DESIGNING WITH BEHAVIOURAL ECONOMIC PRINCIPLES

Behavioral economics combines insights from psychology and economics to explain human decision-making. Understanding these principles can help designers create more engaging, intuitive, and effective products.  Psychologist Daniel Kahneman, Ph.D., was awarded the Nobel Memorial Prize in Economic Sciences for his groundbreaking work in this field of applying psychological insights to economic theory. He identified human’s two decision making systems, i.e., system one and system two. System one is fast, unconscious, and automatic. System two is slow, conscious, and effortful.  Turns out we use system one 98 percent of the time sometimes leading to unfavourable outcomes.

As designers designing for larger societal challenges or pixel-perfect design systems within a screen, we have to consider all aspects of human's decision making, rational and irrational, fast and slow, system 1 and 2 to influence a positive outcome such as changing behaviours for a more sustainable future or designing to guide a decision.

Behaviour Economic principles bring to surface how humans make decisions. These principles can help us nudge users when faced with decisions to guide positive outcomes but these are also used to manipulate users into making decisions that benefit the company, often at the user's expense.

​Here are five key behavioural economic principles and their respective dark UX patterns seen in the world today.
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1. Implementation Intentions: Bridging Intentions and Actions

Principle: People are more likely to achieve goals if they form specific "if-then" plans, linking situational cues to actions. Behavioral scientist Peter Gollwitzer introduced this concept, writing, “People who form implementation intentions are significantly more likely to follow through on their goals.”

Application in Design: Encourage users to create actionable plans by embedding reminders, prompts, and triggers into their journey.

Example:

• Health Apps (MyFitnessPal): MyFitnessPal allows users to schedule reminders for logging meals or exercise, turning vague intentions into actionable behaviors.
• Task Management Tools (Todoist): By prompting users to set specific due dates and times for tasks, Todoist ensures that users are more likely to complete them.
  
  

Design Tip: Incorporate tools like scheduling, notifications, or templates to help users plan their actions concretely. For example, instead of “Exercise more,” prompt users to set a goal like “Go for a 30-minute walk every morning.”

Dark pattern for Implementation intentions

Dark Pattern: Exploiting Specific Action Prompts for Marketing

How It Works: Platforms encourage users to commit to actions that primarily serve business goals (e.g., increasing app visibility or activity metrics) under the guise of helping users meet their personal goals.

Example:

• Social Media Platforms (Instagram): Prompts like “Set a goal to post 3 times this week” seem user-focused but are designed to increase platform engagement and visibility.
  
  

Behavioral Principle Exploited:
The platform reframes its marketing agenda as user-driven goals, exploiting users’ natural tendency to make specific plans and follow through.

2. Anchoring: Setting Reference Points

Principle: People rely heavily on the first piece of information (the "anchor") they encounter when making decisions. “ Different starting points yield different estimates, which are biased toward the initial values ” (Tversky & Kahneman, 1974). This bias is powerful in shaping users'.

Application in Design: Use anchoring to guide users' perceptions of value. This can be achieved by presenting a high reference point (e.g., premium pricing) to make other options seem more appealing.
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Example:

• E-commerce (Amazon): When shopping on Amazon, a product’s "original price" is often shown as a strikethrough next to the "discounted price." The higher original price anchors users’ expectations, making the discounted price seem like a better deal.
• Subscription Plans (Spotify): Spotify displays its premium plans side by side, with the most expensive plan first. This makes the mid-tier plan appear more reasonable and appealing.
  
  

Design Tip: In pricing tables or menus, always highlight the "best value" option after establishing a higher-priced anchor.

​Dark UX pattern of Anchoring: Inflating Perceived Value

Dark Pattern: Fake Discounts

How It Works: Retailers display inflated original prices next to a "discounted" price to anchor users into thinking they’re getting a great deal, even when the original price was never genuine.

Example: E-commerce platforms sometimes show strikethrough prices with fabricated discounts to make a product seem more affordable. For instance, a "50% off" sale might actually be priced at the regular market rate.
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Behavioral Principle Exploited: Anchoring leads users to perceive the "discounted" price as a bargain compared to the unrealistic higher price.

3. Loss Aversion: Avoiding Losses

​Principle: People feel the pain of losing something more intensely than the pleasure of gaining something equivalent.
“Losses loom larger than gains” (Kahneman & Tversky, 1979).

Application in Design: Create a sense of urgency or highlight potential losses to drive user action.
Example:

• Limited-Time Offers (Booking.com): Booking.com uses loss aversion by showing messages like “Only 2 rooms left at this price!” or “Someone just booked this!” These cues make users feel they might miss out if they don’t act quickly.
• Free Trials (Netflix): Netflix emphasizes that you’ll lose access to its vast library if you don’t subscribe after the free trial.
  
  

Design Tip: Use countdown timers, stock availability, or personalised reminders to trigger users' fear of missing out (FOMO).

