The thesis of “Nudge” is that it is possible to design choices to make it easy to do what is good for us and just a tiny bit harder to do what is bad for us, thus government should create policies that “nudge” us in the right direction.
“Nudge” begins with an illustration of a school cafeteria manager who discovers how students can be influenced toward healthy nutrition by how cafeteria offerings are placed, arranged, and displayed: “good” food at eye level, “bad” food at the back of a display, placing it where it is hard to reach, or toward the end of a line.
The authors term such a person a “choice architect.” They go on to discuss the emerging science of choice and the Reflective Mind vs. the Automatic Mind.
The classic example is where the default option for new employees is to be enrolled in the company 401(k) plan. It is not mandatory, you can opt out, but if you do nothing, you are enrolled. A variant on this is called pre-choice: raises are automatically rolled into the 401(k) plan. You can always choose differently when the time comes but most people don’t.
Thaler calls this “libertarian paternalism,” defined as the “gentle nudging of the citizenry in the right direction” and argues: “It is often possible to design policies, in both the public and private sector, that make people better off — as judged by themselves — without coercion. We oppose bans; instead, we favor nudges. Since it is often impossible for private and public institutions to avoid picking some option as the default, why not pick one that is helpful?”
This is called “choice architecture” and similar to physical architecture, there are no “neutral” choices. Among other things the evolving science of choice takes advantage of the tendency of people to procrastinate, make decisions by indecision, and to take the path of least resistance. Indeed, it can be argued that humans are not very good decision-makers (see Predictably Irrational, The Drunkard’s Walk, and Sway) and are “riddled with little psychological tics in our decision-making processes. We buy things, then suffer remorse. We get confused by choices and often make no choice at all.”
The authors derived the term NUDGE:
iNcentives
Understand choice mapping
Defaults matter
Give Feedback
Expect Error
Structure complex choices
Another nudge is the act of disclosure: Imagine if the most prominent thing you saw when you opened your monthly credit card bill was the dollar amount of interest you paid year to date and the interest rate you were paying. How would your behavior change? Or what if instead of the EPA milage, new car stickers showed the estimated cost in dollars of 5 years of driving? This touches upon another aspect of nudge philosophy and good choice architecture: provide timely and relevant feedback about choices and outcome; real time, useful feedback.
Good choice architecture also “expects error and develops systems to prevent, detect, and minimize it. For example, pill cases and inhalers with dosage counters are simple and valuable ways to reduce the frequent errors people make in remembering medication. Psychological research provides direction as to what kinds of errors are to be expected when people are making decisions.”
The study of choices, what drives them and how to help people make better decisions can powerfully help people live better lives. It also can map the road to subtle totalitarianism.
NOTE: This blog owes much to amazon.com reviews by Robert D. Steele, D. Stuart, and Alan Schwartz.
I was discussing this very issue with my brother last night, in regards to the local C.H.O.I.C.E.S program. He was proposing a similar “nudge” for the estimated 13,000 individuals who could be on the program but haven’t signed up yet. My feelings on this are mixed to say the least.
If a school lunch room wants to arrange their foods in such a way to make the healthier choice more likely then I say “why not?”
However, I’m not sure I like government dictating “nudges” in private business; such as making McDonald’s post caloric content on their menus. If customers want this (and vote with their dollars) then McDonald’s will make the change voluntarily, or see its market share shrink and customers flee to Wendy’s or others that listen to what they want.
I agree; nudging is a powerful force and should be used by business and government to great effect. We should be vigilant though and keep an eye cocked towards the potential “subtle totalitarianism,” indeed.
I for one would love a world where the first choice presented to me was the best choice for me. 99% of my decisions are often based on convenience and ease of attainment. For example, it’s easier to spend 5 minutes in a drive-thru lane at a fast food restaurant than to get out of my car and walk around the grocery store, stand in a check out line, drive home, prepare dinner, wash pots and pans, etc… (now try that with a two-year old by your side). Credit Cards are another culprit. Now, I’m not saying that each person should not be responsible for their own actions, but it absolutely drives me crazy when I am at a department store check out line and am asked if I’d like to “Save 10%” by opening a charge account? How many young students fall for this line of crap and then end up with 10+ cards, only to find out when it’s too late how their credit has been impacted. Department store employees are often given incentives and at times even required to open a minimum of these lines of credit. On another note, how often are things like “FREE BEER” used to attract the student population to events? This is definitely not a nudge in the right direction.
So how effective is a nudge in the right direction when the wrong direction (and often more glamorous path) is still in plain sight? Instant gratification is such a huge driving force that I think people will still go out of their way to do what’s “bad” and considerably more pleasurable, than what is “good” and more disciplined. While I love the example of the automatic enrollment in a company’s 401K, I still think that a person who has not come to terms with the importance of saving will immediately make the effort to un-enroll once they realize how much of their money will not be available for immediate use each paycheck. Bottom line, you can lead a horse to water, but you can’t make him drink. I think rather than just making the opportunity to make better choices easier, it would be beneficial to make the opportunity for bad choices more difficult, because if both are within reach, then it still comes down to the amount of discipline within each individual to make the better choice. And that is not something that the government or any business can impose. It begins at home, and is enhanced by the value system we internalize.
If life in this world was not driven so much by the desire to attain worldly possessions and pleasures, then I think we would find that the best choices would already be a part of our default programming.
[Matthew 6:19-21] “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.”
[...] dining is an example of “nudging” (see blog post and the book, “Nudge” ), whereby relatively small changes in environment or context can create meaningful behavioral [...]