3. “The world doesn’t need
a thousand different
theories to explain a
thousand different facts.
At some point there
needs to be a discipline
of trying to explain
many facts with one
theory”
Levine, 2012
4. EXISTING
INTENTION
NO EXISTING
INTENTION
INACTIVE ACTIVE
n/a
Unused gym
memberships
Failed to send in
cashback offer
Intend to leave
bank. Don’t.
5. Standard economics:
• People know what is in their best interest.
• They are able to act on that knowledge.
• What we see is what they prefer.
6. ad·ver·tis·ing [ad-ver-tahy-zing]
• from ‘ad·vertere’ …."to turn toward”
• the act or practice of calling public attention to one's product, service, need, etc
7. A previously
misunderstood
population
Gross, Souleles 2002
Do liquidity constraints and interest rates matter?
Why intending
but not active?
9. Mistakes with patterns & transferrable lessons
Knowing more than Grandma
Why do so
many end up
here
specifically?
&
“our understanding of human behaviour can
be improved by appreciating how people
systematically go wrong.”
Thaler & Sunstein, 2009
10.
11. PwC
In a lake, there is a patch of lily pads.
Every day the patch doubles in size.
If it takes 48 days for the patch to
cover the entire lake, how long would
it take for the patch to cover half the
lake?
12. PwC
In a lake, there is a patch of lily
pads.
Every day the patch doubles in size.
If it takes 48 days for the patch to
cover the entire lake, how long would
it take for the patch to cover half the
lake?
And now ... ?
13. But not just party tricks! | Tracing back to "the psychological roots”
Less focus here
More focus here
? Less focus here
14. What kind of orange
car?
What are the features of
the terrain?
15. Timing Frames
Social Shortcuts
Seduced by
short term wins
Put off by small
barriers
Purchase ‘cheap’
white-goods
5% fat or 95% fat
free?
Superficial
changes in
language
Intentions &
outcomes of
others matter
Not happy if price
of umbrellas
increased on a
rainy day
Don’t eat at empty
restaurant
Information is
used selectively
HOW THE DRIVER SEES THE RACE
17. Timing Easier to do in future. Help to lock in a time.
Small inconveniences prevent important steps.
Frames Frame the costs of not acting.
Shortcuts Information will be used selectively.
Is it clear enough what is at stake? What to do?
Social Have employer’s intentions been communicated?
What about what others have done?
“Dollar bills on the sidewalk”
19. Orange cars difficult to spot in environments we are used to…
Do you need behavioural economists in your analytics team?
• Flood insurance purchases spike in the weeks following a flood then
settles back
• Houses with pools sell for more on hot days
• Child care late fines increase late arrivals
• Lipstick sales increase during recession
• Frequent flyers don’t take up ‘free’ points
20. What kinds of orange cars? | Targeted nudge
Debt collection:
Wealthy households with
high outstanding debts?
• Average outstanding amount
per person plotted against
household income for that
postcode
• Size of circle represents
postcodes with higher overall
outstanding amounts
21. What kinds of orange cars? | Evidence from the wild
Persona Headline description Symbol
Comfort
Unsure and confused by technology. Needs
seeker
kindness and patience
Racer Very busy and will generally come to interaction
well prepared, Needs to have time respected
Fact finder Needs information to be accurate and easy to
access and likes to be respected for what they
know
Technology
adventurer
First to have every new gadget, frustrated by
dealing with people who don’t know as much as
them
The
Outsourcer
Just wants it done. My problem needs to
become your problem quickly and reliably.
24. CAUTIONS & CONTROLS
PwC
Gneezy & List, 2013
“If you are like most people
you have an opinion about
the reasons… but do you
really know why?
...Anecdotes? Gut feelings?
Introspection?”
25. Not in a school =
Less likely!
Do you support -
increased funding
for schools? In a school =
More likely!
Don’t Just Ask | Observe and Analyse
28. From party tricks, to business results!
The world is full of orange car challenges
It is about the terrain (easy to overlook) as well as the car/driver
Data will inform the discussion in important ways
Testing for real causes - not creative story telling
Creative – but from a new common platform / language
29. Behavioural Insights
William Mailer
BI Australia Lead
+61 (2) 8266 1026
william.mailer@au.pwc.com
Jason Collins
BI SME
+61 (2) 8266 2662
jason.collins@au.pwc.com
Jon Williams
Lead Partner – People
+61 (2) 8266 2402
jon.williams@au.pwc.com
