger King. I think in Austria that changed the default where they say we have a normal burger and then we have a burger with meat in it. So they made the vegan burger the default, which is a different way of presenting it, which is a very simple thing. But I think it was successful and was also an interesting way to reframe it.

[Phil Agnew]

Defaults can nudge us towards better behaviour. I use defaults to try and make healthier choices. I keep a fruit bowl at eye level in my kitchen. The default choice is therefore a banana rather than the crisps in the cupboard. I automate my monthly transfers into a savings account and that default helps me save money. And if I know I want to wake up early for a park run, I'll lay out my running clothes the night before. That's default. Now let's cover another small nudge that can shift behavior. It is loss aversion.

[Tim]

Maybe I'll preface it with this, with a really dirty trick that some charities use. My daughter came home and she was really annoyed that she had run into this charity that gave her a cuddly toy in the street and then if she didn't donate she had to give it back and she thought this was incredibly unfair because obviously you get attached to the cuddly toy in the minute you're holding it.

[Phil Agnew]

I'd be annoyed as well. But even though the execution from the charity wasn't great, the idea makes sense. We are motivated to avoid losses. One impressive 2016 study called the Behaviouralist Goes to School showcases this nicely. The researchers wondered if loss aversion could boost teacher performance. So, funded by donors, they tested loss aversion by randomly dividing teachers into two groups. In the first group, teachers earned up to $8,000 at year end based on their students performance. In the other group, teachers received $4,000 upfront before the year starts, with the potential to double their earnings if the students excelled, or repay that four grand if the student's progress lacked. These bonuses were based on relative class performance, ensuring fairness across the groups. Here is Eva to explain this experiment.

[Eva van den Broek]

There's been a couple of studies that have been run in the States where they randomly donated money either at the end of the year according to how relatively well the students were doing, and then they gave the money to the teachers as a bonus, or in another treatment, they gave a bit upfront. As you were saying, I think they paid like $4,000 upfront. And then at the end of the year, depending on whether their students, their pupils were doing better or worse than the average, they got 4,000 extra or the 4,000 was taken from them again. And you would say that this would be completely the same as handing out $8,000 to the teachers that were doing the best at the very end. No, it wasn't. The teachers really reacted more, or at least were doing more. They were giving more effort to these upfront payments. That might be taking away. I don't remember what the exact number was. I think they did like 10 or 15% better, that is their students when they were contemplating losing those $4,000 again. And that's quite something on student grades, right?

[Phil Agnew]

The teachers paid in advance, saw their students perform considerably better. The students had 10% better grades in maths and comprehension. While old fashioned bonuses given at the end of the year had no effect. The prepaid teachers had students who also scored 13% higher on statewide tests, which were independent of the study, showing that this had a real impact.

[Tim]

Yes, and I think this is the principle of loss aversion. Teachers were also loss averse. They will work harder to keep a bonus that they have been given up front than they will work to get a bonus they don't yet have. I think the most Dutch example we have of this is somebody who just got a new bike will be sort of glad they have that bike. But once that bike gets stolen, they'll be five times as angry as they were glad to acquire the bike. So I think we can all recognize that loss losses loom larger than gains. And this is something that we can use if we want to elicit certain behavior.

[Phil Agnew]

If you want to attend your local art class, prepay for it. That sunk cost will motivate you to go. There is another subtle way you can be nudged and it's a nudge you'll have seen when you have donated to charity. Its order effects. Put simply, the order in which you see something will influence how you behave. Here's Tim with an example.

[Tim]

I've worked for quite a few charities and also asking for donations. And what we find, and there's a lot of literature about this as well, is when you test it, there are two orders in which you can suggest donations. You can say, for instance, well, it can be as little as €10, but it can also be 20, 30, 50, etc. Or you can turn it around and say, well, we would be very happy if you gave us 50, but you can also give 40, 30, 20, or even 10. This order will have an effect on what happens. If you start with the lowest amount, you will get many more donations. And if you start with the highest amount, you'll get fewer donations, but they will be higher.

[Phil Agnew]

So how would a charity increase the donation of a donor?

