SJDM 2013: InDecision team recommends…

SJDM toronto picGreetings from Toronto and the annual conference for the Society for Judgment and Decision Making! With the help of the InDecision team, we’ll be covering the best bits of the conference for you if you couldn’t make it (and even if you are here, we’ll have something for you, too). With dozens of great sessions on offer this weekend, choice overload is pretty much guaranteed. But fear not: we’ve scoured the program and selected the best ones to help you make the most of the conference. Here’s where you’ll find the InDecision team this weekend…

caroline new resizedCaroline’s picks

Research and Academia (Session #7) Questionable research practices. Misunderstanding or misuse of statistics. Lack of reproducibility. Many academic fields are currently going through several research-related crises and controversies. Different solutions are being proposed to improve the ways we conduct research, but I sometimes find it hard to keep up with all the suggested improvements for our different research practices. That is why I am always looking forward to conference sessions that can help me stay up to date with the most recent developments. The four papers presented in the session cover important issues, such as the replicabilitiy and reliability of behavioral research findings, and, most importantly, provide interesting solutions that I am really looking forward to learning more about. How to find it: Sunday, November 17, 2:45-4:15 pm, Civic South

The Relationship Between Altruism and Personal Benefits (Session #4) The existence of altruism, or whether humans can ever transcend self-interest, is an age-old question that is constantly being debated across different fields. It is a debate that I find quite interesting, so I am always drawn to conference sessions that provide new ideas, or revisit old ones, on the topic. I find this session particularly interesting because it explores the interplay between altruism and personal benefit and provides interesting findings about how perceived self-interested motives or outcomes can taint the judgment of seemingly altruistic behavior, among others. I am really looking forward to learning more about how this impacts people’s judgment and performance of altruistic or prosocial behavior, and whether there are any ways to overcome these effects. How to find it: Saturday, November 16, 3:15-4:45 pm, Simcoe/Dufferin

elina resizedElina’s picks

Applying Behavioral Economics in the Field: Nudging Customers to Pay their Credit Card Dues The fact that this session is talking about a large-scale field experiment makes this session unmissable for me to two reasons. The primary reason is that for me field experiments represent an exciting new phase for the field itself: after years spent in the lab it’s time to migrate to the outside world to see how our ideas perform in reality. It’s risky because we can’t control everything so the level of noise is likely to be high, and we have to find partners for it which brings its own complications. This bridge between academia and practice is one that I feel we need to cross to ensure the relevance of our work to the outside world, which ultimately defines the value of our work through funding. On a personal level I’m also interested in hearing about the practical challenges of running such studies as it’s close to my own research interests both as a PhD student and practitioner so I’m hoping to get some great ideas and inspiration from this talk. How to find it: Saturday 16th November, 3.15-4.45pm, Session #4 Track Ι: Choice Architecture 2 – Willow East

The Impact of Comparison Frames and Category Width On Strength of Preferences This session is definitely one I’ll be listening to with my practitioner hat on: understanding the strength of consumers’ preferences is at the heart of my work as a market research consultant. We know already that how options are presented to people changes how they perceive them, but when it comes to a real-life client scenario, it’s absolutely crucial to understand the nuances of how consumers make these comparisons to help advise our clients to emphasise the right attributes of a product. This might seem manipulative or even sinister, but just think for a moment about a product you really like: what if the “wrong” communication would have meant you’d never discovered that product? How to find it: Monday 18th November, 9.45-11.15am, Session #8 Track 2: Consumer Decision Making – Civic South

leigh resizedLeigh’s picks

Are risk and delay psychologically equivalent? Testing a common process account of risky and inter-temporal choice Research that unifies previously disparate effects is always interesting to me – because my instinct as a mathematician is to work towards ever more general and simpler (and therefore more powerful) models. If inter-temporal choice can be explained by the same process as probabilistic decisions, it takes us one step closer to understanding decisions in a coherent way. And this does seem a logical step: some accounts explain hyperbolic discounting as a rational response to the riskiness of a delayed reward – maybe if I hold off on eating the marshmallow and wait to get two of them, some unknown event will intervene and I won’t get any! However, it seems that these researchers have found evidence to counter this unification. I’ll be intrigued to hear what alternatives they put forward. How to find it: Saturday 16th November, 8.30-10am, Session #1 Track 2: Risk 1 – Essex

