From Nudge to Nobel

by Haley Trost | October 12, 2017
From Nudge to Nobel

There’s a parking ticket on my desk, right next to my computer where I can’t avoid it. I didn’t pay it the day I got it, and I haven’t paid it in the three weeks since. Every day I see it, and I think about paying it, but then… I don’t. Every day that I don’t pay the ticket, I’m making a decision - a bad one. Higher ed counselors and administrators can probably relate. Each day, they're thinking about how they can nudge students to make the right decisions. Often they don't. But why?

Richard Thaler might know. The winner of the 2017 Nobel Prize in economics is a pioneer in the field of behavioral economics, which seeks to understand why we act the way we do. His main takeaway: we’re not the rational beings we think we are.

Classic economic theory states that people make rational decisions based on their best interests. Behavioral economists disagree. They say that people are actually pretty bad at making decisions because of our biases, feelings, and past experiences.

So we make bad choices. We choose burgers over salads, go shopping instead of putting money in our savings accounts, procrastinate until - oops! - we miss the deadline.

People may behave irrationally, but behavioral economics says that we’re pretty predictable in our irrationality. We make the same mistakes again and again. Research shows that we often make poor choices when tasks are complicated, information is hard to find, or it’s simply easier to not take action. (My parking ticket falls into the latter category - why should I log on to the website, get out my credit card, and enter my information, when I could just… not?)

Combatting those bad choices

Luckily, Thaler has a solution. If you’re a frequent reader of Signal Vine’s blog, then Thaler’s solution to indecision and irrationality might sound familiar: nudging!

Because we can predict why someone might make a bad choice, we can try to intervene early on by nudging that person in the right direction. While many of Thaler’s recent nudge initiatives have focused on large-scale projects designed to influence public behavior, nudging can be done at any scale across most communication channels.

Nudge students to take action

Take text messaging, for example. Signal Vine’s history is deeply tied to behavioral economics, and the platform is designed to help organizations nudge students into making thoughtful, good decisions. For only a few dollars per student, institutions can nudge students to matriculate on time, stay enrolled, and make better choices about financial aid.

Texting is a powerful way to nudge students because it inherently overcomes many of the challenges Thaler cites as barriers to good decision-making. The medium forces you to condense your message into 160 characters and allows for links and calls-to-action that make it easy for students to take action.

Here are three changes you can make to nudge students with your texting program:

  • Make it easy. Whether consciously or not, many students choose to do nothing when confronted with a complicated task. Help students out by breaking down big steps into little ones.
    • Stick to a “one task, one text” rule by only communicating about one specific step in each text message.
    • Make sure your message includes a call-to-action so students can immediately take the next step.
  • Make it informative. Students often make bad decisions (or no decision at all) because they don’t have the right information and they don’t know where to find it. With texting, you can put the best resources right in their hands.
    • Send simple infographics that break down tasks, or maybe links to helpful videos or web pages. With the right information, students are more likely to make the right decision.
  • Make it the default. People are lazy. Behavioral economics tells us that when people are given choices, a common response is to not make a choice at all. Make this work to your advantage!
    • Instead of asking students to opt in to your texting program (which they won’t), give them the option to opt out. Students now have the option to stop getting texts, but research tells us that they probably won’t take that action. Science!

Time to go pay my parking ticket.

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