14 MAR 2018: Why do we do what we do? Why do we want what we want? How do we decide? These three issues constitute the building blocks of a provocative series of blogs Travel Industry Today will be publishing over the next few weeks.  

Geoffrey Bailey has written extensively about travel, economics and psychology. He knows travel industry experts are keen observers of the personal and professional idiosyncrasies of clients and fellow professionals. But he wonders, do we recognize that behavior is determined by influences that are both unconscious and irrational - including the way decisions are made about a wide range of consumer choices – travel being high on that list?

Travel professionals track markets and trends. We predict, attempt to predict, and target the latest in-vogue destinations, but do we realize how rational and logical those decisions often are?

So, get ready for something a little different - a blog series that will provide insight, surprise and perhaps even the occasional shock.

Here’s the first.


NUDGE

by Geoffrey Bailey

The people who administer Amsterdam’s Schiphol Airport did something provocative and pivotal a few years ago. They decided to engrave the image of a housefly immediately above the drain in the men’s washroom urinals. Result? The aim of the men using the facilities dramatically improved and spillage was reduced by 80 percent.

Schiphol Airport management was responding to the views of Richard H. Thaler, a professor of economics and behavioral science at the University of Chicago.

Professor Thaler was awarded the 2017 Nobel Prize for Economics, as a result of codifying the concept of a nudge into an explanation of human bias and temptation.

The funny thing about human behavior

The scientific evidence is clear that human behavior is, more often than we might care to admit, determined by influences that are both unconscious and irrational.

We are all subject to biases of one kind or another, based on prejudice (none of us are immune to that!), social pressure and cognitive inertia – a fancy way of describing the natural human reluctance to alter or amend an ingrained practice, whether that is a personal habit or a business routine.

Here are examples of nudge theory in action:

Hotel towels

According to McKinsey & Company, hotel guests are 30% more willing to reuse their towels, as they would at home, when they are given a social cue that tells them how other people act in the same situation, e.g., ‘Most other guests in this room’ choose to reuse their towels. Nudges work.

Organ donation in Spain

Spain has an enviable record for being a world leader in organ donation, for the simple reason that its citizens are automatically enrolled in a system such that, upon death, their vital organs can be legally harvested for medically necessary use – unless they have alerted the authorities to opt out. Nudges work.

UK workplace pensions

In the UK it has been standard practice for some time to automatically enroll everyone on to a workplace pension, but give them the choice not to. The result? The majority stick with the default, and millions more Britons are saving for retirement. Nudges work.

Conclusion: the ethical use of nudges

Writing in The New York Times (The Power of Nudges, for Good and Bad) Professor Thaler stated: ‘Nudges, small design changes that can markedly affect individual behavior, have been catching on. These techniques rely on insights from behavioral science, and when used ethically, they can be very helpful. But we need to be sure that they aren’t being employed to sway people to make bad decisions.’

So, watch out for those add-ons your mobile phone provider installs – and tries to automatically bill you for – unless you tell them to stop.

They’re nudges, too, and I don’t like them. Neither should you.

 

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