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A quick guide to behavioural economics and 7 ways to apply it to learning design

June 7, 2016

by Tess Robinson, Director, LAS

Traditional economics is based on the assumption that humans are rational beings, that we evaluate our situation in a logical way, making decisions based on cost-behavioural economicsbenefit analyses.  Behavioural economics turns this on its head and suggests that, actually, we are myopic creatures whose choices are loaded with emotions and cognitive bias. We make mistakes too – lots of them!

Behavioural economics brings in ideas from psychology, neuroscience, sociology and microeconomics to explain the way that decisions are made. Although primarily focussed on  economic decisions, this way of thinking has interesting implications for learning design.

Behavioural economics, as the name suggests, is all about behaviour and behaviour change – the Holy Grail for learning designers. Recognising that humans won’t necessarily do what you want them to, or even do what they say they’re going to do, is the first step to understanding behaviour and ultimately being able to change and improve it. The context that people make decisions in also has a bearing on the choices they make, as does the influence of people around them.

So what lessons can we take from behavioural economics when designing digital learning?

  1. Context is important – learners make decisions comparatively and relatively, so it is vital that the learning is put into context. This might be via a business simulation or a realistic scenario.
  2. Human decision making is not perfect and people often need help in making decisions in order to overcome bias. The learning material should be presented in such a way that learners are gently nudged into making the right choices without making it so easy that it’s not a challenge and they get bored or feel patronised.
  3. Don’t give learner’s too many options. If you give people five options they will invariably go for the middle one. We’re programmed to avoid extremes.
  4. People tend to prefer instant gratification over future benefits. Immediate feedback, badges, points and other gamification tools can provide this.
  5. We use mental short-cuts (heuristics) to solve problems. These come from things like hindsight, recency, availability and representativeness. We are more likely to remember vivid examples, so learning with impact that tells a good story is more likely to stick.
  6. People like to conform and cluster together. Including some form of social learning will play well to these traits and encourage participation.
  7. Everyone makes mistakes and imperfect choices. Embrace this in your learning design and give people the chance to repeat activities until they get the right answers.
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