Behavioral economics is an attractive and exploration-worthy field, because it proves that our decisions can be predicted and changed, based on the existing information. So, shall we nudge people to make better decisions?

It is widely known that people have destructive tendencies, personal (smoking, obesity, drugs) or collective (energy waste, criminality and road safety).

Categorizing Nudges for personal and collective decisions

Nudges are categorized in pro-social nudges and pro-self nudges.

Prosocial nudges are non-coercive behavioral tactics which encourage people to make better decisions for the collective well-being, while pro-self nudges refer to the choice architecture that aspires to direct the person to its own well-being.

The birth of a nudge

In their “Nudge” book, Thaler and Sunstein talk about a 5-step procedure to create an effective nudge:

1. Understanding the way of choice presentation

The nudge creators should know that people usually have a default option in their minds. It’s their job to search information that will modify this default option.

2. Trial and Error

As people, we are designed to learn through our mistakes. This type of learning should be included in a nudge, so people have immediate knowledge of their mistakes.

3. Guidance

After trial and error, it is important to find an effective way so people can learn from the consequences of their actions and can direct themselves to the right action.

4. Cognitive Maps

The creators of possible nudges should be aware of the way people think and the possible courses of actions (cognitive map).  In every nudge, there should be research about the way people think, for the sake of changing it.

5. Social Imitation

The nudge creators should take into consideration our internal tendency to follow people similar to us. So, it would be good to think of possibilities, where people can show others the right behavior.

Conclusions

Based on the aforementioned, nudges seem to be a very promising solution for personal and collective problems. Their design should be precise and targeted.

Do you have in mind any personal or public tactics that match those 5 criteria? Share your knowledge with us!

 

Christos Panousis

Researcher and Writer for Nudge Unit Greece

~Explaining Behavioral Economics Simply~

References

Grüne-Yanoff, T., & Hertwig, R. (2016). Nudge Versus Boost: How Coherent are Policy and Theory? Minds and Machines, 26(1–2), 149–183. doi.org/10.1007/s11023-015-9367-9

Hagman, W., Andersson, D., Västfjäll, D., & Tinghög, G. (2015). Public Views on Policies Involving Nudges. Review of Philosophy and Psychology, 4, 439–453. doi.org/10.1007/s13164-015-0263-2

John, P., Smith, G., & Stoker, G. (2009). Nudge nudge, think think: Two strategies for changing civic behaviour. Political Quarterly, 80(3), 361–370. doi.org/10.1111/j.1467-923X.2009.02001.x

Richard Η. Thaler and Cass R. Sustein (2008), ‘Nudge: Improving Decisions about Health, Wealth and Happiness’. www.amazon.com/Nudge-Improving-Decisions-Health-Happiness/dp/014311526X