​Dark UX pattern of Loss Aversion: Fear or Missing Out (FOMO)
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​Dark Pattern: Scarcity and Urgency

How It Works: Sites display messages like "Only 1 left in stock!" or "Offer ends in 5 minutes!" to create a sense of urgency, pushing users to make impulsive purchases.

Example: Travel booking platforms like Expedia or Booking.com frequently use scarcity indicators to make users feel they’ll lose out on deals if they delay.
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Behavioral Principle Exploited: Loss aversion pressures users to act quickly to avoid losing an opportunity, even if the urgency is artificially created.

4. The Endowment Effect: Valuing What You Own

​Principle: People assign more value to things they already own than to things they do not. “People tend to overvalue their possessions relative to their willingness to acquire the same item.”

​Application in Design: Make users feel ownership before they commit, increasing their likelihood of conversion.

Example:

• Customization (Nike By You): Nike allows users to design their own shoes online. Once users invest effort into creating their unique product, they are more likely to make a purchase.
• Freemium Models (Dropbox): Free storage lets users integrate Dropbox into their routines, increasing their likelihood of upgrading.

Design Tip: Let users "experience" ownership through personalisation, free trials, or interactive previews.

​Dark UX pattern of The Endowment Effect: Perceived Ownership
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​Dark Pattern: Forced Continuity

How It Works: Users are offered a free trial that requires credit card information. They often forget to cancel, and the service auto-renews, charging them without explicit consent.

Example: Many streaming platforms, like some subscription services, capitalize on users’ inertia and attachment to the service they’ve started using.

​Behavioral Principle Exploited: The endowment effect makes users more reluctant to cancel a service they’ve begun integrating into their routine, even when it’s not valuable.

5. Social Proof: Following the Crowd

Principle: People look to others' behaviour to determine their own, especially in uncertain situations. Robert Cialdini discusses this extensively in Influence: The Psychology of Persuasion, stating, “We view a behavior as more correct in a given situation to the degree that we see others performing it.”

Application in Design: Show evidence that others are using or benefiting from your product to build trust and drive engagement.

Example:

• User Reviews (Yelp): Yelp prominently displays user reviews and ratings, encouraging others to visit highly-rated businesses.
• Real-Time Data (Duolingo): Displaying active users or streak counts fosters a sense of community and credibility.

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Design Tip: Incorporate testimonials, ratings, user counters, or "popular choices" tags to boost social proof.

​Dark UX pattern of Social Proof: Manipulated Popularity

Dark Pattern: Fake Testimonials or Reviews

How It Works: Companies fabricate reviews or manipulate ratings to create a false sense of popularity and reliability.

Example: Some online marketplaces feature reviews that are either paid for or created by bots to inflate a product’s reputation.
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Behavioural Principle Exploited: Social proof leads users to trust a product based on perceived popularity or positive feedback, even when the feedback isn’t genuine.

6. Choice Overload: Simplifying Decisions

Principle: Too many options can overwhelm users, leading to decision paralysis or dissatisfaction.

Application in Design: Limit the number of choices presented to users or guide them toward the best option.
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Example:

• Curated Playlists (Spotify): Spotify’s curated daily playlists reduce the effort users need to find music they’ll like.
• Tiered Pricing (Apple iCloud): Apple’s iCloud offers only three or four storage options, avoiding excessive choice and simplifying the decision-making process.
  
  

Design Tip: Use filters, categories, or default recommendations to streamline the user experience and make choices easier.

​Dark UX pattern of Choice Overload: Paralysis by Design
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Dark Pattern: Overwhelming Options to Push Defaults

How It Works: Presenting too many complex options subtly nudges users to select the pre-checked default, which is often less favourable for them. Forms have pre-checked boxes that opt users into additional charges, subscriptions, or sharing personal data. Users who don’t read carefully end up agreeing unintentionally.

Example: Subscription cancellations that require navigating through multiple confusing options, like specifying detailed reasons for canceling or offering alternative plans at every step. Airlines often pre-check options like travel insurance or seat upgrades, adding extra costs that users might overlook.
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Behavioral Principle Exploited: Choice overload overwhelms users, making them more likely to accept the default or continue with the current option. The default effect exploits users' tendency to stick with preselected choices rather than actively opting out.

Integrating behavioral economic principles into design can significantly enhance user experience and drive desired outcomes. By leveraging anchoring, loss aversion, the endowment effect, social proof, and choice overload, designers can craft solutions that resonate deeply with users' psychological tendencies. Incorporating these strategies thoughtfully can lead to better engagement, higher conversions, and more satisfied users. Whether you’re designing an app, website, or product, understanding human behavior is the key to creating impactful designs.

Drop us a message to share any examples of projects where you would've used these principles or ask us about how we've used these principles to guide people to switching to solar for an electricity company, or nudged employees to reduce waste and recycling contamination for a corporate office.