World Development Report 2015: Mind, Society, and Behavior

WORLD DEVELOPMENT REPORT 2015: A WORLD BANK GROUP FLAGSHIP REPORT MIND, SOCIETY, AND BEHAVIOR JULJUUo0000U ECONOMISTS TYPICALLY ASSUME PEOPLE MAKE RATIONAL CHOICES CAREFULLY WEIGH CHOICES MAKE DECISIONS INDIVIDUALLY CONSIDER ALL READILY AVAILABLE INFORMATION THESE ASSUMPTIONS ARE SOMETIMES NOT ENOUGH A richer understanding of how people actually think and behave shows that we: 08 Think Automatically Think Socially Think with Mental Models We tend to think fast and rely on mental shortcuts We cooperate, as long as others do the same, and rely on social networks and norms We do not invent new concepts, but rather use mental models drawn from society and a shared history FOR EXAMPLE: FOR EXAMPLE: FOR EXAMPLE: IDENTIFYING A CHEAP LOAN IN MEXICO SELLING FEMALE CONDOMS IN ZAMBIA SUCCUMBING TO STEREOTYPES IN INDIA Simplified information led to a dramatic increase in Public recognition was more important than money to boost condom sales In an experiment, lower caste boys solved fewer puzzles when caste identity was emphasized picking the cheapest loan HIGH CASTE I LOW CASTE 15 68% 12 PROVIDER INCENTIVE ..... 39% CASTE NOT REVEALED COMPLICATED SIMPLE NO FINANCIAL RECOGNITION REVEALED TO BROCHURES SUMMARY SHEET REWARD REWARD MIXED GROUP LEARN MORE: PG. 16 LEARN MORE: PG. 133 LEARN MORE: PG. 12 POLICIES WITH A RICHER VIEW OF HUMAN BEHAVIOR A fuller understanding of human behavior makes for better policy SOCIAL NETWORKS IN INDIA, defaults on group microfinance loans were 3 times less likely when borrowers met on a weekly (compared to monthly) basis TIMING FUNDS REMINDERS IN COLOMBIA, cash transfers were disbursed when school enrollment decisions were IN KENYA, weekly text messages improved rate WITH REMINDER Oof HIV drug adherence from 40% up to 53% 53% -40% being made. Future enrollments went up, and current attendance stayed the same. PRESCRIPTION FOR FULL REPORT, VISIT worldbank.org/wdr2015 WORLD BANK GROUP Source: World Development Report 2015: Mind, Society and Behavior PERCENT WHO CHOSE CORRECTLY NUMBER OF CONDOMS SOLD NUMBER OF MAZES SOLVED S241