On Oct. 9, Richard Thaler of the University of Chicago won the Nobel Prize for his extraordinary, world-transforming work in behavioral economics. In its press release, the Royal Swedish Academy of Sciences emphasized that Thaler demonstrated how nudging – or influencing people while fully maintaining freedom of choice – “may help people exercise better self-control when saving for a pension, as well in other contexts.”
In terms of Thaler’s work on what human beings are actually like, that’s the tip of the iceberg – but it’s a good place to start.
In 2008, Thaler and I wrote “Nudge,” emphasizing the massive potential of seemingly small interventions that steer people in particular directions but that also allow them to go their own way. That’s how a GPS nudges. Other common nudges include a calorie label, a reminder that you have a doctor’s appointment next week, a warning that a product contains peanuts and so-called default rules, such as automatically shifting a small percentage of your salary to a pension program unless you opt out.
Some skeptics have raised concerns that nudging can be akin to manipulation. My research shows most people disagree – and welcome nudges that help them live better lives.
AP Photo/Evan Vucci
A world of nudges
In the United States, the United Kingdom, Canada, the Netherlands and many other nations, officials have used nudges to implement public policies. Examples include disclosing information about the ingredients of food, providing fuel economy labels on cars, offering warnings about cigarettes and distracted driving, automatically enrolling people in pension plans, and requiring disclosures about mortgage payments and credit card usage. With an emphasis on poverty and development, the World Bank devoted its entire 2015 report to behaviorally informed tools, with a particular focus on nudging. Examples cited include setting defaults that encourage saving and texting reminders to help people to pay bills on time.
The reason for the mounting interest is clear: If governments can achieve policy goals with tools that do not impose high costs – while preserving freedom of choice – they will take those tools seriously.
But governments also care what citizens actually think. Do they approve of nudges?
My research, analyzed in my book, “The Ethics of Influence,” supports a single and perhaps surprising conclusion: In many nations, strong majorities favor nudges – certainly of the kind that have been seriously proposed, or acted on, by actual institutions in recent years. My surveys show that people like mandatory calorie labels. They favor graphic health warnings for cigarettes. They approve of automatic enrollment in savings plans. In general, they like nudges that promote healthy and safety, and have no ethical complaints.