As 2014 comes to a close, I’ve been reflecting on various books, presentations, research, tools and solutions, software and applications that I’ve been involved with and organizations I’ve been consulting to over the years. I’ve always found reflecting on the past to be useful in helping me better understand nuances in my values. In this post, I want to share my thoughts on design values related to behavioral economics and behavioral finance (which going-forward in this post I’ll simply refer to as behavioral science for brevity).

But what are design values and why do design values matter with behavioral science?

Design values are architectural principles that one lives by or follows when building things whether it be software, tools, websites, paper forms, or everyday objects and environments. For example, in the case of building a home, an architect’s design values for a project might be to minimize ongoing water usage relative to landscaping, promote interactions among the family during cooking and eating activities, and foster an energizing and happy environment through the use of natural lighting.

When one examines behavioral science and design, one maxim is that there is no neutral design architecture. That is, whenever you create something, decision-making and behavior may be influenced by virtue of the architecture. As an example of choice architecture, if a school cafeteria puts the fresh fruit near the front of the lunch line closer to the kids walking by versus the cookies further away, more fruit may be selected. In the case of information architecture, if people are presented with the dollar costs versus the annual percentage rate associated with borrowing money, people tend to better understand the implications of the former method. Process architecture is yet another area to think about, and the list probably goes on and on.

The implication is that design architecture influences people whether one intends it or not. While some influences may not turn out to be statistically significant, the body of behavioral science research has shown that many other influences have been shown to be very significant. So it’s better to be aware of potential influences or at least disposed to seek the truth.

With that as backdrop, here’s my Behavioral Economics and Behavioral Finance Manifesto (much like I did with my Management Consulting Manifesto back in 2011). Consider it an ongoing work in progress:

1. Every design architecture has behavioral implications – strive to recognize and measure what these are.
2. Distinguish between the interests of others versus self.
3. Intend to help, not manipulate. Recognize manipulation or influence (intended- or side-effects) and act ethically.
4. After having helped others to maximize their interests, then can consider helping oneself as an add-on or jointly maximizing the portfolio of interests between others and oneself. Clearly separate interests and call out where they align, don’t align, conflict, or don’t conflict.
5. Where possible, segment users. Where not possible, strive to design for most appropriate for most people most of the time. Recognize tiers or spectrums of possibilities.
6. When assessing design impacts, give consideration to common behavioral themes, including but not limited to:
   • Think broadly
   • Make things easy
   • Consider individual differences
   • Consider shifting preferences
   • Consider social context
   • Consider timing
   • Consider uncertainty and variability
   • Consider digital differences
   • Consider cognitive capacities
   • Consider heuristics and biases
   • Consider numeracy and literacy
   • Consider emotion
   • Consider fairness
   • Consider incentives
7. Be able to articulate the guiding principles for the design architecture, including guardrails and limitations.
8. Seek transparency with design.
9. Seek to understand the costs and benefits of design on behavior and outcomes.

Best wishes to all in the new year. Thanks for visiting!