Nudge theory argues positive reinforcement and indirect suggestion is an effective way to influence the behavior and decision making of individuals or groups. Nudge theory was an idea first popularized by behavioral economist Richard Thaler and political scientist Cass Sunstein. However, the pair based much of their theory on heuristic research conducted by psychologists Daniel Kahneman and Amos Tversky in the 1970s.
- Understanding nudge theory
- Nudge theory compared to traditional approaches
- Differences between traditional (enforced) change and nudge theory
- Examples of nudge theory in action
- Does nudging really work?
- Key takeaways
- Connected Thinking Frameworks
Understanding nudge theory
In their subsequent 2008 book about health and wealth-based decision making, Thaler and Sunstein defined a nudge as:
“Any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not.”
Nudge theory was initially developed as an ethical construct designed to improve societies.
However, it is now used in any situation where an individual or group seeks to influence other individuals or groups.
Although it has obvious implications for consumer psychology, the theory can also be used in the parenting of a child or the management of global populations.
Nudge theory compared to traditional approaches
Central to nudge theory is the idea that one can influence the likelihood of an individual choosing one option over another by shaping their environment.
This environment is also known as choice architecture, which describes the various ways choices are presented and how they impact decision-making.
Here, the theory suggests an individual can be helped to think appropriately and make better decisions by being offered choices designed to enable those outcomes.
Although nudge theory is used to push an individual toward a desired outcome, they must maintain freedom of choice and feel in control of the decision-making process.
This style contrasts with more traditional means of instituting change, where instruction, enforcement, or even punishment are used to coerce people to do something against their will.
To that end, nudge theory is much more effective in altering behavior because it encourages positive choices over restricting undesirable behavior with sanctions.
What’s more, nudge theory respects that each individual is comprised of certain attitudes, knowledge, and capabilities that influence their behavior.
Differences between traditional (enforced) change and nudge theory
Consider the following differences between traditional (enforced) change and nudge theory techniques to put the above into perspective:
Enforced change is drastic, direct, and requires conscious, determined effort by the person or group subject to the change.
Nudge techniques are more simple for individuals to imagine doing because they are far less threatening and disruptive.
Enforced change is usually confrontational and provokes resistance.
Nudge techniques, on the other hand, are indirect, tactical, and less confrontational.
In some cases, they may be pleasurable or cooperative in nature.
Examples of nudge theory in action
One of the archetypal examples of nudge theory in action can be seen in Amsterdam’s Schiphol Airport. I
In the men’s bathrooms, an image of a housefly is displayed on each urinal to encourage travelers to improve their aim. This increases visual amenity and more importantly for the airport, reduces cleaning costs.
Other examples can be categorized according to three, broad nudge categories:
Or decisions an individual automatically makes if they do nothing.
For example, more consumers chose the renewable energy option for electricity when it was offered by default.
In the United Kingdom, organ donation rates increased simply by making individuals organ donors by default and requiring them to opt-out if desired.
Health and wellness
In the workplace, employers can use nudges to encourage employees to make healthier choices.
For example, providing healthy food options in the cafeteria, placing fruit baskets near the office entrance, or installing standing desks can all nudge employees towards healthier behaviors.
Governments and businesses can use nudges to encourage people to reduce their environmental impact.
For example, providing clear and concise information about the environmental benefits of recycling, or offering incentives for using reusable bags, can nudge people towards more sustainable behaviors.
Describing the tendency for individuals to make decisions based on the actions of those around them.
Governments have increased the number of citizens filing their taxes by sending reminders to laggards notifying them that most other people had already paid.
By highlighting the importance or prevalence of the desired option it is more likely to be chosen.
Various studies have proven that healthy food in supermarkets was more likely to be bought the nearer it was to the cash register.
Savings and investment
Financial institutions can use nudges to encourage customers to save and invest more money.
For example, framing savings as a “default” option, such as enrolling customers in automatic savings plans, can increase the likelihood that they will save money.
Law enforcement agencies can use nudges to promote public safety and reduce crime.
For example, placing mirrors in areas with high crime rates can nudge people towards self-awareness and deter potential criminals, or providing clear and visible signs and cues can nudge people towards safer behaviors.
Does nudging really work?
A recent research paper called “The effectiveness of nudging: A meta-analysis of choice architecture interventions across behavioral domains” found that, in many instances, nudging doesn’t prove to be effective.
And in many other cases, the cognitive psychologists involved with nudging fall themselves into biases when picking those nudged, from cherry-picking to attributing positive responses to nudges that, after all, have no statistical significance.
- Nudge theory argues positive reinforcement and indirect suggestion is an effective way to influence the behavior and decision making of individuals or groups. It was first popularised by behavioral economist Richard Thaler and political scientist Cass Sunstein.
- Nudge theory suggests decision-making can be influenced by considering choice architecture, or the various ways choices are presented to enable better outcomes for the individual.
- Nudge theory has limitless applications since it can be used by any entity wanting to influence another entity toward achieving a desired outcome. Broadly speaking, this process can be facilitated by three types of nudge categories: default options, social-proof heuristics, and salient options.
Connected Thinking Frameworks
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