Affective computing, also known as emotion AI, combines insights from computer science, psychology and cognitive science to bring machines into the realm of human emotion. Affective computing enables systems that can both recognize human emotion (for instance, by analyzing eye movements, facial expressions and tone of voice) and convincingly simulate it when interacting with users.
Human augmentation technologies are making these capabilities highly customizable at scale. Already, sensors embedded in smartphones, wearables and scores of other objects are enabling behavioral change in real-time, real-world conditions. In the not-too-distant future, augmented and virtual reality could shape behaviors by customizing interactions in ways far beyond what is possible in the physical world. Imagine a salesperson avatar that can simultaneously maintain eye contact with hundreds of customers while modifying her accent, choice of words and tone of voice based on data about each customer’s preferences.
Using behavioral economy capabilities
The tools and principles of the behavioral economy are particularly relevant at this point in time, as companies and governments seek to better understand the changing behaviors and preferences of their stakeholders. Here are three examples of ways in which these capabilities can be deployed to meet this challenge:
1. Becoming a listening organization
A key finding of the EY Future Consumer Index survey is that companies need to become listening organizations that use data analytics and AI to better understand consumers’ changing needs to adapt products and services accordingly. Behavioral economy tools can help companies strengthen their listening muscles. For instance, behavioral economics can help elucidate counterintuitive patterns in customer behavior, which allows companies and governments to better predict behavioral shifts and account for their psychological underpinnings. The sensors embedded in human augmentation technologies allow organizations to listen in real-time, real-world conditions. Meanwhile, applications of affective computing allow for an entirely different kind of listening: recognizing and modulating users’ emotional states in real time. This is tremendously relevant in the wake of the pandemic, which has fueled a silent epidemic of stress and mental health issues.
2. Nudging consumer behavior
The real power of behavioral economy tools is not just in their ability to listen to consumers, but also in their potential for influencing and shaping behavior. What pricing strategies would most appeal to consumers at a time when majorities across multiple countries have become more cost conscious? As some countries move toward recovery from the pandemic, how might messaging and emotional cues appeal to individuals who are proceeding with a sustained sense of anxiety? How might the design of physical spaces reassure people who are prioritizing health concerns like never before? Behavioral economics and affective computing can provide answers to these questions and more.
3. Maintaining social cohesion and trust
While social cohesion and trust had been under strain across much of the world well before the pandemic, COVID-19 has only amplified these trends. The pandemic has widened the economic divide by exacting a disproportionate toll on the economically disadvantaged. Disinformation and conspiracy theories have run rampant and increased social distrust. The EY Connected Citizen survey finds that 32% of citizens across the world fear that technology will make them feel less connected to their community. Behavioral economics helps explain the psychology behind these trends, pointing the way to actionable solutions. The work of social psychologist Jonathan Haidt, for instance, highlights how tribalism influences our perception of information across a swath of issues. Behavioral economics explains why technology — in particular, the algorithms and design of social media platforms — has had such a deleterious impact on trust and cohesion. For leaders in government — and, increasingly, in business as well — such behavioral insights provide the basis for understanding the drivers of polarization and the foundation for steps to remedy the problem.