The gentle nudge


“In the past three decades, psychologists and behavioural economists have learnt that people’s choices can be dramatically affected by subtle features of social situations. For example, inertia turns out to be a powerful force. If people’s magazine subscriptions are automatically renewed, they renew a lot more than if they have to send in a renewal form. Moreover, people are influenced by how problems are framed. If told that salami is “90 per cent fat-free” they are far more likely to buy salami than if they are told it is “10 per cent fat”.

Social norms matter a lot. If people think others are recycling, or paying their taxes, they are far more likely to recycle and to pay their taxes. The important message is that small details can induce large changes in behaviour.”

Our Bank has taken years to realise that people do not present themselves at the Bank on the due date of the maturity of the term deposit receipt.It is much much later they turn up and ask usually for its renewal with back date and in just 10% of cases only either they do not turn up at all or when they turn up they ask to cancel the deposit .It takes a lot of research to understand a thing like this which essentially bureaucratic institutions do not undertake in the context of constantly changing personnel .Consequently reading behavioural patterns in the depositors is just not done in the normal course and the remedial action such as what our bank has taken i.e.automatic renewals for a similar period as the earlier one with an implied assumption that the depositor will renew the deposit goes by default.

The gentle nudge thing is another practical phenomenon actually seen in daily life.In the way the forms are structured the preferences of people can be easily moulded along a predesigned path leading to the achievement of a desired goal.

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