Partitioning option menus to nudge single-item choice This talk is interesting for me both for my consulting work with some commercial clients, and also because it feels like it could help understand how we compose small intermediate steps into larger decisions. Many complex decisions have various parts, and forcing people to unpack those individual steps (for instance by listing individual options separately rather than allowing people to integrate them into one bigger choice) may reveal some of the internal processes that are not directly observable. Classical decision theory (as used in rational economic modelling) assumes that separate choices can simply be added up to come to an overall totality of decisions, but the results of this paper seem to provide more confirmation that this doesn’t work. Seeing the differences between low-level and high-level choices may help us figure out a better way to put individual decisions together in a model and predict social behaviour. How to find it: Saturday 16th November, 10.30am-12pm, Session #2 Track 1 Choice Architecture 1 – Willow East

shereen resizedShereen’s picks

As a behavioral decision researcher, I am interested in finding behavioral solutions to policy-relevant problems. Indeed, I learned at APPAM this past weekend that there is a lot of room for behavioral research in the policy arena. With that in mind when looking at the SJDM program, I am focusing on talks that (1) investigate the practical elements that influence choice, or (2) identify either a behavioral problem or behavioral solution in a policy-relevant domain. For now, the talks in choice architecture (both of them) and financial decision-making are on the top of my list.

The first session on choice architecture addresses abstract but broadly relevant topics in choice architecture. These talks seem key to understanding basic concepts in this area such as defaults and choice sets. The second session on choice architecture delves into more area-specific interventions on choice and their effectiveness. These choice architecture talks have more direct relevance for policy, marketing, or other applications. With the recent formation of the Consumer Financial Protection Bureau (CFPB) in 2011, it is clear that policy-makers are concerned about the way people make financial decisions. The talks in the financial decision-making session speak directly to this concern with a series of experiments that either identify the obstacles people face in considering their finances and/or provide some way to mitigate these problems.

How to find them: Choice Architecture I – (Saturday, Nov 16, Track I, Session #2, 10:30am-11:50am); Choice Architecture II –  (Saturday, Nov 16, Track I, Session #4, 3:15pm-4:35pm); Financial Decision Making – (Saturday, Nov 16, Track III, Session #5, 5:15pm – 6:35pm)

troy resizedTroy’s picks

Cruel nature: Harmfulness as an overlooked dimension in judgments of moral standing “Cruel Nature” promises to be a great talk and not just because of its slick title. The talk will tackle an already controversial topic (the basis of morality) and throw an additional wrench into the puzzle (people respond to animals with moral emotions). The talk will be big in scope, have a good literature review, and will to lend itself to fiery conversation (or at least that’s how the talk played out when it was presented in multi-school Moral Research Lab). Piazza and colleagues propose that “harmful intent cannot be reducible to agency.” They use scenario studies featuring non human subjects like sharks to test and show this. This talk will ultimately try to critique the Agency-Patient model of morality, a model that is already a very new critique of also still relatively new Moral Foundations model of morality. With sharks, controversy and morality, even if you disagree with the speakers’ claims (and probably many people will), you’re guaranteed to have a good time. How to find it: Saturday 16th November, 1.30-3pm, Session #3 Track Ι: Morality and Ethics 1 – Willow East

Selfish or selfless? On the signal value of emotion in altruistic behavior This talk promises to be fascinating as it shows that the general populace holds a view of morality that widely differs from the view of morality most academics hold. Us ‘rational’ academics tend to think about morality like a math equation, where people sacrifice for others and don’t get any benefits – e.g. gifts or feeling a positive “helpers’ high” emotion. However, Barasch and colleagues show this is not the case. People actually think feeling a “helpers’ high” is a authentic signal of concern for others and are suspicious of the unemotional helper (e.g. the person many academics praise). The researchers do however show a boundary of this attribution which can help us understand where people in general see the line between selfish and selflessness in helping. How to find it: Saturday 16th November, 3:15-4:45 pm, Session #4 Track 3.

