digital ethics : helping your brain to make decisions online

DIGITAL ETHICSHelping your brain make decisions online

ANNA BYRNEManaging Partner, Decisioning

© Decisioning Pty Ltd 2016. Use only with permission.

ABOUT OUR WORK

• Working with leaders to solve complex people problems• Based on how our brains work (social cognivite neuroscience & behavioural economics)• Examples

» Do products and services deliver ‘win-wins’ for customers? » Does your organisational ecosystem encourage people to act

in the ways your want? » How effective is your leadership and board decision-making?

• Also working with regulators and large institutions (eg. World Bank) » How can we drive better outcomes for society by working

with our brains (not against them)?


BIG IDEA - THERE ARE TWO SYSTEMS IN YOUR BRAIN

emotional

rationalSYSTEM 2

SYSTEM 1


BIG IDEA - THERE ARE TWO SYSTEMS IN YOUR BRAIN

emotional

rational

• Slow• Controlled• Conscious• Cognitively demanding• Novel situations

• Fast• Automatic • Unconscious• High intensity• Habitual behaviours


Who makes our decisions?

The rider?

the emotional brain

the rational brain


NOT ALWAYS...!


Key insights from

behavioral economics


WASH


WASH

SO_P


WASH

SO_PA


WASH

SO_PU


EAT

SO_P

WASH

SO_PU A


A few extras... (from more than 300 biases)Anchoring bias

Using an initial (often irrelevant) piece of information to shape subsequent predictions or

assessments

“The real estate agent said that the house would be worth about $600,000. I think it’s worth $610,000.”

Halo effect Extending positive attributes of a person or brand to the things they promote or opinions they hold

“George Clooney is drinking Nespresso. George is cool, so Nespresso must be cool.”

Confirmation bias Seeking out and noticing only information that

confirms an existing decision or point of view

“I spoke to other people and they said exactly the same thing”.

Correlation causation Inaccurately perceiving a relationship or link

between two unrelated events

“As ice-cream sales increase so do drownings, so ice-creams are causing people to drown”

Status quo bias Preferring to keep things relatively the same

“If it ain’t broke, why fix it?!”

Loss aversionChoosing to avoid a loss, even when there is the

potential to make an equal (or even greater) gain

“I won’t ride a bike to work, because the health benefits are not worth the risk of injury.”

Information biasUsing extra information to increase your confidence

in a choice (even if the information is irrelevant)

“Big data will help us make better decisions”.

Herd instinct Doing or believing things because other people are

doing it“Why is everyone looking up? (and then looks up)”

Rhyme as reasonSeeing rhyming statements as more truthful

“If the gloves don’t fit, then you must acquit.” - O.J. Simpson trial with the defence team

Peak–end rule Judging an experience by its peaks (ie. highs and lows) and how it ended

“It was great - we got a free gift at the end!”

In-group bias Preferring people who are part of your ‘tribe’ and acting in ways that confirm membership of the group

“That politician is one of us, I’ll vote for him.”

Endowment effectpeople ascribe more value to things that they own .

“I bought this bottle of wine for $50 last week, but I wouldn’t sell it for anything under $100 now.”


BIASES

SOME COMMON (AND UNCONSCIOUS)Decision-makingAnchoring bias Using an initial (often irrelevant) piece of

information to shape subsequent predictions or assessments

“The real estate agent said that the house would be

worth about $600,000. I think it’s worth $610,000.”Halo effect Extending positive attributes of a person or brand

to the things they promote or opinions they hold

“George Clooney is drinking Nespresso. George is

cool, so Nespresso must be cool.”

Confirmation bias Seeking out and noticing only information that

confirms an existing decision or point of view“I spoke to other people and they said

exactly the same thing”.Bizaareness bias

Remembering material more easily if it is unusual

or ‘out of the ordinary’

“I thought it was a weird painting, but I’ll never

forget it.”

Correlation causation Inaccurately perceiving a relationship or link between

two unrelated events

“As ice-cream sales increase so do drownings,

so ice-creams are causing people to drown” Status quo bias Preferring to keep things relatively the same

“If it ain’t broke, why fix it?!”

Loss aversionChoosing to avoid a loss, even when there is the

potential to make an equal (or even greater) gain

“I won’t ride a bike to work, because the health

benefits are not worth the risk of injury.”Information bias

Using extra information to increase your confidence

in a choice (even if the information is irrelevant)

“Big data will help us make better decisions”. Google effect Not remembering information that can be found

online“I used to remember how to get there, but now I just

use google maps”.

Herd instinct

Doing or believing things because other people are

doing it (particularly from a relevant in-group)

“Why is everyone looking up? (and then looks up)”Humour effect

Remembering things more easily if they are

presented in a funny or entertaining way

“You don’t need to outrun a lion, you just need to be

faster than everyone else!”

Rhyme as reasonSeeing rhyming statements as more truthful

“If the gloves don’t fit, then you must acquit.” - O.J. Simpson trial with the defence team

Peak–end rule Judging an experience by its peaks (ie. highs and

lows) and how it ended“It was great - we got a free gift at the end!”

Actor–observer bias Assuming other people’s negative behaviours

reflect their personality and their positive behaviours are due to the

environment - but doing the opposite in relation to your own behaviours

“I was mad because I was stressed, but my supervisor is just a highly-strung person.” Picture superiority effect

Learning and recalling concepts more easily when

they are presented as pictures (rather than words)

“It didn’t make sense until I saw the infographic.”

In-group bias Preferring people who are part of your ‘tribe’ and

acting in ways that confirm membership of the

group“That politician is one of us, I’ll vote for him.”

Part of the NeuroPower Group of companies


Three ways to manage

cognitive bias derailers

❶Increased awareness

For consciously observable

decision-making biases

❷Emotional regulation

For biases linked with emotion

❸System design and

environmental cues

For biases that are difficult to

observe and aren’t emotional


But what does this mean for buisness.... and ethics?


Strategy and decision-makingCustomer interactions

Employee performanceStakeholder managementOrganisational ecosystem


Avoiding pitfalls

Strategy and decision-makingCustomer interactions

Employee performanceStakeholder managementOrganisational ecosystem

Maximising opportunities


Avoiding pitfalls

• Increase rider awareness of risk

• Remove peanuts from the ‘wrong’ places

• Increase rider awareness of opportunity

• Put peanuts in the ‘right’ places

Maximising opportunities


But what about the digital space?


What do elephants do online/on screen?

Order more baconBuy what’s

in the middle

Spend too much on health insurance


What do elephants do online/on screen?

Order more baconBuy what’s

in the middle

Spend too much on health insurance

• Assess trustworthiness in milliseconds based on complexity and visual appeal

• Overvalue produtcs if shoping with a touchscreen

• Remember stuff that’s ugly


Key takeaways?


Three key questions...


Which biases are most relevant to your work - particularly in the digital space?

How much are you helping the rider be aware?

Where are all the peanuts?


www.decisioning.co


digital ethics : helping your brain to make decisions online

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