A Nobel Prize-Winning Behavioral Economist on the Small Factors That Shape Our Decisions

And why we’re all ‘choice architects’ at one point or another.

Image courtesy of Unsplash.

The Cafeteria

A friend of yours, Carolyn, is the director of food services for a large city school system. She is in charge of hundreds of schools, and hundreds of thousands of kids eat in her cafeterias every day. Carolyn has formal training in nutrition (a master’s degree from the state university), and she is a creative type who likes to think about things in nontraditional ways.

One evening, over a good bottle of wine, she and her friend Adam, a statistically oriented management consultant who has worked with supermarket chains, hatched an interesting idea. Without changing any menus, they would run some experiments in her schools to determine whether the way the food is displayed and arranged might influence the choices kids make.

Carolyn gave the directors of dozens of school cafeterias specific instructions on how to display the food choices. In some schools the desserts were placed first, in others last, in still others in a separate line. The location of various food items was varied from one school to another. In some schools the French fries, but in others the carrot sticks, were at eye level.

From his experience in designing supermarket floor plans, Adam suspected that the results would be dramatic. He was right. Simply by rearranging the cafeteria, Carolyn was able to increase or decrease the consumption of many food items by as much as 25 percent. Carolyn learned a big lesson: school children, like adults, can be greatly influenced by small changes in the context. The influence can be exercised for better or for worse. For example, Carolyn knows that she can increase consumption of healthy foods and decrease consumption of unhealthy ones.

With hundreds of schools to work with, and a team of graduate student volunteers recruited to collect and analyze the data, Carolyn believes that she now has considerable power to influence what kids eat. Carolyn is pondering what to do with her newfound power. Here are some suggestions she has received from her usually sincere but occasionally mischievous friends and coworkers:

1. Arrange the food to make the students best off, all things considered.

2. Choose the food order at random.

3. Try to arrange the food to get the kids to pick the same foods they would choose on their own.

4. Maximize the sales of the items from the suppliers that are willing to offer the largest bribes.

5. Maximize profits, period.

Option 1 has obvious appeal, yet it does seem a bit intrusive, even paternalistic. But the alternatives are worse! Option 2, arranging the food at random, could be considered fair-minded and principled, and it is in one sense neutral. But if the orders are randomized across schools, then the children at some schools will have less healthy diets than those at other schools. Is this desirable? Should Carolyn choose that kind of neutrality, if she can easily make most students better off, in part by improving their health?

Option 3 might seem to be an honorable attempt to avoid intrusion: try to mimic what the children would choose for themselves. Maybe that is really the neutral choice, and maybe Carolyn should neutrally follow people’s wishes (at least where she is dealing with older students). But a little thought reveals that this is a difficult option to implement. Adam’s experiment proves that what kids choose depends on the order in which the items are displayed. What, then, are the true preferences of the children? What does it mean to say that Carolyn should try to figure out what the students would choose “on their own”? In a cafeteria, it is impossible to avoid some way of organizing food.

Option 4 might appeal to a corrupt person in Carolyn’s job, and manipulating the order of the food items would put yet another weapon in the arsenal of available methods to exploit power. But Carolyn is honorable and honest, so she does not give this option any thought. Like Options 2 and 3, Option 5 has some appeal, especially if Carolyn thinks that the best cafeteria is the one that makes the most money. But should Carolyn really try to maximize profits if the result is to make children less healthy, especially since she works for the school district?

Carolyn is what we will be calling a choice architect. A choice architect has the responsibility for organizing the context in which people make decisions. Although Carolyn is a figment of our imagination, many real people turn out to be choice architects, most without realizing it. If you design the ballot voters use to choose candidates, you are a choice architect. If you are a doctor and must describe the alternative treatments available to a patient, you are a choice architect. If you design the form that new employees fill out to enroll in the company health care plan, you are a choice architect. If you are a parent, describing possible educational options to your son or daughter, you are a choice architect. If you are a salesperson, you are a choice architect (but you already knew that).

There are many parallels between choice architecture and more traditional forms of architecture. A crucial parallel is that there is no such thing as a “neutral” design. Consider the job of designing a new academic building. The architect is given some requirements. There must be room for 120 offices, 8 classrooms, 12 student meeting rooms, and so forth. The building must sit on a specified site. Hundreds of other constraints will be imposed—some legal, some aesthetic, some practical. In the end, the architect must come up with an actual building with doors, stairs, windows, and hallways. As good architects know, seemingly arbitrary decisions, such as where to locate the bathrooms, will have subtle influences on how the people who use the building interact. Every trip to the bathroom creates an opportunity to run into colleagues (for better or for worse). A good building is not merely attractive; it also “works.”

As we shall see, small and apparently insignificant details can have major impacts on people’s behavior. A good rule of thumb is to assume that “everything matters.” In many cases, the power of these small details comes from focusing the attention of users in a particular direction. A wonderful example of this principle comes from, of all places, the men’s rooms at Schiphol Airport in Amsterdam. There the authorities have etched the image of a black housefly into each urinal. It seems that men usually do not pay much attention to where they aim, which can create a bit of a mess, but if they see a target, attention and therefore accuracy are much increased. According to the man who came up with the idea, it works wonders. “It improves the aim,” says Aad Kieboom. “If a man sees a fly, he aims at it.” Kieboom, an economist, directs Schiphol’s building expansion. His staff conducted fly-in-urinal trials and found that etchings reduce spillage by 80 percent.

The insight that “everything matters” can be both paralyzing and empowering. Good architects realize that although they can’t build the perfect building, they can make some design choices that will have beneficial effects. Open stairwells, for example, may produce more workplace interaction and more walking, and both of these are probably desirable. And just as a building architect must eventually build some particular building, a choice architect like Carolyn must choose a particular arrangement of the food options at lunch, and by so doing she can influence what people eat. She can nudge.

Excerpt from Nudge by Richard H. Thaler and Cass R. Sunstein, published in 2009 by Penguin Books, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC. Copyright by Richard H. Thaler and Cass R. Sunstein, 2009.

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