[N.B. Please check all session and presentation times in the official program before attending as typos may have slipped in!]

Final notes…

  • We’re covering the conference here (with a delay) as well as on Twitter both through @InDecision_Blog and our individual contributors: @RouxCaroline, @infomagpie, @leighblue and @troyhcampbell – conference hashtag is #sjdm2013
  • Don’t miss the Graduate Student Social Event on Saturday 16th from 6.45-8.45pm at the Willow Centre!
  • The InDecision dinner (featuring talks with three practitioners) on Saturday 16th still has 4 places left – please email elina@theirrationalagency.com asap if you want to join!
  • If you have any feedback on the blog or would like to get involved, please come speak to us – we’d love to hear from you!
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In The Wild: Kelly Peters

kelly petersThis week in our practitioner series we’re featuring Kelly Peters, Chief Executive Officer and Managing Partner at BEworks, a behavioral economics firm based in Toronto. She has over twenty years’ experience leading strategy, technology and innovation in major companies, including RBC Royal Bank of Canada and BMO Bank of Montreal as well as an an MBA from Dalhousie University with a concentration in financial services.

Tell me about your work: how does decision-making psychology fit in it? I am the CEO of BEworks, a management consulting firm dedicated to the application of decision-making psychology to real-world challenges. The firm has been grounded in the interdisciplinary marriage of science and business since its inception in 2010 with two leading academics; Dan Ariely, and Nina Mazar, and two accomplished business strategists; Doug Steiner and Louis Ng. We also have two academic advisors: David Pizarro, a social psychologist from Cornell University and Supriya Syal, a neuroscientist working on her post-doctorate at University of Toronto. The hands-on engagement of academics in our projects is one critical thing that distinguishes us from many firms. This lets us do cutting-edge primary research in partnership with clients who want a competitive advantage.

Although our work is research intensive, we are hands-on practitioners designing experiments to change workflow and improve marketing strategies. I have an unusual analogy to explain how we bring three new techniques in the fight to improve the bottom line. The first technique is the right jab, which is the insight from behavioral science that explainswhy people make the decisions that they do; the second is a left hook which is about formulating hypotheses of what and how to influence people’s decisions; and the third is a drop-kick, which is empirical validation of the ideas through rigorous experiments.

We are finding that business leaders and policy-makers are hungry for scientifically-grounded innovation and experimention. They are starting to see how behavioral economics offers new solutions and new thinking. Our projects run the gamut of the four Ps of marketing, product, price, promotion, and place, but also process improvement work like fraud and collections. We have a diverse range of clients from around the world in financial services, retailers, news media, health care companies and even political campaigns. And we are seeing the same anomalies in rationality in every domain!

How did you first become interested in decision-making psychology? Growing up in the 1980s, I played text games on a TRS-80 and was the one who programmed my family’s early electronic devices. In university I studied philosophy, sociology, literary theory, political theory, and contemporary art. I became interested in technology and its impact on society, which is really about the behavior of adoption (remember Geoffrey Moore’s Crossing the Chasm) and attitudes towards technology (from denial to enthusiastic). Reading about Ted Nelson’s Project Xanadu led me to start my professional career in 1993 as a consultant focused on helping companies understand why and how to develop a web presence. I worked on the dotcom launch crew of the largest media properties in Canada. And though the media companies were the first to get online, I believe their business model depends on micropayments. Financial services were the first industry to have a real application for online capabilities. I took on a role as director of product development for a financial services dotcom where the goal was to fundamentally change the behavior of how people conduct their banking.

Most of my career was spent leading business strategy and innovation teams. Success depended on understanding what will drive adoption of new products and services, how to engineer a meaningful customer experience, and increase utilization of new channels like online banking. Few people realize how heavily banking relies on behavioral insights  – whether it’s understanding how to encourage customers to use new banking channels like ATMs or online banking, or from cheques to electronic transfers; to drive savings or borrowing; to engineering new products and driving their adoption; to assessing risk; and managing collections and preventing fraud.

