Category Archives: Social Behaviour

Dealing with Fraud


The incentive structure of Wells Fargo has been rightly criticized for the fake account scandal. The roasting of Wells Fargo CEO at the Senate panel hearing has also brought to question the responsibility of the senior executives. However, the overall narrative may be missing an important component – Perception of Risk.

We can safely assume that the front end employees, who carried out the transactions, were largely aware of the illicit nature of their actions. Most likely they also knew the potential consequences such as losing their job, facing charges or even serving prison time. How did the employee’s perceive these risks? What factors moderated their risk perceptions?

These are difficult questions. Unlike the incentive system that is tangible and easier to measure, risk perception is not. Risk is a feeling and feelings are hard to quantify. Our feelings may be moderated by our goals, our ability to deal with outcomes, our past experiences etc. They are also influenced by our social context. The social norms prevalent can easily override the written rules and policies. If people around us are performing deviant behaviors such as the one we are dealing with in this case, we are more likely to follow them. With over 5000 employees implicated, we can expect this issue to be present.

Alternatively, employees may be managing a very different kind of risk. For example, fear of losing their job in the immediate future. The temporal aspect of this risk may amplify it even further and employees might rate it significantly higher than the risk of getting caught in the far future.

So while we are discussing changes to structural aspects such as incentives and punishments, we also need to give adequate attention to the softer side of the issue. We need to design strategies to moderate the risk perceptions. Conventional tools such as awareness / education based trainings have limited impact. This is especially true when the behavior in question is fairly obvious. After all, there is nothing gray about opening a fraudulent bank account. Interventions that provide continuous feedback closer to the work context might be more effective.

This still leaves us with the question of measurement. One way to do that may be identifying lead behaviors. For example, are employees more forthcoming in discussing or informing potential issues? Are managers rewarding such positive behaviors? Are we seeing an increase in minor deviances? Measuring these behaviors can provide organizations the relevant prediction capabilities and also the time to activate preventative strategies. 

Managing organization risks requires focusing on both top-down and bottom-up issues. While we hold the executives responsible to develop the right kind of organization structures, we also need to design tools that ensure alignment of behaviors across the system.

Image Source: The Intercept

ESOMAR Excellence Award for the Best Paper 2015/2016

We are delighted with the news that our paper: Red Alert: Understanding the demand and supply side of girl child trafficking using a behavioural science approach has won the ESOMAR excellence award for best paper.

“The ESOMAR Excellence Award is given to the best paper from ESOMAR conferences throughout the year that best reflects the broad aspects and challenges faced by the market research industry today. All nominations are judged by an independent international jury and carries an ESOMAR-sponsored prize of €4,000”

Of the 6, Final Mile had 2 nominations.

One paper was based on our project to improve demand for Voluntary Medical Male Circumcision and the  winning paper was based on a project we did on finding behavioral science based approaches to prevent child trafficking.

“Trafficking in women and children violates the basic human rights to life, liberty and freedom to chart one’s own life course. Instead, it subjects the victims to cruelty, torture, dangerous and de- grading work, and inhumane living conditions. It is estimated that there are 20 million commercial sex workers in India, and around 80% of these are victims of trafficking”

Our project focus was on preventing trafficking by better understanding at risk populations, both on supply and demand side. Insights from this work have lead to new campaigns and on on ground initiatives that are showing promising results.

We thank ESOMAR for recognizing this work and deeply appreciate their efforts in providing us a platform to share this work which we are very passionate about.

Here is the press release from ESOMAR


India’s behavioral science policy unit – Challenges and wayforward

Two recent stories that appeared in Indian media suggest that the Indian Central (Federal) Government is looking to set up a behavioral sciences policy unit under the Niti Ayog, a Government of India policy think-tank established by the Narendra Modi government.

This news item that appeared in The Economic Times  suggests that the government has tied up with The Bill & Melinda Gates Foundation to set up the unit.

There have been several examples of Behavioral Insights units, starting with the one in the UK cabinet office. The Behavioral Insights Team is now partly owned by the cabinet office and calls itself a social purpose company. 

Niranjan Rajyadhyaksha of Mint had written this compelling piece on why the Modi government needs a Nudge unit. The Indian Prime Minister himself on occasions alluded to the behavioral nature of some of the problems, particularly sanitation.

Needless to say there are several advantages of such a unit. This well written editorial in Mint takes a more balanced view to such a unit. Incidentally, 4 of the problems outlined in the opening paragraph of the piece are problem areas Final Mile has experience using Behavioral Sciences.