[Tim]

I asked him and then they built these little letters behind the scenes where they say, well, if the last time you gave 10, then the next email we send you the lowest amount on there will be 15. So they can sort of move you towards a higher donation. You wouldn't think that the order matters so much. You would think that people understand that you can choose in a range from 10 to 50, or in a range from 50 to 10 means the same thing to them, but it doesn't. It has a great effect on what people do and actually has a great effect on how much good work a charity can do.

[Phil Agnew]

The order effect even impacts when you should visit the hospital. Katie Milkman and colleagues found that the likelihood you'll receive better treatment is substantially higher if you go there earlier in the day rather than later in the day. At the end of the working day, healthcare professionals wash their hands less frequently and doctors more often prescribe antibiotics without good reason. This same nudge might also cause you to buy more junk food at the supermarket.

[Tim]

Well, I've spoken to some Dutch supermarkets and none of them have admitted that they did this on purpose, but they do admit that they see the effect of it. You usually enter through the greens. So the first things that you put in your basket are very healthy things that take up a lot of space, like lettuce or a pineapple, something like that. The theory is that after, after that, your brain starts sort of computing the average healthiness of your basket. You're off to a great start because if you have a huge amount of greens in there, it's not so bad to put some beer in there or some crisps or maybe some sausages or whatever. So actually entering through the healthy stuff, starting with the healthy stuff, may make you less healthy, may mean you make less healthy choices.

[Phil Agnew]

There's real world evidence for this. Ava and Tim write that in the early 2000s, when McDonald's began to promote healthy products such as salads and spring water, the sales of their fast food, junk food, actually increased. It's a classic order effect example, and policymakers are aware of this too. The UK recently banned unhealthy products in impulse buy spots. Only healthy products are now permitted to be sold near the tills and exit. Going into the grocery store with a strict list could be another way to avoid these impulse buys. Although I can't claim to have the self restraint to do this myself. Defaults, loss aversion and order effects. These are three small nudges that are influencing your decisions and could be harnessed to improve your life in small but significant ways. After the break, we'll cover three more nudges. The podcast I'd like to recommend today is Billion Dollar Moves, hosted by Sarah Chen Spellings, and it is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. I love this podcast. I had a real great time chatting with Sarah at Inbound 2024 and learning about her wonderful podcast. If you listen, you'll hear Sarah ask the hard questions to business leaders. All of this will help you make your own billion dollar moves in venture, business and life. Listen to billion dollar moves wherever you get your podcasts. Hello and welcome back. You are listening to Nudge with me, Phil Agnew. Could you imagine buying some furniture at an ice cream truck? Well, probably not be an unusual thing to buy, wouldn't it? It would be nonsensical. So why do Ikea, a furniture company, sell ice cream? Well, it's down to another crafty nudge.

[Tim]

The other thing is at the end of Ikea's customer journey. Some time ago this used to be a very bad ending of a customer journey because we know something called the peak end rule. Part of which rule is that the very end of an experience will really influence recollection of it and will also really influence your inclination to repeat that experience. Ikea had a problem that right at the end of the customer journey there were some very unpleasant experiences because you have to pick your own stuff out of, out of the big cupboards or what do you want to call it? Then you have to pay and then you have to find your car and get out there.

[Eva van den Broek]

Your kids are getting so annoying and.

[Tim]

Your kids are very annoying and maybe you're probably because they're very good at upselling or cross selling. You probably bought some more stuff than you want and sort of were scared at the price or startled at the price. So what they could have done was re engineer that complete journey, not have you pick out your own furniture, do something about the price, lose a lot of money, hire more people. That would have been a huge transformation. Instead they offer you a very, very cheap ice cream or sausage hot dog at the end. So now you have fat and sugar and a discount, which is like the best you can offer a consumer, I suppose. And people leave happily because of that little order effect that they engineered a high point at the end. What fascinates me about this issue is this has been known for 20 or 30 years.

[Eva van den Broek]

Yeah, even longer. This is the old Kahneman colonoscopy study, I think. I'm not sure Ikea read about colonoscopy.

[Tim]

And retailers and many people know this example or they understand why the ice cream is there because it's really weird. You don't buy furniture at an ice cream store. So why should you buy ice cream at a furniture store? But okay, we accept it. And still very few retailers are actively trying to influence those last minutes of a visit, whereas there are so many opportunities there to have people return and have a better recollection of their visit.

