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NUDGE Glossary — INFLUENCING BEHAVIOR E_MFDM_NIB
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NUDGE Glossary — INFLUENCING BEHAVIOR E_MFDM_NIB
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Slides:Choice architect = designs the choice environment so as to encourage the chooser to
select a preferred choice.
Intuition = a quick judgment or a hypothesized initial proposal with little modification.
Endowment effect = the finding that people are more likely to retain an object they own
than acquire the same object when they do not own it.
Overconfidence = a person's subjective confidence is greater than the objective accuracy
of those judgments.
Dunning-Kruger effect = a cognitive bias whereby people with low ability, expertise, or
experience regarding a certain type of task or area of knowledge tend to overestimate their
ability or knowledge.
Better-than-average effect = the tendency for people to perceive their abilities, attributes,
and personality traits superior to their average peer.
Mass defaults = apply to all customers
Benign defaults = best guess, most acceptable to most customers (one-size-fits all)
Random defaults = arbitrarily assigned to one of the default options
Hidden options = default is the only choice, but hard to find alternatives do exist
Personalized defaults = tailored to individual needs
Smart defaults = set to specific segment or individual based on demographic or
geographic variables
Persistent defaults = based on former choice (satisfaction and loyalty, but
annoyance when preferences change)
Adaptive defaults = update over time depending on given information
Confetti regulation = command-and-control or prohibitory regulation of behavioral design
features in brokerage apps. Such regulations might cover confetti splashes, push
notifications, leaderboards, behavioral prompts, and the like.
Intertemporal choice = the process by which people make decisions about what and how
much to do at various points in time, when choices at one time influence the possibilities
available at other points in time. These choices are influenced by the relative value people
assign to two or more payoffs at different points in time.
Temptation = a desire to engage in short-term urges for enjoyment that threatens long-term
goals.
Time inconsistent preferences = people make patient choices for the future because they
want to stick to the original plan, if they could but change them later on because people want
instant gratification more.
Instant gratification = the temptation, and resulting tendency, to forego a future benefit in
order to obtain a less rewarding but more immediate benefit.
Exponential discounting function = implies that the marginal rate of substitution between
consumption at any pair of points in time depends only on how far apart those two points
are.
Hyperbolic discounting function = a time-inconsistent model of delay discounting. A
cognitive bias, where people choose smaller, immediate rewards rather than larger later
rewards and this occurs more when the delay is closer to the present than the future.
Delay discounting task = choice between a smaller immediate reward versus a larger, later
reward.
Loss aversion = people hate to see their paychecks go down.
Money illusion = people have a tendency to view their wealth and income in nominal terms,
rather than recognize their real value, adjusted for inflation.
, Commitment = an agreement or pledge to do something in the future.
Temptation bundling = linking an action you want to do with an action you need to do.
Commitment devices = mechanisms that impose restriction of choices. These are tools
used by the “planner” to prevent the “doer” from exhibiting present bias.
Goal setting theory = an employee-engagement tactic that involves setting specific and
measurable goals to improve productivity. Goals need to be specific, measurable,
achievable, relevant and time bounded.
Theory of planned behavior = a psychological theory that links beliefs to behavior. The
theory maintains that three core components, namely, attitude, subjective norms, and
perceived behavioral control, together shape an individual's behavioral intentions. In turn, a
tenet of TPB is that behavioral intention is the most proximal determinant of human social
behavior.
Charismatic = a person who possesses special traits that attract, inspire, or fascinate other
people.
Persuasion = a process in which one person or entity tries to influence another person or
group of people to change their beliefs or behaviors.
Social influence = most people learn from others. This is usually good, learning from others
is how individuals and societies develop. The ways in which people alter their behavior to
align with those around them
Compliance = the act or process of complying to a desire, demand, proposal, or regimen or
to coercion. The state of being in accordance with established guidelines or specifications, or
the process of becoming so.
Reciprocity = a situation or relationship in which two people or groups agree to do
something similar for each other, to allow each other to have the same rights.
“Door in the face” technique (DITF)= big, unreasonable request is followed up by a small
reasonable request.
“That’s not all” technique = give original price, then reduce it before the target has the
possibility to respond.
Familiarity = the state of being familiar; a state of close relationship; intimacy.
Mere exposure effect = a psychological phenomenon by which people tend to develop a
preference for things merely because they are familiar with them.
Consistency = consistent behavior or treatment. Harmony between actions and practices
Cognitive dissonance = the perception of contradictory information, and the mental toll of it.
The mental discomfort that results from holding two conflicting beliefs, values, or attitudes.
People tend to seek consistency in their attitudes and perceptions, so this conflict causes
feelings of unease or discomfort.
Foot-in-the-door technique (FITD) = a compliance tactic that aims at getting a person to
agree to a large request by having them agree to a modest request first.
Labeling = an approach in the sociology of deviance that focuses on the ways in which the
agents of social control attach stigmatizing stereotypes to particular groups, and the ways in
which the stigmatized change their behavior once labeled.
Low-balling = an offer that is significantly below the seller’s asking price, or a quote that is
deliberately lower than the price the seller intends to charge.
Social proof (consensus)= a psychological and social phenomenon wherein people copy
the actions of others in an attempt to undertake behavior in a given situation.
Authority = the power or right to give orders, make decisions, and enforce obedience.
Scarcity = the gap between limited resources and theoretically limitless wants.
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