Nudge theory is a concept in behavioral economics, political theory, and behavioral sciences that proposes positive reinforcement and indirect suggestions as ways to influence the behavior and decision-making of groups or individuals. Nudging contrasts with other ways to achieve compliance, such as education, legislation or enforcement.
The nudge concept was popularized in the 2008 book Nudge: Improving Decisions About Health, Wealth, and Happiness, by behavioral economist Richard Thaler and legal scholar Cass Sunstein, two American scholars at the University of Chicago. It has influenced British and American politicians. Several nudge units exist around the world at the national level (UK, Germany, Japan, and others) as well as at the international level (e.g. World Bank, UN, and the European Commission). It is disputed whether “nudge theory” is a recent novel development in behavioral economics or merely a new term for one of many methods for influencing behavior, investigated in the science of behavior analysis.
The first formulation of the term nudge and associated principles was developed in cybernetics by James Wilk before 1995 and described by Brunel University academic D. J. Stewart as “the art of the nudge” (sometimes referred to as micronudges). It also drew on methodological influences from clinical psychotherapy tracing back to Gregory Bateson, including contributions from Milton Erickson, Watzlawick, Weakland and Fisch, and Bill O’Hanlon. In this variant, the nudge is a microtargeted design geared towards a specific group of people, irrespective of the scale of intended intervention.
In 2008, Richard Thaler and Cass Sunstein’s book Nudge: Improving Decisions About Health, Wealth, and Happiness brought nudge theory to prominence. The authors refer to the influencing of behaviour without coercion as libertarian paternalism and the influencers as choice architects.
|Instructing a small child to tidy his/her room.||Playing a ‘room-tidying’ game with the child.|
|Erecting signs saying ‘no littering’ and warning of fines.||Improving the availability and visibility of litter bins.|
|Joining a gym.||Using the stairs.|
|Counting calories.||Smaller plate.|
|Weekly food shop budgeting.||Use a basket instead of a trolley.|
A nudge makes it more likely that an individual will make a particular choice, or behave in a particular way, by altering the environment so that automatic cognitive processes are triggered to favour the desired outcome.
An individual’s behaviour is not always in alignment with their intentions (a discrepancy known as a value-action gap). It is common knowledge that humans are not fully rational beings; that is, people will often do something that is not in their own self-interest, even when they are aware that their actions are not in their best interest. As an example, when hungry, people who diet often underestimate their ability to lose weight, and their intentions to eat healthy can be temporarily weakened until they are satiated.
Nobel Laureate Daniel Kahneman describes two distinct systems for processing information as to why people sometimes act against their own self-interest: System 1 is fast, automatic, and highly susceptible to environmental influences; System 2 processing is slow, reflective, and takes into account explicit goals and intentions. When situations are overly complex or overwhelming for an individual’s cognitive capacity, or when an individual is faced with time-constraints or other pressures, System 1 processing takes over decision-making. System 1 processing relies on various judgmental heuristics to make decisions, resulting in faster decisions. Unfortunately, this can also lead to suboptimal decisions. In fact, Thaler and Sunstein trace maladaptive behaviour to situations in which System 1 processing overrides an individual’s explicit values and goals. It is well documented that habitual behaviour is resistant to change without a disruption to the environmental cues that trigger that behaviour.
Types of nudges
Nudges are small changes in the environment that are easy and inexpensive to implement. Several different techniques exist for nudging, including defaults, social-proof heuristics, and increasing the salience of the desired option.
A default option is the option that an individual automatically receives if they do nothing. People are more likely to choose a particular option if it is the default option. For example, Pichert & Katsikopoulos (2008) found that a greater number of consumers chose the renewable energy option for electricity when it was offered as the default option.
A social-proof heuristic refers to the tendency for individuals to look at the behavior of other people to help guide their own behavior. Studies have found some success in using social-proof heuristics to nudge individuals to make healthier food choices.
When an individual’s attention is drawn towards a particular option, that option will become more salient to the individual and they will be more likely to choose that option. As an example, in snack shops at train stations in the Netherlands, consumers purchased more fruit and healthy snack options when they were relocated next to the cash register. Since then, other similar studies have been made regarding the placement of healthier food options close to the checkout counter and the effect on the consuming behavior of the customers and this is now considered an effective and well-accepted nudge.