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From tackling sludge to building a digital lab, Behavioural Economics in Action at Rotman (BEAR) and partners are pushing insights further

December 11, 2020

Now in the second year of a five-year Behaviourally Informed Organizations partnership project (funded by the Social Sciences and Humanities Research Council of Canada), BEAR Director Dilip Soman reflects on what the group has accomplished so far and what lies ahead.

Whether it’s about nudging employees towards productive habits or recognizing (and removing) biases inherent in their standard practices, all organizations are in the business of behaviour change. The real challenge comes in understanding how to implement the science effectively.

Professor Dilip Soman, a Canada Research Chair in Behavioural Science and Economics and director of Behavioural Economics in Action at Rotman (BEAR)

“We know a lot about the science of psychology, behaviour change and behavioural economics, we just don’t have a good system for supporting organizations in using that science,” explains Dilip Soman, a Canada Research Chair in Behavioural Science and Economics and director of Behavioural Economics in Action at Rotman (BEAR).

“You can imagine the types of questions practitioners are up against: can they simply use the results of a scientific paper as-is and expect it to work for them? When should they question it? How do they know whether the context in which that academic research was conducted mirrors the situation they’re in?”

Developing a framework to support organizations with taking abstract behavioural science concepts and incorporating them into their practices is central to the new Behaviourally Informed Organizations (BIOrg) Partnership headed up by the BEAR team. The partnership — made possible thanks to a $2.5 million partnership grant from the Social Sciences and Humanities Research Council of Canada (SSHRC) — is made up of 20 researchers and 18 partner organizations (including private organizations, government agencies, non-profit organizations and think tanks) from across the globe.

Having recently completed the first year of its five-year project, the team has much to be proud of — and even more to look forward to.

Off to a productive start: examining sludge and putting ideas into action

One especially exciting accomplishment for the group is their progress in understanding sludge — the frictions, obstructions and small annoyances that add up to prevent people from getting things done. (To get an idea of sludge, just think about waiting in long lines to return purchases or the hours spent on hold trying to cancel subscriptions.)

As they describe in an introductory whitepaper on sludge, and in their proposed plan for a sludge scorecard (both released earlier this year), as well as in a forthcoming book on the topic (co-authored by Soman), sludge is widespread.

“I think most of us assumed that it was confined to government agencies or businesses that seemed inefficient of slow-moving,” he says. “Sludge is everywhere. If your organization has ever launched a new product or introduced a program that made sense but people didn’t pick it up, it could be because the process was clunky, there were psychological barriers, or your message missed the mark. In other words, there was sludge.”

Most excitingly, BIOrg is putting its ideas into action. Right now, they are working with several partners including the World Bank, ideas42 and the Canadian Privy Council Office on identifying and eliminating sludge in their programs.

As Soman points out, conventional economic theory doesn’t hold up in certain social assistance programs. For instance, only 16 per cent of eligible families have taken advantage of the Canada Learning Bond program (a scheme that offers lower-income parents $2000 of ‘free money’ to put towards their children’s education).

The parents that don’t take up the offer are likely struggling with sludge, says Soman. It could be psychological barriers (feelings of embarrassment related to accepting a perceived hand-out) or the clunky processes (like the time and patience involved in waiting in line at a service centre, filling out confusing paperwork and signing up for a registered investment account at a bank — all of which are required to collect the funds).

Beyond this work, in its first year, the team has also been making great strides in understanding the psychology of risk, developing a framework for behaviour change, getting a handle on how to nudge people towards making healthier and better financial decisions and investigating the science of using behavioural science.

The team has also trained undergraduate, master’s, doctoral and postdoctoral researchers at their home universities, and spread their knowledge through conferences, workshops, debates, and webinars.

For Soman, the best part is being able to break out of the rigid research models often imposed in academia.

“Traditionally, it has been the case that research faculty create knowledge, somebody translates it, and then somebody else uses it,” he says. “For the kind of work we’ve set out to do, it is not possible to create knowledge independently from our partners. They are actively involved in co-creating the research, and that itself is exciting. It’s different from what most other universities and business schools do.”

Get ready for new and exciting resources

In the next four years, we can expect to see new and robust resources coming out of the BIOrg partnership, says Soman. And it’s much needed and long overdue.

Right now, the group is hard at work constructing a digital lab.

“Organizations don’t experiment as much as they need to because it’s costly — not just in terms of time or money, but there’s a mindset cost and a fear of failure,” he says. “We’re envisioning a virtual place where practitioners can collect data, run studies and test out interventions they’re thinking about, with low risk and low cost.”

Further to that, they’re looking to create and distribute more resources summarizing key insights and collective wisdom in the field.

“I think there's a lot of hidden knowledge, tucked away in people's heads, company documents or unpublished papers. We want to tap into those hidden resources, work on the analysis and come up with a systematic way of spreading those insights,” he explains. “Hopefully, it will be disseminated in a way so that anyone – a policy maker, a health practitioner, a marketer — can understand it and see how they can use it in their roles.”

Ultimately, he’s excited about developing new insights with such an engaged group of researchers and practitioners.

“What I’m most looking forward to — and what I’m most proud of — is getting such a diverse group together and working collaboratively on figuring out the big issues in behavioural science and economics.”

Written by Rebecca Cheung | More Rotman Insights »

Meet the researcher

Dilip Soman

Canada Research Chair, Behavioural Science and Economics

Director, Behavioural Economics in Action at Rotman

Read his full biography