Behavioural Economics in Real Life

Do it London

The London HIV Prevention Programme has launched a campaign that is designed to increase awareness about HIV, sexually transmitted diseases (STDs), and sexually transmitted infections (STIs). Moreover, it promotes HIV testing and encourages the practice of safe sex. The initiative offers sexual promotion advice and free condoms.

The behavioral economics principle used in this campaign is message framing. Prospect theory proposes that framing messages can have a huge influence on the preferences and choices of people (Tversky and Kahneman, 1982). Moreover, people tend to be risk-averse when messages are framed as gains, and risk seeking when messages are framed as losses. In fact, it was found that gain-framed messages encourage preventative health behaviors more so than loss-framed messages (Gallagher and Updegraff, 2012). 

5p carrier bags

The British government implemented a policy to put a 5p charge on every new plastic carrier bag used in supermarkets in England. The policy encourages shoppers to re-use their plastic bags in the effort to curb usage, which severely affects the habitats of wildlife and massively contributes to carbon emissions. The 5p charge has been successful across other countries of the UK. For instance, Wales saw a 71% drop in bag usage after having implemented the policy in 2011. The government estimates that the campaign will greatly reduce the carbon footprint, equivalent to taking 35,000 cars of the road. Over the next 10 years, it is expected that the 5p charge will raise £730 for charitable causes.

The effectiveness of this campaign is attributed in part to the Incentives aspect of the MINDSPACE principles (Dolan et al., 2010). For instance, supermarkets like Sainsbury’s offer extra points to loyalty cardholders for reusing their plastic bags. Also, Sainsbury’s incentivizes this re-usage by trading in old bags for new ones free of charge.

John Lewis Christmas Advertisement

John Lewis has launched a Man on the Moon campaign to raise money for older people for Christmas. In partnership with the UK’s largest charity working with older people Age UK, the advertisement aims to raise awareness for the problem loneliness among elderly people and features a fundraising appeal. When certain John Lewis products are bought, 25% of the proceeds go to this charity. These products include cards or mugs.

The effectiveness of the charity campaign lies in the MINDSPACE principle called Messenger (Dolan et al 2010). This principle upholds that we are heavily influenced by who communicates information. The John Lewis brand is widely recognizable across the UK. By endorsing Age UK’s message of raising awareness for charity, the John Lewis brand will allow for the message to gain more traction and reach a much wider audience. It will also inevitably influence people to donate to charity this Christmas and to reach out to their elderly family members.

Amazon Prime

Amazon Prime is an annual subscription programme, which offers a plethora of services, ranging from unlimited access to movies to a one-day delivery for eligible items. The membership costs £79 per year for adults and £39 for students. Amazon offers a 30-day free trial to new customers, allowing them to experience the broad array of services that having a membership entails. Once the 30-day free trial expires, the membership automatically renews itself and upgrades to an annual plan. However, customers have the liberty of opting out whenever they please.

The membership programme uses a MINDSPACE principle called Defaults (Dolan et al 2010). When a new customer opts in for the 30-day free trial, it is more likely that the customer will stick with the service and become a permanent member. This occurs due to the fact that decisions are psychologically effortful and humans are cognitively lazy. The decision to actively opt out of the service requires cognitive effort. For this reason, many customers remain opted in. 

Transport for London (TFL) London Cycle Hire Scheme

In this scheme, people can hire bicycles to travel and dock them at any docking station across the city. It is a very cost-efficient strategy for travelling around the city. The first 30 minutes of any cycle hire is free, and it costs £2 to gain 24-hour access to a bike. TFL also provides information on how to discover the “hidden gem cycle routes” in London, promotes bike rides around the city, and offers free of charge personal cycle training. The scheme has the intention of promoting exercise as part of a healthy lifestyle, bicycling as an alternative means of travelling to cars, and reducing congestion in public transport.

The scheme uses a MINDSPACE principle called Norms (Dolan et al., 2010). On the TFL website, it is emphasized that “thousands of people” use the cycle hire service. It is a means of telegraphing to the user that using cycle hires is a socially accepted rule of behavior. By the same token, it sub-communicates that it is socially contagious to hire cycles.

Stoptober

Stoptober is a Public Health England campaign that encourages cigarette smokers to abstain from smoking for the entire month of October. Starting from October 1st, smokers will have the chance to quit smoking for good by participating in this 28-day event. The enticing message of the campaign proposes that people that quit smoking for 28 days are 5x more likely to quit smoking altogether. The campaign offers support in the form of information and advice to help smokers complete the challenge.

The campaign uses MINDSPACE principles such as Commitment and Ego (Dolan et al 2010). People will use commitment devices be consistent with their public promises and achieve their goals. Therefore, by publicly taking part in Stoptober, participants will inform other participants of their promises and will want to act in accordance with them. Regarding the principle Ego, people want to project a favorable image of themselves to the world and will act in accordance with this image. Also, they want to act consistently with how they view themselves – their self-image.

 

 

 

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