Sunday, September 17, 2023

[Book Review] A First-Rate Guide to the Power of Choice Architecture

Source:  Penguin Random House LLC

Over the past several decades, psychologists and other behavioral scientists have conducted thousands of research studies examining various aspects of human decision-making. Thanks to this research, we now know that people use a variety of mental shortcuts known as heuristics to make decisions.

Research has also found that our decisions and actions are greatly influenced by how choices and options are presented. This particular aspect of decision science is called choice architecture, a term that was coined by Richard Thaler and Cass Sunstein in their 2008 best-selling book Nudge.

The principles of choice architecture and the practice of "nudging" have been implemented in many business, non-profit, and governmental settings, but choice architecture is still not understood as well as it needs to be. That makes a recent book by Eric J. Johnson an important read for marketers.

The Elements of Choice:  Why the Way We Decide Matters (Riverhead Books, an imprint of Penguin Random House LLC, 2021) explains the psychological principles that underlie choice architecture and describes the tools that choice architects can use to influence our decisions and actions. 

Eric Johnson is a recognized authority on human decision-making. He is the Norman Eig Professor of Business and the director of the Center for Decision Sciences at the Columbia Business School. He previously taught at Carnegie Mellon, the Sloan School of Management, and the University of Pennsylvania. According to the Institute for Scientific Information, Johnson is one of the most highly cited scholars in Business and Economics.

What's In the Book

The Elements of Choice contains ten chapters. In the opening chapter, Johnson introduces the major topics he addresses in the balance of the book, and he briefly discusses his professional journey in human decision-making.

In Chapter 1, Johnson also describes his objective for the book and the perspective he will use throughout the book. He writes:  "This book goes well beyond the simple idea that defaults and other choice-architecture tools can nudge people into desired behaviors. It's much more important to understand how choice architecture changes choices."  (Emphasis in original)

One of Johnson's main points in The Elements of Choice is that choice architecture largely works by influencing a decision maker's plausible path and assembled preferences. He discusses plausible paths (the strategy a decision-maker chooses to use to make a decision) in Chapter 2, and he covers assembled preferences (the memories that most easily come to mind when we're faced with a decision) in Chapter 3.

In Chapters 5-9, Johnson covers the major tools and techniques of choice architecture.

  • How to use defaults (Chapter 5)
  • How to decide how many options to offer (Chapter 6)
  • How to decide what order to use when presenting options (Chapter 7)
  • How to describe options (Chapter 8)
  • How to design and build online choice engines (Chapter 9)
In the final chapter, Johnson discusses some of the ethical issues surrounding the use of choice architecture and offers some ideas about how marketers, other business leaders, and policymakers can be responsible choice architects.
My Take
The Elements of Choice is an important addition to the growing body of literature about the use of behavioral science principles in marketing.
The book is clearly written and easy to read, although Johnson does tend to ramble a bit at times. He includes several useful anecdotes and examples in the book, but some are longer than necessary.
The content of the book is supported by extensive scientific research. Johnson includes over 170 detailed endnotes and provides a 25-page bibliography of resources that interested readers can consult.
The Elements of Choice is a valuable resource for marketers because it advances our understanding of choice architecture in two important ways. First, Johnson discusses numerous research studies that have demonstrated the power of choice architecture tools and techniques. This discussion reinforces the importance of choice architecture in the marketing toolbox.
Equally important, Johnson does an admirable job of explaining why choice architecture works. Unfortunately, many resources about choice architecture - and the related concept of "nudging" - describe the tools, but don't address why the tools are effective.
Johnson fully appreciates the importance of understanding "why" and "how" choice architecture works. He writes:  "Without understanding the processes underlying choice architecture, we can't be responsible designers [his term for choice architects]. Knowing how choice architecture works will allow us to invent new and more effective tools."
Marketers present choices in almost every communication they create for their potential buyers. Therefore, whether they realize it or not, marketers regularly function as choice architects. The Elements of Choice provides insights that can enable marketers to design and present these choices in ways that will improve marketing performance.

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