Behavioral Economics Driven by Digital Design

All design drives behavior, but how well does it do in achieving goals?  Financial domain an obvious space where there are numbers and needs.

How Digital Design Drives User Behavior
Shlomo Benartzi, Saurabh Bhargava in the HBR

Decisions of all kinds are increasingly made on screens — and with that shift comes an often-ignored consequence: the design of the digital world can profoundly, and often unnoticeably, influence the quality of our decisions.

A review of recent research provides clear evidence that many organizations are currently undervaluing the power of digital design and should invest more in behaviorally informed designs to help people make better choices. In many cases, even minor fixes can have a major impact, offering a return on investment that’s several times larger than the conventional use of financial incentives or marketing and education campaigns.

In our recent working paper, written with Lynn Conell-Price at the University of Pennsylvania, and Richard Mason at City, University of London, we collaborated with Voya Financial, a leading retirement service provider, to investigate how variation in the digital design of online enrollment interfaces could influence the initial contribution decisions of employees in 401(k) plans. The research involved more than 8,500 employees across a few hundred plans, who prior to being automatically enrolled in the plan, had visited a standardized online enrollment interface to either actively confirm their enrollment at the default rate, personalize their enrollment at a different rate, or decline enrollment altogether by selecting one of three horizontally arranged options. Our goal was to get employees to consider a deferral rate higher than the default, which is often too low to achieve financial security in retirement.  ... "