Figuring out the future and the now

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The Myth of Signing at the Top


About a decade ago, a compelling idea percolated up through academia and into industry – including the insurance industry:

Signing forms at the top, rather than the bottom, could boost honesty.

Researchers Francesco Gino and Dan Ariely championed this concept, which quickly gained traction. The logic seemed sound – remind people to be truthful before they fill out a form, and they’ll be more honest throughout.

The Hard Fall of a Once Buoyant Theory
This widely-adopted practice has crumbled under scrutiny. A practical replication attempt by one of the other authors (at an online insurer!) failed to reproduce the results. Large scale laboratory testing failed to replicate the result. Data Colada’s (https://datacolada.org/) investigations uncovered clear evidence of data tampering, discrediting the original studies. Both Gino and Ariely now face accusations of fraud, not just in this research but in other areas as well. (Ariely’s book “Predictably Irrational” has long been one of my favourites – I’m still processing what to feel about this.)

In the last year I’ve heard two separate insurance executives citing this research as a method for managing fraud and non-disclosure in underwriting processes. It’s hard to stay up to date; the media tends to popularise the fun initial conclusion and TED talk more than the debunking.

This is just part of a broader challenge in science: replicability. Many behavioral science findings, once thought robust, have failed to stand up to replication attempts, casting doubt on their validity and real-world applicability.

Other Behavioral Concepts in Insurance: A Mixed Bag
While the top-of-form signing theory has been debunked, other behavioral science concepts remain relevant to insurance, though with varying degrees of reliability:



Nudge Theory

  • Concept: Small changes in choice presentation can significantly influence decisions.
  • Application: Using social comparison feedback (e.g., “80% of homeowners in your area have flood insurance”) to encourage consideration of additional coverage. Also, implementing gamification elements in health insurance apps to promote healthier lifestyles, potentially reducing health-related claims.
  • Replicability: Consistently strong results across various domains, making it a robust finding.


The Watching Eyes Effect

  • Concept: Displaying images of eyes or a face can encourage honest behavior.
  • Application: Used in various settings, including online insurance, to promote truthfulness.
  • Replicability: Mixed results, with effectiveness varying by context.


Default Options

  • Concept: Setting beneficial default choices (e.g., higher insurance coverage) can lead to better outcomes.
  • Application: Widely implemented in insurance and savings products.
  • Replicability: Generally reliable, though effect sizes can vary.


More on this in the excellent Freakonomics podcast episode 572


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