The Smarter Screen: Surprising Ways to Influence and Improve Online Behavior

Research Retrieved: August, 2016
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Issue


The amount of time people spend in front of a screen. People can do nearly everything online: doing groceries, finding a new partner, watching movies and TV series, sourcing information on pensions and investing online.

On the positive side, people can be reached wherever their mobile phone is. Information search has never been so easy for the average Joe. On the negative side, the information load also has increased dramatically, leading to less attention to important, life-changing decisions (such as saving and investing for retirement). So, how can websites and apps be designed in such a way that they capture people’s attention enabling them to make choices in a more effective and well-informed way?

In his recently published book, Shlomo Benartzi, Professor at UCLA and the author of “Save More Tomorrow” (with contributions of American blogger and writer Jonah Lehrer) collects and comments on several trials that study online decision-making. By using real life examples such as healthcare.gov, the amazon website or surge prices of Uber as well as experiments and quizzes the reader can participate in, Benartzi succeeds in making this line of research vivid and relevant for everyone.

Key Findings


In the first chapter, Benartzi and Lehrer point out that the attention span of people is generally limited, even more so online. Like a water hose pointed at someone, the internet provides a load of information, but most of it is spilled because people cannot process the information. Chapter 2 follows up on this by describing the consequences of speedy decision-making. As 55% of people spend less than 15 seconds reading an average article online, “function follows form”. People perceive “ugly” websites as less usable, the website’s company as less trustworthy. In chapter 3, the authors describe the “middle bias”: people tend to look more at the middle of the screen. Just as in supermarkets with the middle shelves, people are more likely to buy articles which are located in the middle of the screen.

From chapter 4 onwards, the book gives more practical advice on how to improve websites for better decision-making. The key issue is to provide the right amount of feedback. On the one hand, there is the positive example of Personal Capital’s mobile app. Giving feedback to users on all financial accounts resulted in decreased spending by 15.7% on a monthly basis. On the other hand, users may be subject to myopic loss aversion: too frequent feedback on short-term stock return fluctuations has been shown to decrease the intention to invest in stocks, even when the investment horizon is long-term. The mismatched feedback thus leads to portfolios that are too risk averse.

People used to read and think fast online. Benartzi’s prevention of rushed decision-making (chapter 5) is to decrease the simplicity of reading. By using an unusual font type- the mind slows down and the (possible investment) decisions are taken more carefully. Last, but not least, the authors examine choice architecture. Personalisation of videos and messages at the beginning of new periods (birthdays, first days of the month, Mondays) can help to catch people’s attention in order to make change in behaviour more likely. As attention is scarce, people should be helped to find the right information and to filter investment funds, health care plans and pension plans. The case is made that companies can refrain from the so-called “Three-Click Rule” on websites. According to this rule, people normally stop to browse a website when they cannot find what they look for within three clicks. However, as long as every click is useful in bringing the customer closer to a decision, the Three-Click Rule can be become less relevant. (Rob is this change accurate  in terms of the book’s content?)

Meaning for Practice


The pension sector is investing heavily in online communication with its participants. Given that pension participants most likely also have limited attention spans, the authors argue that visualisation and triggering of emotions may help people to grasp the importance of decisions. Showing pictures of possible future selves might for instance be a good way to make people think about their future retirement. Timing is an important concept as well: The “Fresh Start Effect” could call for communication at the beginning of new periods- be it around different life events (e.g. a new job, a marriage) or particular day of a month. When participants get feedback from the pension fund, for example on accrued benefits, Benartzi and Lehrer advise to also send an encouraging action plan with it: how can participants save more? What can they actually do with the money they have accrued?

In cases where participants have to make choices on their portfolio, for example, it might be worthwhile to utilise categorisations and filters to help participants find the right investment mix. Regret (Rob, is Experienced regret a technical term? If not, keep my edit) can also be decreased by giving the participant closure: during one experiment, a “rejected” sign displayed over the rejected choice improved participants’ satisfaction with their choices.

Last but not least, according to Benartzi, a clear structure of the website and not too much text can increase trust in the pension fund and participant satisfaction.

The Smarter Screen: Surprising Ways to Influence and Improve Online Behavior is a ‘must read’ for communications professionals who want to more effectively reach and educate pension plan participants.