Now that a behavioural economics team is beavering away inside federal government, we increasingly are being nudged to do the right thing — to pay the proper taxes, reply to government surveys, choose more energy-efficient heaters and believe our GPs when they tell us we don’t need antibiotics for that annoying sniffle.
Critics don’t like the idea of government pushing us around with an invisible hand. They say that too often push becomes shove. But there are fans of the nudge and some of us have begun adopting this new branch of economics in our own households to achieve what we’ve always wanted — peace, sensible behaviour and the ability to get our own way. So, in the interests of better outcomes, here’s how to use the nudge in the home.
Behavioural economics has discovered everyone is loss averse. In fact, we hate losses 10 times more than we like gains. Take pocket money. You can leverage extra work out of the kid by promising her more pocket money or withholding pocket money, but you will get huge leverage if you threaten to take pocket money back after you’ve paid her. It’s called clawback, or mean parent syndrome.
Cognitive overload. Just think of the way tech giants get us to sign away our rights to privacy, copyright and our firstborn child by flooding us with hundreds of pages of reading or suggesting we just press the Agree button. Now you can rework that principle to your advantage at home. For instance, if you want to go on an elaborate overseas holiday, you could dump a load of brochures, schedules, timetables and travel insurance quotes on your partner’s lap and say, do you want to read all this or do you just want to give me your credit card number?
The endowment effect holds that we value what we already own more than what’s on offer, even if it’s the same thing. Next time you want to upgrade your car, try saying this. “Darling, I know you love your sporty car and wouldn’t dream of selling it with prices of used cars so low, so why don’t I sell the family van and buy a sporty little number because prices are so low at the moment?”
The framing effect is all about how the context of a price affects whether it seems expensive or cheap. This principle can be employed in any number of household decisions. To prepare your partner for credit card shock, have a chat about the 2018-19 budget deficit shortly before opening the statement. If you fancy a new lounge suite but your partner is feeling tight, flick through Vogue Living, tear out pages of advertisements for European suites, stick them on the fridge door and then suggest you both have a wander through Harvey Norman.
Opt out is one of the most powerful tools for wily economists because it plays on our laziness. So, if you want your partner to opt in, make opting out too hard. For example, you want to see that art house movie but your partner is reluctant? Try this. “Darling, I’ve booked two seats to see Dark and Disturbing Movie but if you really don’t want to see it, that’s fine, I’ll go with a friend and you can rustle up something for dinner while we’re dining at the local afterwards.”
A final ruse is the bandwagon effect. If your partner needs a nudge to go to the gym, say: “I saw your mate Paul the other day. He’s looking good, it’s the boot camp, I think. He said he’d like to have a beer with you but can’t on Friday night because he does spin class with Barry, George and Ian. They’re looking good, too.”
Economics in the household may sound a bit 101 but it shouldn’t be surprising that we employ so many carrots, sticks, nods, winks, frames and nudges in our daily negotiations because we invented those behaviours. Whether it’s how to arrange the pile of bills for your partner’s perusal, how to stock a fridge so the right snack will be chosen or how to shift a teenager off the couch by suggesting a nice chat, we are the masters of persuasion. The only news is that economists have tired of drawing graphs and modelling data and turned their attention to daily life where the masters of persuasion have always ruled. gmail.com