Decision Science Background

Decisions – big and small

Every day we make as many as 35,000 decisions. Some are relatively trivial- about what to have for breakfast, which route to take to work, about which shoes to wear. Others we may consider to be more serious- whether to rent this particular house, who to date or marry, or whether a loan is a relatively good deal.
Conventional economics assumes that individuals make logical decisions about all these things and in their own interests. That would involve significant time and effort deciding what to do. But scientific study over the last 10-15 years shows that’s not the case.

The Nobel prize winners Daniel Kahneman and Richard Thaler showed that in fact we make these decisions using what’s called System One: our fast-moving ‘autopilot’ decision system. The complement is System Two: the slower, more rational ‘pilot’ process of weighing up options.

Daniel Kahneman
Richard Thaler

Kahneman’s big idea...
our behaviour is driven by two systems

SYSTEM 1
How we think

Implicit
Fast
Intuitive
Instinctive
Emotional
Unconscious

Thinking Woman
SYSTEM 2
How we think we think

Explicit
Slow
Analytical
Learned
Rule-based
Conscious

Decision Science draws on three overlapping areas- illustrated opposite.

Three Way Behavior Chart : Evolutionary Psychology, Neuroscience and Behavioral Economics

Heuristics

Much of decision science is focused around heuristics, the fast rules of thumb we have all developed to help us deal with the sheer number of decisions we have to make  Some of these rules relevant to fundraising are outlined below.

Decision Heuristic

Anchoring

Implication

We respond unconsciously to an initial stimulus in our  subsequent choice. If someone is willing to make a gift, and you ask for a larger gift initially, then you are more  likely to secure an actual gift at a higher level. The  larger initial number ‘anchors’ the result.

Decision Heuristic

Framing

Implication

The context or frame in which something is experienced makes a difference to the result. So you might consider framing a request for support as an investment rather than a gift. This framing might encourage some supporters to offer a gift but think of it in a different way.

Decision Heuristic

Nudge

Implication

By offering a ‘nudge’ to individuals you can help them make a preferred choice. Having a default option on a web donation from helps encourage people to make that gift. Puttin ga donation box in a location where it is easily seen and easy to access improves gift levels.

Decision Heuristic

Progressing

Implication

We like to see progress towards a result and to contribute to it. So showing you are close to a fundraising target will encourage others to help complete it. We also like ‘stories’ and case studies that lead to a satisfying and clear result.

Decision Heuristic

Normalising

Implication

Making something appear like the normal reaction can encourage others. In a crowd we will tend to adopt the behaviours of the majority. Showing that others are contributing to an appeal by, for example, listing their gifts on an online page helps normalise giving and the gift level .

Decision Heuristic

Empathising

Implication

We like to identify with the people we are being asked to help. And we like them to be individuals. Fundraisers can gain more support in an appeal by highlighting the situation of a specific person – help Ahmed to join the youth theatre – than by presenting a ‘crowd’ – help young people.

Decision Heuristic

Loss aversion

Implication

We have a greater preference for avoiding losses than to making gains. Someone who loses £100 in a transaction will experience a decrease in satisfaction greater than they will secure from a £100 gain. Visions are nice. BUT the threat of theatre closure is more likely to drive support.

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