Introduction
Nudges, as characterized by Thaler and Sunstein (2008), aim to improve personal and societal welfare by steering our decision-making through insights from psychology and behavioral economics, without limiting freedom of choice. Nudges are designed to be easy and cheap to avoid. The nudge program is now global, with many governments adopting behavioral insights units in order to inform new social policies. So what’s the problem? Such an influential program of work has invited much debate, and so to push this into new directions this three-part series aims to communicate cutting edge insights on nudge, specifically concerning its evidential support, its theoretical basis, and its ethical acceptability.
In this first part the aim is to lay the foundations of the nudge programme in order to set up the second part of this piece which takes the form of a Q and A. Three academics involved in the theory and practice of nudging describe their take on each of the three issues posed as questions to them. The final part of this piece then summarizes these answers and offers some ideas about how to move the nudge program ahead in ways that surmount some of the issues raised.
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Part One
Let’s assume that collectively we value actions that maximize our long term future goals. Let’s also assume that at an individual level we ultimately prefer to act in ways that are guided by this same goal. However, due the limits of our cognitive system (rendering it only boundedly rational, Simon, 1997) and various other psychological barriers, we don’t reliably act in our long term interests. Now imagine that a decision-support system exists that helps promote long term health, wealth and happiness. This would mean that as individuals we would be steered towards acting in ways that reliably sustain healthy eating habits, regular exercise, drinking in moderation, avoiding risky sexual activity, and saving adequately for our retirement. Such a system would also help ensure that, at an aggregate level, increasing certain choice behaviors will benefit society in the long run, such as registering to donate our organs, recycling our waste, and making energy use decisions that reduces our carbon footprint.
What social policy program would guide decision-making towards achieving long term future goals, while at the same time preserving personal autonomy over choice? The simple and elegant proposal made by Thaler and Sunstein (2008) is to directly manipulate the choice environment by making minor changes, so that the “better” option, which serves the individual and society’s long term interests, is made more accessible, more salient, and consequently easier to choose. The premise for targeting the choice environment (i.e. choice architecture) rather than focusing on the individual is that the psychology of decision-making and behavioral economics research suggests that explicitly telling people what is best for them is less effective than subtly cuing them through indirect means (Sunstein, 2013). Thus, constructing the choice environment in a way that leaves all options open but makes the “better” option most prominent, serves two purposes. It gets more people to choose the “better” option (whether through rational deliberation or not is up for debate), without taking a heavy handed approach (e.g., implementing bans, taxes), while also still maintaining the possibility of choosing from the remaining alternatives, if people so wish (Sunstein, 2016a). This program of choice environment construction has been coined nudge, the ethical framework that underpins it is liberal paternalism, and the people engaged in creating nudges are known as choice architects.
Of the different types of nudges that exist, the most well-known are automatic defaults, which have been implemented in a variety of settings (organ donation, pension schemes, health insurance, phone tariffs, energy providers) (see Jachimowicz, Duncan, & Weber, 2016, for a meta-analysis). In these applications, the options a decision-maker faces are not all equal, but one is pre-selected to be the default option – the one that the decision-maker will get if she does not make an active choice. For instance, in the case of pension schemes, an opt-out default system means that employers automatically enter their employees into a pension plan, and if employees wish to go it alone, they can opt-out of the scheme (Benartzi & Thaler, 2013). Nudges such as these provide policy makers with ways of reducing the various psychological barriers (e.g., problematic thoughts of one’s mortality, risk aversion, negative emotions, mental effort) that prevent people from actively selecting options that would benefit themselves and society in the long run (Dinner et al, 2011; Sunstein, 2014; Osman, 2016).
Behavioral change techniques (BCTs) such as nudges are designed with the view that they can promote better decision-making in ways that are simple, cost-effective, and ultimately preserve free-choice, because they are informed by insights from psychology and behavioral economics (Sunstein, 2016a). Consequently, the packaging of this social policy program has made it extremely popular with several governments across the world (UK, US, Germany, Denmark, Australia, Singapore) (Sunstein, 2016a). However, as convincing as this social policy program sounds, researchers have highlighted several practical, theoretical and ethical challenges (e.g., Gigerenzer, 2015; Lodge, & Wegrich, 2016; Osman, 2014, 2016; Saghai, 2013; Rebonato, 2012; Sawicki, 2016; Sugden, 2008; Yeung, 2016) that have yet to be adequately dealt with by advocates of the nudge program. So, to engage with these issues head on, the second part of this series presents three probing questions themed around BCTs to researchers from psychology (Elke Weber, Nick Chater) and philosophy (Tills Grüne-Yanoff). The answers are then used in the final part of this series to provide some take home messages for behavioral scientists and practitioners in order to move the “nudge” program ahead in concrete ways.
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Nick Chater: Nick Chater joined Warwick Business School in 2010, after holding chairs in psychology at Warwick and UCL. He has over 200 publications, and was elected a Fellow of the Cognitive Science Society in 2010 and a Fellow of the British Academy in 2012. Nick is co-founder of the research consultancy Decision Technology; and is on the advisory board of the Behavioural Insight Team (BIT), popularly known as the ‘Nudge Unit’.
Yashar Saghai: Yashar Saghai is currently a research scholar and associate faculty member at the Berman Institute Johm Hopkins University. His research in applied ethics, political philosophy, and philosophy of science focuses on possible food futures. He engages with several fields, such as: food and agriculture; futures/foresight studies and history; public health and medical research; behavioral economics and cognitive psychology.
Elke Weber: Elke Weber is Gerhard R. Andlinger Professor Princeton University after holding the Jerome A. Chazen Professor of International Business in the Management Division of Columbia Business School and a chair in psychology. She has over 200 publications, is past president of the Society for Mathematical Psychology, the Society for Judgment and Decision Making, and sit on advisory committees of the U.S. National Academy of Sciences.
Till Grüne-Yanoff: Till Grüne-Yanoff is Professor of philosophy at the Royal Institute of Technology (KTH) in Stockholm. He has over 60 publications on the topics of philosophy of science and decision theory, as well as formal models of preference consistency and preference change, and the evaluation of evidence in policy decision making. He is a member of the TINT Finnish Centre of Excellence in the Philosophy of Social Science in Helsinki.
Magda Osman: Magda Osman is Associate Professor of Experimental Psychology at Queen Mary University of London. She has over 60 publications and authored 3 books. Her research interests include dynamic decision-making, agency and control, and critical evaluations of dual-systems of thought. She is head of the Centre for Mind in Society, and sits on various advisory panels, consulting on banking regulation, food safety, and advertising.