In the 1990s, behavioral scoring data models were being developed to capture both the quantitative aspect of a person’s financial wherewithal such as their capacity for debt service and collateral, but also quantify “character.” This behavioral variable is what explains why a wealthy person could be a bad credit risk and a poor person could be a good one. On the other side of the balance sheet behavioral finance explains why a wealthy person can be a terrible saver and a poor person can be a diligent saver. Retail and commercial credit risk, behavioral finance, and enterprise risk management are theoretical constructs underpinned by models that derive explanatory power from behavioral attributes.

I gathered insights from thought leaders in economics and political theory (Hayek, Schumpeter) and risk theory and history (Against the Gods: The Remarkable Story of Risk by Peter Bernstein and Nassim Taleb’s book Fooled by Randomness). While these books provided incredible insight on how people are irrational, it was the work on “choice architecture” led by behavioral economists that provided the ah-ha, here’s how these insights can be applied to influence behavior. I devoured the research of Dan Ariely, Amos Tversky, Daniel Kahneman, Richard Thaler and Cass Sunstein along with the work of psychologists like Robert Cialdini. Businesses, and the academic programs they draw from, like MBAs and commerce degrees, ought to incorporate behavioral research and the scientific method if they want to understand their customers in non-intuitive or subjective experiential ways.

While at the RBC Royal Bank of Canada, I had the support of amazing executives and mentors to launch a series of behavioral economics projects starting in 2009. I had the joy of working with Piyush Tantia, John Balz and the ideas42 team. I also partnered with thought leaders like Nina Mazar and Dilip Soman at the University of Toronto & Rotman School of Business, which is in the process of becoming known as a global hub for applied behavioral economics research. With the support of the bank, I moved on to join Dan Ariely and our other partners to help build BEworks.

What type of research do you find most interesting, useful or exciting? This is a very difficult question! Every day is interesting and exciting and presumably useful! We continue to enhance our methodology. The incredible thing about behavioral science is it is endlessly refining what is understood about humans since there is a myriad of ways people are both rational and irrational! We launched our Diagnostics Toolkit in 2010, and after extensive research we recently launched a more comprehensive version. And, of course, seeing the results of our hypotheses validated through experiments is the most exciting part of what we do.

We also recently launched our Behavioral Economics Lab. We’ve started to conduct primary research in areas that we think are important or interesting. For example, we are in the midst of a series of experiments on retail investor risk appetite. Our hypothesis was that the conventional approach to measuring investor risk appetite is fraught with biases. We were able to demonstrate with simple decoys that investor risk appetite is quite malleable and prone to framing effects. This disutility is disconcerting because it gives investors and their advisors bad information about what financial strategies to pursue. We are excited that industry partners, investor education organizations, and regulators are very interested in our research. Our next step is to design and experiment with prescriptive solutions.

Do you see any challenges to the wider adoption of decision making psychology in your field? We have criteria for the kind of client we work with! We know that it’s hard for people to change and a number of things keep business leaders and policymakers doing things the same old way. But once leaders learn how to run their own experiments instead of relying on past experience, intuition, or outside experts who say they have all the answers, strategy formulation isn’t the same. Our clients have to be ready and committed to a scientific approach – both in the knowledge we bring to the table and the empirical approach to our work.

An interesting trend will I think work in our favor. The “quantified-self” movement is encouraging people to generate data and statistics in their everyday lives – how much time is spent in REM when they sleep, how many steps they take, and miles they drive. It is much easier now to be empirical in our everyday lives thanks to incredible technology innovation. Once people start looking at things with an empirical lens, relying on intuition becomes less satisfying. Most businesses struggle to make sense on the data they are gathering and giving it a purpose. The next natural step, which is where we can help, is grappling with how to employ this data to change behavior.