The piece also points out some potential limitations of such a unit. There are areas where a nudge simply is not good enough, behavioral scientists themselves are not immune to bias and the fact that India is complex. We though believe that the complexity argument is over stretched. There is diversity in every country. Successive governments have been making policies  accounting for the complexity. Our experience in general has been that there are more similarities than there are differences. Dilip Soman, a well know behavioral economist suggests that “Complexity makes it more likely that soft interventions will work better than other options”.  A good next step  would be to recommend such a policy unit at the state level as well.

As pioneers in the field of applying behavioral science to solving real world problems, this is highly encouraging news. There are some challenges such a unit needs to navigate and, based on our experience, these are some of those. We understand that most of these if not all, would have been taken in to consideration by the decision makers.

  1. There is an inherent danger in assuming that a particular behavioral science principle is universally valid. There have been cases where using a principle blindly have backfired. There was a recent experiment where a company used social norms with a view to increase savings by it’s employees. It proved counter productive. In context testing is therefore key.
  2. One of the big crisis that hit the world of behavioral sciences and psychology is where many ‘successful’ experiments could not be replicated. This was particularly true of social priming. This paper co-authored by one of the senior employees at Final Mile has more detail  . There is a need to generate strong evidence before a policy or an intervention can be deployed. Rigorous testing is vital. As Richard Thaler, widely considered the father of behavioral economics says “You can’t have evidence based policy without evidence”
  3. Complex and wicked problems need a multi-disciplinary approach. A nudge unit team needs to bring in diverse skills. One that if filled with Behavioral Scientists may not be the best approach. In our experience, integrating design thinking with behavioral sciences can lead to powerful results. Equally important are measurement and evaluation experts
  4. Navigating through the government system and particularly the famed Indian bureaucracy is going to call for incredible amount of patience and tact.  
  5. Establishing value of such a unit is obviously critical. At a conceptual level, all this makes sense but government officials and ministers are keen on quick results. There are realities of electoral politics. A good approach would be take one or two areas and demonstrate value rather than trying to spread thin across ministries. Peter Kalil, Deputy Director for Technology and Innovation, Office of Science and Technology policy in the white house made some observations on this subject at the recently held Behavioral Science summit. It is far easier to take life sciences in to application. It’s tangible and we have experience and set systems. Taking behavioral science to people is not the same.  Framing results and writing for policy makers is quite different from writing an academic paper. And that working with existing programs is a much better way to overcome Status Quo bias. Launching new programs may not be the best way to go. 
  6. Libertarian Paternalism is a phrase that Prof. Richard Thaler and Case Sunstein coined. It might sound like an oxymoron, but it isn’t. In their own words “The idea of libertarian paternalism might seem to be an oxymoron, but it is both possible and legitimate for private and public institutions to affect behavior while also respecting freedom of choice. Often people’s preferences are ill-formed, and their choices will inevitably be influenced by default rules, framing effects, and starting points. In these circumstances, a form of paternalism cannot be avoided. Equipped with an understanding of behavioral findings of bounded rationality and bounded self-control, libertarian paternalists should attempt to steer people’s choices in welfare-promoting directions without eliminating freedom of choice.”  However, such a unit is likely to come under criticism from both the right and left of the political spectrum. The left would argue that you cannot call poverty a behavioral problem, the right might term this a “nanny state” initiative. These are extreme arguments but ones that have been made several times. Considering the possibility of sensationalism by the Indian media, such a unit needs to be prepared to effectively deal with criticism.

Ultimately, the success of this unit depends on government support and patience. The mandate needs to come from the highest level, like the White House Social and behavioral science team where President Obama issued an Executive order “that directs all Federal agencies to use insights from the behavioral sciences to make government programs easier to access, more user-friendly, and more effective” 

Obama also notes that “Adopting the insights of behavioral science will  help bring our government into the 21st century in a wide range of ways – from delivering services more efficiently and effectively; to accelerating transition to a clean energy economy; to helping workers find better jobs, gain access to educational opportunity, and lead longer, healthier lives”

The Indian unit could do with a similar endorsement from Prime Minister Modi.

Want well-behaved MPs? Stop televising parliament

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“Don’t use unparliamentary language”, a surprisingly common response to unwarranted rudeness used in parts of northern India, has long passed into oxymoronic folklore.

