incentives – Things which are used to motivate behaviour; these can be financial, but are more broadly defined as the benefits or costs of a given behaviour.
joint attention – From infancy, we have the inclination to follow people’s eye gaze.
loss aversion – We feel the impact of losses twice as much as equivalent gains.
mere exposure effect – The more familiar we are with things, the more we like them.
messenger effect – When evaluating a piece of information, we are significantly influenced by its messenger.
optimism bias – We tend to think we’re more likely to experience positive events in the future and underestimate the chance of negative events.
p-hacking – The practice of manipulating a data set in order to acquire a specific p-value.
p-value – The level of significance of your statistical analysis. A small p-value indicates that there is a low probability you got the results of your experiment by chance, so a small p-value means you can trust your results.
picture superiority – Our brains process images in just 13 milliseconds compared to the 300 milliseconds it takes to read a word, and up to 400ms to understand what that word means. Therefore, images are an efficient way to communicate information.
power of because – When people provide us with a reason for a request, we tend to automatically comply, even when the reason is specious.
power of free – Zero is a special number when it comes to price and we are irrationally drawn towards things which are free.
pratfall effect – People come across as more likeable once they’ve made a small mistake.
present bias – We are impatient and biased towards decisions that give us instant gratification, rather than ones with delayed gratification.
primacy effect – We find it easier to remember the beginning of a list, rather than the middle. The beginning of an experience can shape peoples’ overall impression of it.
priming – Our decisions can be subconsciously influenced by environmental cues.
realistic conflict theory – A psychological model of conflict between groups. Hostility between groups comes from competition for scarce resources.
recency effect – We find recent information easier to remember.
reciprocity – We are social animals and form networks of trust by making reciprocal commitments to each other. When we are given small gifts or tokens, we are motivated to rebalance this debt.
relativity bias – We make perceptual judgments relative to their surroundings.
salience – We pay more attention to things that are salient and those to which our eyes are drawn.
scarcity – We value objects and resources that are scarce more than those in abundance.
serial-position effects – We find it easiest to recall things which come at the beginning and the end; see also primacy effect and recency effect.
social identity – We derive part of our identity from the groups to which we belong. In order to increase our self-image, we look for ways to enhance the status of the groups to which we belong.
social norms – These are the unwritten rules of social behaviour.
social proof – We tend to adopt the behaviour of those around us, following the norms of the social group; see also conformity.
status quo bias – We prefer to go with the flow and stick with things as they are; see also default bias.
Theory of Interpersonal Behaviour (TIB) – Conceptualises behaviour as a function of intentions, habits, and facilitating conditions. One of the TIB’s strengths is its ability to explain complex behaviour as a result of social and environmental factors.
transtheoretical model – Also known as stages of change, this is a theory which describes the process of deliberate behaviour change, such as smoking cessation.
word superiority effect – When we’ve been shown words very briefly, we tend to find it easier to guess the whole word rather than individual letters.
Introduction
Seemingly small nudges can lead to sustained ripple effects on our world
We jump on a plane to fly halfway around the world and stay in a stranger’s house which we’ve booked on Airbnb. After successfully bidding for a set of Titleist irons on eBay, we happily send £699.99 to golfmad_90 in Anglesey. And we’re more than comfortable with climbing into the backseat of a random Toyota Prius, hailed using Uber.
If you’d recounted these counterintuitive decisions to someone a few decades ago, they’d have been aghast. Why on earth do we trust these people who we’ve never met, let alone heard of?
It’s all down to one simple mechanism: seller feedback.
How has this seemingly tiny nudge had such a seismic effect on the way we live our lives and the way businesses operate?
We are social creatures who rely on networks of trust to form communities. Once upon a time, you would have happily given a box of eggs to your neighbour safe in the knowledge that, when the time came, he would return the favour by giving you a bag of sugar.
In our current economy, it’s necessary to make transactions with people whose reputations are unknown. So how do we know who to trust?
To make these decisions, we’re forced to rely on a proxy of trust in the form of seller feedback. After taking an Uber trip, for example, you rate your driver and your driver rates you. These scores are combined to create one measure which others can rely on when making a decision about whether to trust you. If other people have given you positive feedback, then we take this as social proof that you are a trustworthy human being.
Small nudges with seismic ripple effects
Seller feedback, on the surface, looks pretty inconsequential – it’s a simple star rating. Far from it. This is an example of a small feature which has enabled organisations such as Uber, Amazon, eBay and Airbnb to scale into billion-dollar businesses. This small nudge, or ripple in the water, has had butterfly effects across our entire economy. It completely changed the rules by which our hotel, transportation and retail industries operate.
And just as this minor mechanism has had a seismic effect on our economy, so other small behaviour changes can have a monumental ripple effect on businesses.
Anybody can harness the power of behavioural science and apply small nudges in the real world to create long-lasting and positive ripples of change. This book will inspire you to do so and show you how. We want to empower you to lead this change by applying behavioural science in your working life.
Amazing discoveries are continuously being made in academia, and these have started to be applied in policy. What they haven’t yet been translated into, however, are widespread applications in business. For example, how can behavioural science help the conversations you have on the phone, the letters you write and the webpages you design? To see how far the field has come, and where Ripple fits in, we’ll first take a look at the evolution of behavioural science to date.
The evolution of behavioural science
As behavioural science has slowly seeped into our collective consciousness, there have been three major stepping stones. The first, an epic stride, was the acknowledgement from academics that humans, contrary to the long-held assumption of economists, do not always behave rationally. Work from the godfathers of behavioural science during the 1970s to the 2000s – Daniel Kahneman, Amos Tversky, Cass Sunstein, Richard Thaler, Dan Ariely and Robert Cialdini – revealed hundreds of our brains’ systematic biases and decision-making shortcuts.
The second stepping stone was the concept of applying behavioural science in the