How do you see the relationship between academic researchers and practitionersThis relationship is the foundation of our company. Our team is a collaboration of academics and business consultants. Each partner brings a background of successful academic/business partnerships. In addition to our core team of experienced associates, we also have a strong team of interns currently pursuing degrees in psychology, economics, and public policy, so this adds to our bench strength. Our process is a virtuous circle of learning. The academics are committed to expanding the theoretical understanding of human nature. The practitioners like to see if and how these ideas hold in the real world which in turn provides further fodder for theoretical research. This integrated approach allows us to develop ideas that are both innovative in theory and in practice. We are growing the business by adding researchers who want to try and apply their academic pursuits with willing clients, and business people who aren’t afraid to set current practices aside. Plus the academics love playing with our large data sets.

What advice would you give to young researchers who might be interested in a career in your field? Like academia, the business world has its own language with arcane words like “solutioning” and “concretize” and concepts like “value-add” and “straw-dogs.” Just hang in there! You’re saying the same thing: modulations are “tactics” and findings are “results.” And there is similar methodological thinking to problem solving that was brought into business by a fair number of folks with engineering degrees. I believe that social scientists bring the same level of analytical thinking and rigor from their work with experiments and statistical analysis, plus they bring the evolving universe of cognitive and social psychology, and neuroscience.

We are teaching many businesses what to do with social science PhDs and helping social science PhDs who don’t know how they can use their skills in commercial terms. To academics, our platform presents the classic answer to their real world questions:  I wonder if I tried this with real data and real people, what the outcome would be, and whether it could change the way people act?  Few companies currently research or experiment in the way that a PhD has been trained to do. This is the essence of how BEworks is trying to change the nature of how business and policy leaders develop their strategies.

Kelly is also one of the speakers at a dinner organised by InDecision at the annual conference of the Society for Judgment and Decision Making in Toronto. The informal dinner will follow the Graduate Student Social Event (6.45pm to 8.45pm) Saturday 16th November at Joe Badali’s restaurant, a 5-minute walk from the conference venue. 

The informal dinner is an opportunity for graduate students to hear from practitioners on how they are applying JDM research in their work – other speakers include pricing consultant and writer Leigh Caldwell from The Irrational Agency and Paul Sas, principal research scientist at Intuit. 

Places are limited so please email to secure your place in advance. Some remaining spaces may still be available on Friday at registration desk on arrival at the conference. (For more details on either event please contact elina@theirrationalagency.com)

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In The Wild: Tom Ewing

tom ewingNext up in our series of practitioners embracing the world of JDM research is Tom Ewing, Chief Culture Officer at market research agency BrainJuicer, where he works in the Labs team, helping translate the findings of decision science and psychology into methods that create business advantage for clients. His background is as an Internet analyst, social media researcher and journalist. His 2012 paper for BrainJuicer, “Research In A World Without Questions”, looked at the possibilities of observational and behavioural research in a commercial context, and it recently won the ESOMAR Excellence Award for the best market research paper of the year.

Tell me about your work: how does decision making psychology fit in it? BrainJuicer is a commercial market research and behaviour change company whose mission is to take advances in human understanding and to turn them into commercial advantage. And “human understanding” means behavioural economics, psychology, and decision science.

We want to create behavioural change for our clients. For commercial clients, this means applying the behavioural sciences to a brand owner’s problems and creating opportunities for them and their retail customers. For public service clients, this often means changing behaviour for healthier outcomes. For shoppers, customers, users of services, this means making decision-making faster and easier, and often making it more enjoyable too.

So our Behaviour Change Consultancy will take a client’s brief, understand the behaviour they wish to change and create behavioural activations that we test experimentally to demonstrate their effect.

Our research approaches support our goal to change behaviour for our clients, and are designed to “reflect and predict what people will actually do”, rather than what they think they do and say they will do – the standbys of traditional research. For instance, we put people under time pressure to recreate fast, System 1 decision-making in packaging and promotions research; we harness people’s social sense to understand the likely success of new product launches; we establish how people feel about advertising to predict its efficiency. And much as we like to test iteratively in our behavioural work, we like to re-test our recommendations to clients to demonstrate the value that we can bring.

