You might think that the best way to get someone to do something is to flat-out tell them. This makes sense, but unless you have actual authority over that person (because you're their parent, boss, or teacher, for instance) it's not the best way to go. It turns out that indirect suggestion produces far better results when dealing with people who could just as easily say, "No thanks." This is how nudge theory works.
Nudge Theory and Behavioral Economics
You've probably encountered nudge theory at work on a daily basis. If you've ever set your clock ahead to avoid being late, bought single-serving snacks instead of a huge bag to avoid overindulging, or set up your bank account to automatically deposit a portion of your paycheck into savings, you've done it to yourself. Of course, companies do it too; it's present everywhere from the punch card at your favorite lunch place to the extra fee some airlines charge for carry-on bags.
Nudge theory is one of the most exciting areas in the field of economics today. It's so important that Richard Thaler, a leading academic in the field of behavioral economics, received the 2017 Nobel Prize for his work on the concept. This framework helps governments create policies that better serve their citizens' needs. It helps patients around the world gain access to life-saving transplant organs. Of course, it also helps businesses sell things to their customers, but it can also help everyday people avoid arguments and disagreements with friends and family while still getting the results they're looking for.
The key idea that makes nudge theory different than other economic theories is that it doesn't pretend that people ("agents," in economist-speak) make decisions purely out of rational self-interest. Instead, it works on the premise that the vast majority of the decisions people make happen on autopilot, or as a result of external factors that the decision-makers are only marginally aware of.
Isn't This Just Mental Manipulation?
Critics of nudge theory point out some obvious ethical concerns. Any time you persuade someone to do something they wouldn't ordinarily do, you've ventured into a moral gray area — especially when it comes to directly harmful activities like smoking cigarettes and drinking alcohol. Propagandists have used proto-forms of nudge theory to send young soldiers to war for centuries. Like any other tool, a subtle suggestion can be used for both good and evil.
However, it's difficult to place moral responsibility on someone for making a suggestion — after all, the decision-maker is, by definition, the one who chose to perform the action, whether guided by subtle external factors or not. The fact is that nudge theory never directly compels people to make certain decisions and that anyone being "nudged" always retains the choice to do whatever they believe is best for them. The philosophical jury is still out on the ethical conundrums presented by the latest advances in nudge theory.
Examples of Nudge Theory in Action
One of the most famous examples of nudge theory is the placement of small fly-shaped stickers on the urinals in Amsterdam's Schiphol airport. This had the surprising effect of reducing urinal spillage by 80 percent. Spain's organ donation system automatically registers citizens unless they choose to opt-out, making it the world's number-one source for organ transplants worldwide. Supermarkets have found that placing arrows on the ground leading to their fresh fruit and vegetable stands leads to produce sales skyrocketing.
For unethical examples of nudging, look no further than companies that offer "free" trial subscriptions. These usually come with fine print specifying that you'll pay the full price of the subscription at the trial's end unless you opt out, and opting out is often more complicated than they let on. Even a fast-food restaurant cashier asking if you want to supersize your meal is an example of nudge theory in action — most customers will say "yes" without even thinking about it.
However, knowing that you often make decisions on autopilot can help you set yourself up for good decision making. If you're trying to start a good habit, set up your day so that sticking to those behaviors your easiest option, and you're more likely to succeed.Source:Web