[Phil Agnew]

Kahneman's colonoscopy study is worth re sharing. For the study, patients were divided into two groups. One underwent a standard colonoscopy while the other experienced an extended procedure with the colonoscopy scope left in place for an additional three minutes without movement. This causes discomfort but not pain pain. So one normal one and then one with the same amount of discomfort and pain plus three minutes extra discomfort at the end. Now the patients who underwent the longer procedure rated their experience as less unpleasant and were more willing to return for future procedures. Whereas the patients with the shorter procedure who experienced less discomfort overall rated the procedure as more unpleasant. This is the peak end rule in play. The final experience outweighs the overall experience. In a follow up study, Kahneman and Ziv Karman examined participants satisfaction while waiting to be served by a computer program. They discovered that participants who experienced dissatisfaction during most of the wait but had a satisfying final few seconds rated the overall experience more positively than those who waited for less time overall but without that satisfying end. IKEA do the same. They end their experience with a cheap ice cream and they change perceptions of Ikea. Suddenly Ikea's not overwhelming, expensive and tiring. It's cheap and fun and a place to get ice cream. Now let's say you wanted to improve your productivity using a nudge. Well, one 2015 paper suggests that you should set yourself a financial disincentive. Here's Eva to explain.

[Eva van den Broek]

So there's this beautiful paper on again one of these employer employee setups, but now a real live one. So field study people actually know that they are big procrastinators. That is the cool thing. So you would say that if you would offer piece by piece rewards for data typists. This in fact I think we're Indian data typists. And per field that they filled in, they got a certain amount and then their employer or actually it was I think like Nathan and Kramer and someone else, they asked these Indian field typers, they asked them would you like to have some kind of a threshold sort of a target where if you make it, you get definitely those $0.03 or whatever it was that you got before. If you don't make it, you get less.

[Phil Agnew]

The experiment lasted 11 months and involved 124 Indian data entry workers, some were invited invited to set a financial target of filling in at least 4,000 fields per day. If they agreed, they would receive 0.03 rupees per data field. But if they filled in less than 4,000 fields per day, they'd receive just 0.015 rupees. There's a lot of numbers here, but the employees typically receive 0.03 rupees per data entry. So that is a 50% drop in earnings if they didn't hit their self imposed target. Objectively, the self imposed target is a very bad choice. It could result in you losing a lot of money. But the Indian data entry workers consistently chose this irrational option.

[Eva van den Broek]

These data typists, they knew that from day to day they varied in how much they'd been working. Of course they kept track. And they also knew that when payday was approaching, they would do it better. So they knew that they were influenced by the ways that they were rewarded and when they got this chance to actually cut down their payments, right? Because the only question, the only two options that they had was be rewarded as you were $0.03 per fields, whatever you do, or make it up to 4,000 fields and then if you don't make it, you get half of the payment that you would earn otherwise. And there were still really a lot of people who would opt in to that threshold design. That's super weird if you think about. Because the only chance that they stood was to earn less for the same amount of work, right? Still like a third of the people did. And it turned out that the ones who did knew themselves well because they were at the end of the day, at the end of the month, they were earning more than their other more rational employees who didn't opt in for this weird threshold design.

[Phil Agnew]

The self imposed target sounds irrational, but it turned out that the Indian employees knew themselves very well. They worked much harder due to that target and they earned overall 2% more than their colleagues without a target. To motivate yourself to complete a project, set a goal. If you miss your goal, impose a minor penalty. This self imposed system encourages your future lazy self to stay on track, boosting your productivity and your overall performance. But there's a problem. Most of us think we are too smart for simple tricks like this. We don't think we would fall for them. But that's wrong. We are too overconfident. And this naivety is due to the Dunning Kruger effect. Here's the background, a piece of candy.

[Tim]

That we sometimes forget, which I think is very amusing. About the Dunning Kruger effect was the original instance that made Mr. Dunning and Mr. Kruger interested in studying this, which was a person who tried to rob a bank and tried to get away with it by rubbing lemon juice on his face. Now, he had read or heard that you can use lemon juice as invisible ink. You write with it and then you have to heat it before you can read it. But somehow in his mind, this has led to the idea that lemon juice makes things invisible. So this was an incredibly silly idea to risk so much on. And he didn't test it, obviously. So they thought, how can somebody be so overconfident in such a silly way? And I think, well, most of us don't do that, but most of us have instances where we really overestimate how good we will be at something.