How did you first become interested in decision making psychology? On a personal level it’s a natural fit with the curiosity that inspires most market researchers. First of all, you’re curious about what other people do, then you’re curious about why they do it. And then you realise that the stated reasons aren’t actually getting you very far and you want to dig further into how things really work.

As a company BrainJuicer has had an interest in consumer psychology long before I joined – we’ve been doing emotional ad testing since 2007, and tapping crowds for concept testing since 2004. Putting behavioural economics at the heart of our offer has been exhilarating for us as a company and fits with our conviction that market research has been getting consumers wrong for years – putting too much trust in claims and norms and not being curious enough about what people actually do.

What type of research do you find most interesting, useful or exciting? There’s often a gap between the interesting and the useful! Behavioural economics is made up of such a horde of studies, biases, heuristics, and findings that it feels initially like a game of Pokemon: you gotta catch ‘em all, and it seems almost impossible. In order to make it useful you have to make it accessible and tangible to non-specialists – which means you have to streamline it. We use a “Behavioural Model” which uses broad categories of environmental, personal and social influences on decisions that make sense to clients.

The idea is always to get from theory to action as quickly and easily as possible. So the work that leaps out at us tends to be the field experiments that help us to illuminate and bring the thinking to life – real-world test sites, ideally measuring real money changing hands at some point. That’s the arena we’re looking to play in, and frankly those are the findings which get us and clients most excited.

We are fans as well as practitioners. I still love a beautifully constructed experiment or unexpected finding. But it doesn’t really match the satisfaction of being able to change behaviour for our clients; to show how we might reduce hospital infections resulting from poor hand hygiene or to demonstrate how we might reduce binge-drinking.

Do you see any challenges to the wider adoption of decision making psychology in your field? Yes. The long term challenge is pretty similar to the one that faces economists trying to turn around textbook economics thinking. You end up with lots of acclaim and a few prizes but people still make the same mistakes based on the same bad theories. Changing behaviour is hard, and it doesn’t stop being hard just because you know about behaviour change. Industrialised market research has twenty years of norms which exert a powerful and reassuring pull on decision makers, even though they’re based on completely faulty models of how decisions work. We can’t talk about fast and easy decisions without facing up to the fact that choosing the existing option is the very definition of one!

The short term issue, I think, is that there’s an awful lot of excitement at the moment around technology – the power we now have to collect behavioural data. New technology is sexy, easy to adopt and an easy incremental step to take; changing your whole worldview is difficult, breaking habits is hard and systems are in place that make change difficult. So it’s understandable that technology often seems of greater interest to the industry than decision-making science. Who needs psychology when you have big data? Well we do, and more than ever. You absolutely need a thorough grounding in psychology to explain behaviour and tell you how to change it.

How do you see the relationship between academic researchers and practitioners? For BrainJuicer, it’s been mutually beneficial. Our Behavioural Model and the thinking that underpins our products has been developed in conjunction with academics. But you can’t change behaviour through pure argument and persuasion. If we are to change the behaviour of marketers, advertisers and other people in the research industry, we need to make the case for behavioural economics as engaging and as seductive as possible. I am firmly on the side of the popularisers over the purists.

Our behaviour change projects often involve extensive literature reviews by academics. We read a lot ourselves and have a database of studies with proven real-world effects. If it wasn’t for the academic research there would be no practitioners – we stand on their shoulders and we have to do right by them. And as practitioners it’s our job to apply the theory and make it matter.

What advice would you give to young researchers who might be interested in a career in your field? I think at the moment a background in decision science would be an incredible asset for a commercial research company – particularly if you’ve got experience in setting up experiments and how to properly control them. Market research has always been a melting pot of a profession – it’s drawn in psychologists, anthropologists, statisticians, technologists, arts graduates – and while it’s slightly more professionalised these days there’s still a thirst for relevant experience among the smarter companies. But we also need creatives, illustrators, designers, statisticians, writers and speakers to apply the theory, check it works and make it famous. So jump in, it’s an exciting time!

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