A Google video search on ‘Indian Parliament’ gives us the following top results: three funny speeches, one tearful speech, one fight, and one funny fight. Recent incidents in various Indian legislatures that captured the attention of traditional and social media have included such gems as: ruckus over members not taking their oaths in the regional language in a state assembly, legislators from two different states caught viewing explicit content on their cellphones, and displays of varying degrees of lawlessness by lawmakers from the Gangetic belt. During less exciting times, legislators have been in the news for succumbing to the strain of melatonin.

The desperate focus of news channels on trivial happenings in legislatures stems partly from the tedious and dreary nature of their proceedings. Parliamentary dynamics do not engender dramatic oration: they present few opportunities for an uninterrupted monologue, and there isn’t the luxury of having the audience lend one their ears. Speaking in parliament is instead a zero-sum game where the powers of the bully pulpit are leveraged not only by the speaker of a motion, but also by its responders, debaters as well as a set of accompanying actors- from thespian to ‘C’ grade.

More importantly, speaking in parliament represents a game of signalling, where assembly members constantly undermine their legislative roles (developing and modifying laws, checking the power of the executive), in favour of their roles as representatives of their voters and party. Many aspects of their behaviour may be explained as displays of loyalty to the party line and homages to senior leaders, or as exhibitions of self-sacrifice and commitment towards members of their constituencies. What we prescribe as good legislative behaviour- civility and decorum in the house- should ideally be heightened by the presence of live television cameras. In reality, these virtues are discarded and invalidated at the cost of signalling loyalty and commitment- aspects of electoral politics and statecraft whose importance is typically underestimated by outsiders. A few aggressive acts by legislators desperate to prove a point is all it takes to socialise such behaviour. Over time, competitive signalling among members across backgrounds and party lines will ensure that it becomes the norm.

The efficacy of both ‘games’ as well as legislators’ awareness about their potential for self-advancement, is multiplied several times over by the televisation and subsequent news coverage of parliamentary proceedings. Politicians have well identified the sensational and trivial aspects of legislative footage that news coverage is biased towards, and thus act in a manner that is bound to fetch them the tastiest slice of primetime. As Krishan Kant, former Vice-President and chairman of the Rajya Sabha had said, “Today, parliament and legislatures create a new breed of heroes- the well-rushing heroes, who hope to be elevated to instant national fame, straight from the well of the house.”

Such behaviour is not restricted to Indian legislatures. The same set-pieces of eyeball-grabbing tactics are employed by members of lawmaking bodies across the world- the most popular being the repeated and organised storming the well of the house, which is typically an area with the highest camera density. Another strategy is described by journalists as ‘doughnuting’: it entails surrounding the speaking legislator in order to create an impression of numerical strength around the argument being made. Interrupting and heckling front-benchers and senior members from opposing camps- resulting in momentary but precious camera time- is a behaviour often seen in parliamentary systems. In younger legislatures, turning stationery and uprooted furniture into dangerous projectiles is not uncommon.

What explains this universally exaggerated practice of signalling by politicians? Experimental psychology may have an answer: the concept of ‘reactivity’ defines the notion that individuals modify or improve an aspect of their behaviour in response to an awareness that they are being observed. In applied research, reactivity among test group subjects who modify their behaviour in aspects that are being tested by experimenters is known by a more well-known term- the Hawthorne Effect.

Several studies have demonstrated these phenomena, even in instances where the ‘observer’ isn’t human. Littering in a Newcastle University cafeteria was found to be lower on days when experimenters plastered wall-posters of staring human eyes, as opposed to days on which walls were adorned with pictures of flowers. In another experiment at MIT, participants were made to play a public goods game on a computer, with the test group being ‘observed’ by a robot with conspicuous eyes and a foreboding name- Kismet. The results showed that subjects that had Kismet on their screens displayed higher degrees of involuntary eye-detection movements to examine their levels of privacy, and were 29% more likely to contribute towards the public good, i.e. choose the less selfish option during the game.

These effects of reactivity, combined with mismatched notions of what constitutes ideal behaviour for a legislator, result in the Hawthorne Effect working in a perversely backwards way in many lawmaking assemblies in India and abroad.

The adverse costs of such behaviour among lawmakers have been conspicuous in the last two decades in India. There has been a dramatic growth in the mediums of parliament televisation, with the initial advent of cable television, followed by private news channels, and then 24×7 news coverage. As the stakes of being seen on TV have been raised by a larger supply of belligerent, sensationalised news, as well as the insatiable demand of the Indian viewer for daily political drama, lawmakers have gone to greater lengths to fulfil the requirements of the market.

