The behavior economics of design

Choosing the best path despite ourselves


Two recent articles about the role of human nature in economic decision-making got my attention. The lessons of each could very easily be applied to the residential design process.

“The Advantages of Closing a Few Doors” by John Tierney in The New York Times (Feb. 26, 2008) expounds on our all-too-human desire to preserve our options and limit our exposure to perceived loss, despite the costs. The article references an MIT study conducted by Dr. Dan Ariely, professor of behavior economics, along with Jiwoong Shin, an economist now at Yale. In it students played a computer game that allotted them 100 computer clicks each. The game involved discovering which of three closed doors, when opened, would lead to maximum real cash rewards. To open a door a student could click on it. Each additional click on an open door earned a designated cash amount that varied from click to click. A student could switch between doors, but doing so expended a click without earnings and closed the door left behind. Tierney reveals that “the best strategy was to quickly check out the three rooms and settle in the one with the highest rewards.” Those with a more stream-lined approach did better than those going back and forth.

This is the case in the design process as well. Clients, who are decisive when provided with a few well-considered design options, help architects to more readily tailor designs to suit them. A less decisive client will opt to pursue one path for a while, back track, and then opt for another path, only to back track again. The time and energy expended by trying to pursue too many different design directions can add up.

In the computer game, when a new feature was incorporated that started to reduce the size of doors that hadn’t been opened for a while, students dashed back to click them open so they wouldn’t disappear. Even when a fee was charged to reopen disappearing doors, the students opened them. This decreased their earnings even further. In another iteration of the game the students were given a means, without expense, to bring back closed doors that had disappeared, yet still students wasted clicks to keep doors from disappearing. Dr. Ariely, also author of Predictably Irrational, explains in the article that, “Closing a door on an option is experienced as a loss, and people are willing to pay a price to avoid the emotion of loss.”

We see this in the design process when clients unearth an alternative that they rejected long before. They want to revisit it, to reexamine why they rejected it, and re-determine if they made the proper decision the first time around. They hate to see an option disappear, even if they had previously found it lacking and even if revisiting it expends further energy and expense.

Architects can help prevent some of the pitfalls of such uncertainty. Part of an architect’s challenge is to explore many divergent design avenues early in the design process, weed out those that are clearly deficient, and present a client with two to three worthy potential schematic solutions, so there are fewer, better options to choose from in the first place. While sharing select options with a client, an architect can build a case for the design scheme that she believes has the greatest merit. A good architect will help steer a client in the right direction. This is a form of a “nudge.”

It pertains to the other article about behavior economics that intrigued me. In “When Shove Comes to Push” by Drake Bennett in the Boston Globe, Bennett points out that, “The problem, as psychologists and economists are increasingly coming to agree, is that given total freedom of choice, people often fail to make the best decision for themselves.” He goes on to describe how social scientists are exploring the concept of “the ‘nudge’ – a model for how employers, friends, and even the government can structure people’s choices to push them in the right direction without restricting their freedom to go their own way.” One example of a “nudge” that he cites is when employers automatically enroll new hires in the company 401K plan. Employees have the freedom to opt out if they choose, but if they take no action, they start saving. Structuring the choice so saving is the default nudges employees to save.

According to Bennett, economist Richard Thaler and legal scholar Cass Sunstein, authors of Nudge: Improving Decisions About, Health, Wealth, and Happiness, call this type of structured nudging “choice architecture.” Bennett writes “Just as a well-designed building or a well-built tool can shape a person’s path or actions, a well-designed framework for making decisions, [Thaler and Sunstein] believe, can lead people to outcomes that will ultimately make them happier.”

Of course an architectural design nudge, like any other nudge, needn’t necessarily be heeded. This is why architects typically share more than one option, so clients can make their own decisions. We are all human after all. Still, architects can streamline clients’ residential design options and help nudge them toward the outcome likely to be in the clients' best interests.

by Katie Hutchison for the House Enthusiast