Habit, Judgment, and Doing the Right Thing—by Design

We are creatures of habit. Studies show that approximately 45% of our behaviors are habits that we enact automatically with little or no conscious intent. While one study found it takes 66 days to form a habit on average, breaking a habit is another story.

In business, marketers stake their careers on creating new consumption habits in order to maximize profit. In short, they try to establish a well-oiled cycle of “cue, craving, response, and reward” through which their product or service will be consumed. While their ingenuity and creativity are commendable, some of their practices lead to serious societal problems including widespread addiction to excessive eating, drinking, smoking, shopping, gambling, gaming, and sex. Addictive habits die hard. Regulating these harmful business practices often takes years or decades of efforts in both the public and private sectors.

In The Power of Habit: Why We Do What We Do in Life and Business, the Pulitzer-Prize winning reporter Charles Duhigg tells stories of extreme habits and how they affect people’s lives. One of them is about a woman addicted to gambling. She starts off moderately, abiding by her internal spending rules, but gradually becomes addicted and starts betting her inheritance money away even while desperately struggling to quit. Her go-to casino, Harrah’s, plays a crucial role in her addiction. It tracks her gambling behavior, calls her for casual conversations to predict how much money she has for gambling, and encourages her spending by offering her free meals and cash vouchers. As her spending escalates, they ramp up the benefits, offering expensive tickets and family trips to exclusive destinations for free. She makes many attempts to resist her craving, even moving to a state where gambling is illegal, but she always eventually gives in. When she informs Harrah’s that she is almost broke, and that she has lost about $900,000 over her lifetime to gambling, they respond by offering her a line of credit and encouraging her to come back, promising her it would be different the next time. Harrah’s Casino has increased its profit by billions of dollars thanks to this customer relationship approach, which it secretly calls “Pavlovian Marketing” after the famous physiologist Ivan Pavlov.

Although this story represents an extreme case, similar schemes are everywhere in consumer markets. These schemes are applications of so-called “behavioral designs” for influencing and shaping our behaviors. Belief in “free will” feels ever so fragile before masterfully optimized behavioral designs. But as unsettling as they seem, behavioral designs can also be a powerful tool for good, enabling us to effortlessly live better. Imagine if kids happily went to school, played nicely with peers, savored every minute of learning, completed homework with zeal and creativity, and then went on to pursue fulfilling careers—all thanks to behavioral designs.

The behavioral economist Iris Bohnet of Harvard Kennedy School is a strong proponent of behavioral designs aiming to guide people in desirable directions. In What Works: Gender Equality by Design, Bohnet explains that our behaviors—including our judgments and decisions—are constantly influenced by external and internal factors of which we are seldom aware. One such example in What Works reveals how business school students are influenced by their own subconscious biases when viewing a male or female individual with the identical successful career. The students all read a case study of the individual, but half of the students saw the name Howard, and the other half, Heidi. Students rated Howard higher in likeability than Heidi, and were more interested in hiring or working with Howard even though they recognized Heidi as equally competent and effective. Later, the students learn that Heidi is a real person, but Howard is not, and are thereby made aware of their gender bias. Our judgment is affected by external factors as well; for example, our mood or thoughts may vary depending on the weather or performance of local sports teams in the previous night. We are also influenced by internal factors such as hunger or exhaustion. For instance, a study on the parole rulings of Israeli judges revealed that they ruled far more leniently right after meal breaks than other times.

Instead of focusing on consciously changing people’s minds, Bohnet proposes to use behavioral designs to subconsciously nudge people towards the desired behavior and outcome, or carefully structure the default setting. According to What Works, Google helped their employees save more for retirement by reminding them often and setting goals in addition to making participation in company retirement programs the default. In another example, one of the Singapore government agencies experimented to print tax payment reminder letters in either the regular white or pink paper. People who received the pink letter paid their taxes far more than those who received the white letter. As an example of smart default setting, in the 1970s and 1980s the Boston Symphony and other major orchestras made blind auditions as default in order to eliminate gender bias. The judges can only hear the music, but cannot see the musician playing the music. As a result, the fraction of female musicians in the five highest-ranked orchestras in the U.S. increased from 6% in 1970 to 21% in 1993. This increase is significant considering the low turnover in symphony orchestras in general.

In a related context, a 2002 Nobel laureate psychologist and economist Daniel Kahneman and his collaborators have been extensively studying how to improve judgment and decision-making. In Noise: A Flaw in Human Judgment, Kahneman and his co-authors show how human judgment is ridden with biases as well as unwanted variabilities—which they call “noise”—in many domains of society: court, medicine, forensic science, forecasts, job interviews, performance ratings, and more. They conclude that, “although a predictive algorithm in an uncertain world is unlikely to be perfect, it can be far less imperfect than noisy and often-biased human judgment,” and propose several “decision hygiene” strategies, including using transparent and structured guidelines and algorithms which are optimized as needed. Nonetheless, the authors admit that many of us strongly resist using such guidelines and algorithms, including artificial intelligence, because we have an intuitive preference for people to be the decision-makers. The authors point out that a key reason for our resistance is the unwillingness to give up the reward of decision-making: the gut feeling that our answer is right, even in the absence of supporting evidence. This means we have two problems: we do not yet have tools to guide us to make unbiased, noise-free judgments and decisions; and even as we develop such tools, many of us would resist using them.