Disruptions of parliamentary proceedings and by consequence its adjournments are the cornerstone of political signalling. It is not surprising that the amount of time lost to disruptions and adjournments in the lower house has seen an increase analogous to the growth of news media outlets- from 5% of total allotted time in the late nineties to 20% and 40% in the first and second UPA terms respectively (see graph). In the fifth session of the present Lok Sabha (July to September 2015), 72% of parliament time was wasted due to disruptions and adjournments.

Many readers will find these examples as further evidence to point out the redundancy and nuisance value of the Indian parliament. This argument does not support that claim. The parliament has in recent years put aside partisan differences to pass landmark legislation on education, transparency, nutrition and empowerment.

Moreover, dedicated legislators are making up for the signalling disruptors with dedicated work.  According to official data, a large part of ‘wasted’ time in the fifteenth Lok Sabha was made up for by some members staying after working hours for a total of 276 hours (or 20% of total allotted time). Not withstanding the policy paralysis in 2011-13 following the anti-corruption movements that swept the country, the number of acts passed by six successive Lok Sabhas has remained in the same neighbourhood (see graph)– in stark contrast to the sharp rise in time lost to disruptions.

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Substantive ground is being covered in parliament despite televisation-driven sensationalism, not because of it. Many journalists have raised doubts that the technical glitch that prevented televisation of parliament during the passage of the bill to create the new state of Telangana, may have been deliberately planned. While such clandestine actions by governments should be questioned, few can deny that the passage of the bill was largely peaceful and prevented further conflagration in Andhra Pradesh. The only downside was that the editorial staff in HQs had to be relayed the information on events by their field reporters, instead of a live feed.

On the other hand, the conspicuousness of unruly behaviour and disruptions makes them the face of parliamentary ethos, and erodes the faith of citizens in one of our most important institutions. It is hence time to trade in Big Brother for Dr. Ferber to ensure good legislative behaviour.


PS: An alternative- greater coverage of committees, discussions

The original purpose of televising parliament was to bring large-scale democratic education to the electorate. While stopping parliamentary broadcast may rob them of procedural insights, education on the larger democratic and legislative process may be ensured by focussing cameras or transcript recorders on the committees which oversee to-be laws in their important, formative stages, as well as general discussions. The non-profit C-SPAN network in the United States has rich, diverse programming on current events, as well as coverage of important Senate hearings- such as the appearance of Wall Street CEOs to answer for their role in the financial crisis. As of 2013, their programmes were regularly watched by 47 million Americans.



Nudging your way to five-stars

Consider this quirky data point from Uber: only 1% of trips in San Francisco gets a one-star or one-star rating according to their 2014 blog article. Even after accounting for the systemic screening of drivers and the fact that Uber drivers may not be a random sample of drivers, the 1% figure ‘feels’ too low for a population of at least 20,000. What could explain such a skew?

A few days ago, the driver (or driver-partner as Uber would like to call him) of an Uber cab I hailed belched through out the ride – disgusting, right! I had made up my mind to give him a one-star. At the end of the trip though, he did a curious thing – he rated me five-star and showed it to me, saying, “Sir, I gave you a 5”. This blog post is about the consequences of that act and how it goes a long way in explaining the skew.

Uber India drivers are master behavioral scientists, as are gold merchants and sari retailers (but that’s a subject for a different blog). The cleverness lies in their use of reciprocity to nudge an upward revision of the rating. Drivers, when ending a trip, are shown the rating screen – this happens usually when the rider is still in the car. To be a truly fair system, one would expect the driver to conceal their rating of the rider and vice-versa. Surprisingly, Indian Uber drivers rate the riders five-star and cheerfully show it to the rider. This simple act kicks in reciprocity in the rider. Suddenly, the rider is under pressure to revise the rating he had ‘decided’; northwards. From ‘this belching buffoon needs a rap on the knuckle and a one-star’ to ‘maybe I should give him a three-star, after all he gave me a 5’. Robert Cialdini, in the book ‘Influence’, says “we are obligated to the future repayment of favors, gifts, invitations, and the like” – he would be proud!

How would we design a system that doesn’t lend itself to being gamed? For a start, Uber could add a forced delay between the end of a trip and the feedback step. A one minute interval could be enough to retain the memory of the last trip (to ensure accurate feedback), while forcing distance between the rider the driver. It’s not a fool-proof system – drivers could still orally indicate the fact that they would be giving a five-star rating. But I wager that the ratings would be far more evenly spread than the 1% one-star skew Uber has presently – one that is representative of the ride!

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