Acorns

PRODUCT

Acorns

Acorns is the first company to offer micro investing to the world. The proprietary financial engine allows customers to roundup spare change from everyday purchases and invest these sub-dollar amounts into a professionally managed portfolio of index funds. Simply connect any credit or debit card and a checking account, then spend money like you normally do to watch your portfolio grow with the market. It's easy to get started when you can invest any amount, any time with no commissions or minimums.

How Acorns changes Savings behaviors

Framing Effects

TACTICS

Framing Effects

A framing effect refers to changes in people's choices within a given set of options based on how the options are presented. This are typically associated with behavioral economics, as it violates utility theory's premise that people will choose according to a rational assessment of the outcome.The most common example of this is posing a question as a loss or a gain. In several instances, people have been found to choose differently based on whether a proposition is losing lives vs saving them, an X% of infection vs. a Y% chance of immunity, etc despite the options being mathetmatically identical between the two framings.

PAPERS

Temporal Reframing and Participation in a Savings Program: A Field Experiment

Reduce Friction or Barriers

TACTICS

Reduce Friction or Barriers

Reducing friction or barriers to performing a behavior is simply making it easier or removing things that may be preventing someone from doing something. This is a foundational technique in changing behavior, and part of the UK Behavioural Insights Team's 4-point approach ("Make it easy"). That said, knowing where the friction and barriers exist may not always be straightforward, and different groups of people may experience different barriers in different contexts. Note: It is possible to remove too much friction. In a well-popularized study, a travel booking site found that delays in loading the best deals or travel options actually increased conversions. Similarly, longer input forms in digital interactions sometimes outperform, as people may consider the results more personalized or experience greater cognitive dissonance after having invested so much time in exploring the service.

PAPERS

Temporal Reframing and Participation in a Savings Program: A Field Experiment

Automation

TACTICS

Automation

Automation refers to having another person, group, or technology system perform part or all of the intended behavior. A prominent example is Thaler & Bernartzi's Save More Tomorrow intervention, which invested a portion of employees' earnings into retirement funds automatically and even increased the contribution level to scale with pay raises. Other examples include automatically scheduling medical appointments so the patient needn't do it themselves and mailing healthy recipe ingredients to the person's home to reduce the burden of shopping.‍

PAPERS

Temporal Reframing and Participation in a Savings Program: A Field Experiment

Feedback

TACTICS

Feedback

Feedback entails providing qualitative or quantitative information about a behavior's performance or consequences. Performative information might include data on how a person's current diet tracks with nutrition recommendations or how their home power consumption compares with nearby households.Feedback on outcomes may include information about relative cancer risk based on current lifestyle factors or calculated net worth in 20 years based on the person's current savings rate and investment returns.‍

PAPERS

Temporal Reframing and Participation in a Savings Program: A Field Experiment

Rules of Thumb

TACTICS

Rules of Thumb

Rules of thumb refer to simplifation heuristics used in dealing with uncertainty, situations where tracking behaviors can be onerous, or areas where one-size-fits-all approaches may not be successful. They can be a useful tool to reduce the cognitive load of complying with a new behavior.For example, a person may find it easier to "eat out at restaurants only 4 times per month" rather than "limit monthly restaurant spending to $200." Similarly, avoiding eating certain types of foods, e.g. fried foods or high-calorie drinks, may be easier to recall and comply with than hitting a daily calorie goal.

PAPERS

Temporal Reframing and Participation in a Savings Program: A Field Experiment

Acorns changes these Savings behaviors

Savings