In neuroscience, the brain region that enables us to “do the harder thing when it’s the right thing to do” is the frontal cortex according to the Stanford biologist and neuroscientist Robert Sapolsky. In Behave: The Biology of Humans at Our Best and Worst, Sapolsky explains that the frontal cortex has an impressive portfolio of expertise, including working memory, executive function (i.e., organizing knowledge strategically and subsequently initiating an action based on an executive decision), gratification postponement, long-term planning, regulation of emotions, and impulsivity control. All these functions are crucial for us to do the right thing, but require slow and careful deliberation, which is so taxing to the frontal cortex that it gets easily exhausted. When that happens, inner temptations and impulses can easily win over rationality and compassion. Studies show that we are less prosocial—that is, charitable or helpful—and more likely to lie when the frontal cortex is overloaded (N. Meand et al. (2009), M. Hagger et al. (2010), C. DeWall et al. (2008), W. Hofmann et al. (2007)).

Citing studies examining honesty in association with brain activity, and interviews of people who took brave actions to rescue others in danger, Sapolsky argues that both consistent honesty and brave actions occur instantly with no forethought. He proposes achieving automaticity—synonymous with “making it a habit”—as a solution to doing the right thing instead of constantly relying on conscious mental effort. Once automaticity is achieved, telling the truth or helping someone in need becomes implicit and automatic—just like riding a bike, according to Sapolsky. You don’t think about it. You just do it.

We are still in the early stages of reining in the unwanted biases and “noise” affecting our judgment and decision-making. Enforcing guidelines and algorithms to reduce these factors may provoke strong resistance among people, but considering that behavioral designs have long been implemented and optimized behind the scenes for commercial success, societal behavioral designs show immense potential to contribute to the future success of humanity by improving human decision-making, and promoting desirable behaviors.

Bibliography

Books

Charles Duhigg. The Power of Habit: Why We Do What We Do in Life and Business. Random House, 2012.

Iris Bohnet. What Works: Gender Equality by Design. Belknap Press: An Imprint of Harvard University Press, 2016.

Daniel Kahneman, Olivier Sibony, and Cass R. Sunstein. Noise: A Flaw in Human Judgment. Little, Brown Spark, 2021.

Robert M. Sapolsky. Behave: The Biology of Humans at Our Best and Worst. Penguin Press, 2017.

Academic Publications

Wood, Wendy, Quinn, Jeffrey M., Kashy, Deborah A. “Habits in everyday life: Thought, emotion, and action.” Journal of Personality and Social Psychology, Vol 83(6), Dec 2002, 1281-1297.

Neal, David T., Wood, Wendy, & Quinn, Jeffrey M. “Habits: A repeat performance.” Current Directions in Psychological Science, Vol 15, 2006, 198−202.

Lally, Phillippa, van Jaarsveld, Cornelia H. M., Potts, Henry W. W., Wardle, Jane. “How are habits formed: modelling habit formation in the real world.” Euro J Soc Psychol. 2010; 40:998–1009.

McGinn, Kathleen L., and Nicole Tempest. “Heidi Roizen.” Harvard Business School Case 800-228, January 2000. (Revised April 2010.)

McGinn, Kathleen L., and Nicole Tempest. “Howard Roizen.” Harvard Business School Supplement 910-007, April 2010.

Goldin, Claudia and Cecilia Rouse. “Orchestrating Impartiality: The Impact of “Blind” Auditions on Female Musicians.” The American Economic Review 90.4 (2000): 715-741.

Shai Danziger, Jonathan Levav, Liora Avnaim-Pesso. “Extraneous factors in judicial decisions.” Proceedings of the National Academy of Sciences Apr 2011, 108 (17) 6889-6892; DOI: 10.1073/pnas.1018033108

N. Meand et al., “Too Tired to Tell the Truth: Self-Control Resource Depletion and Dishonesty,” JESP 45 (2009): 594; M. Hagger et al., “Ego Depletion and the Strength Model of Self-Control: A Meta-analysis,” Psych Bull 136 (2010): 495; C. DeWall et al., “Depletion Makes the Heart Grow Less Helpful: Helping as a Function of Self-Regulatory Energy and Genetic Relatedness,” PSPB 34 (2008): 1653; W. Hofmann et al., “And Deplete Us Not into Temptation: Automatic Attitudes, Dietary Restraint, and Self-Regulatory Resources as Determinants of Eating Behavior,” JESP 43 (2007): 497.

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