[Phil Agnew]

I'm not saying that any of you smart listeners would rob a bank covered in lemon juice, but I do think you are overconfident. Here's why.

[Eva van den Broek]

There's super cleverly designed studies in this area. There's ones that was sort of set up around IQ tests and communicating about the results of these IQ tests to people that took on the role of employer. So it was a lab test and then people would do these kind of, I don't know, balls and squares and kind of IQ tests and they would get some feedback over how well they'd been doing relative to the rest of the group. And of course, half of the people did better than most and half of them didn't. Then what they varied was they told some of the people, the results that you're going to read are going to be used by your employer to choose you on the basis of, of your results. Do you think you'll be good at this? And they asked that before doing the. Or before getting the test results. Of course, people that knew that they were going to be judged on their own estimates, they would expect that they would do better, so they would be more overconfident than the others. Of course, every one of us is overconfident, but these people who had to socially signal that they were good at it were even more overconfident. And then they would give them feedback. So some of them got positive feedback, others not so positive, but on average they were equally good as a test. They were better at convincing this employer if they got positive feedback. And that didn't really impact. I mean, it didn't have a correlation with how good they were actually. So, yes, indeed, there's a reason why we're so overconfident. We're better at exploiting others.

[Phil Agnew]

This is research by economists Joel van der Veel and Peter Schradmann. They gave participants an intelligence test and asked the participants to estimate their score. The majority are, unsurprisingly, overconfident, with the majority rating themselves well above average. Some receive false, overly positive feedback, that is they did badly on the test, but they were told they did very well. These participants became even more overconfident and were better at convincing others of their intelligence. So people who were quite unintelligent became actually quite good at convincing others that they were intelligent simply because they did well when they did badly. Interestingly, participants who knew they needed to demonstrate their intelligence to others also overestimated themselves even more. We are incredibly overconfident. We believe we're smarter than we are and this multiplies if we have to demonstrate our intelligence to others or if we're told we've done well even though we have so let's end on a humbling note. I am not as smart as I think I am. I fall for these biases as much as anyone else and if I want to improve my life, I should accept these heuristics rather than ignoring them. I should set up defaults to encourage healthy eating, use loss aversion to hit the gym, avoid the sweets aisle at the end of my supermarket shop, and set myself a financial disincentive to finish my work. Work. These tiny nudges might not seem like much, but they could drastically improve my life. Ok, that is all for this week folks. Thank you so much for listening. I want to say a massive, massive thank you to Ava and Tim for coming on. They were a pleasure to chat to and their book, the Housefly Effect really is a cracking read. It is packed with new studies and examples that I hadn't encountered before. It's informative yet readable, and I think it's well worth a read. If you're looking for a book in 2025, I've left a link to it in the show notes if you want to pick up a copy. Now, I have something quite exciting to announce at the end of this episode. It's something I've not mentioned before on the show. I am launching a cohort training where I will teach 20 people how to apply behavioral science across their business. I will not only teach them how to apply this behavioral science, I will also help them apply the behavioural science to some of the business problems that the people enrolled in this course have. So you will learn about behavioural science, you'll use the east framework to apply it. You'll then think about with me how we can apply these principles to your business, to your work. And then in the final week we'll actually test that application as well. It's something I've been working on for a while. I'm going to call it, I believe, the Nudge Unit as a bit of a shout out to David Halpern and his team who set up the original Nudge unit. It'll be a three week long course in March and it will be a paid course as well. So it's really targeted at businesses who believe that they can get some value out of behavioural science and can sort of justify spending a bit of money in applying this stuff themselves. So very, very early days, but I will include a link in the show notes if this is something you are interested in. If you are, I would suggest signing up fairly soon. There are only going to be 20 spaces on this course and they might sell out quickly. Okay. I'll be sharing more about the Nudge Unit on my newsletter, so if you do want to learn more, go to nudgepodcast.com and click Newsletter in the menu to sign up to the newsletter. And thank you again for listening to this episode of Nudge. I'll be back soon with another episode. Cheers.