Nudge politics: efficacy and ethics

Nudge politics capitalize on psychological insights on human behavior to inform central policies. The scope for such policies to bring about large improvements in individual behavior for relatively little cost has captured the imagination of governments worldwide. “Nudging” involves using choice architecture—the ways decisions are framed or presented—to modify choosers’ behavior (Thaler and Sunstein, 2008). The common assumption that people always make optimal decisions for themselves when provided with accurate information has been proven false in several contexts. Instead, people’s decisions are often influenced by the context in which they are made. For example, people often overvalue immediate relative to long-term prospects, get stuck in harmful habits and are disproportionately inclined to copy the behavior of others in their social group, even to their detriment (Thaler and Sunstein, 2008). Nudges can be used to help people to overcome these tendencies. For example, they might help people save toward their pension, to choose healthier food options or to reduce their energy consumption, amongst other things (Thaler and Sunstein, 2008). Nudges are ostensibly paternalistic in that they help people to make decisions that are in their best interest (Thaler and Sunstein, 2003, 2008). At the same time, nudges are also libertarian, in that they preserve freedom of choice (Thaler and Sunstein, 2003, 2008). Here, I discuss the contexts in which nudges are likely to be most useful and also highlight some potential pitfalls with this policymaking approach. I also discuss the ethics of nudge politics, particularly when policies are designed to maximize collective, rather than individual, benefits and do not therefore fit the concept of paternalism. In several cases, the behavior change produced by the nudge may not produce the desired policy outcome. This is especially likely when the desired outcome involves a series of repeated decisions that are made in different contexts other than that in which the nudge is implemented. Consider nudges surrounding food choices. Rising levels of obesity, and the associated population health implications, are key policy issues for governments worldwide (Just and Payne, 2009). Several nudges have been designed which can encourage healthier food choices in specific scenarios. For example, designating a larger area of the supermarket trolley for fruit and vegetables, or increasing the prominence of healthy food items in cafeterias, can encourage consumers to select more of these items (Marteau et al., 2011). However, it is currently unclear whether people who are nudged to make healthier food choices in the supermarket or the cafeteria continue to make healthier food choices in future situations, when they are not nudged. While advocates may not claim that nudges are a panacea for positive behavior change, there is a danger that some nudges may produce negative spillover effects, which risks bringing about the opposite outcome to that which was intended. For example, one study has shown that low-fat labels on food— another method used to promote healthier food choices—can actually increase caloric intake because consumers experience reduced consumption guilt (Wansink and Chandon, 2006). Nudges may be more likely to achieve the desired policy outcome when the outcome in question involves just one key decision, as is the case with encouraging participation in organ donor schemes or adding loft insulation to improve household energy efficiency. In these cases, nudges aimed at eliciting a specific decision in a specific context also simultaneously produce the desired outcome. Where outcomes are dependent on a series of decisions, policy makers should be aware that behavior change may be limited to a specific context or, worse that the nudgemay produce negative spillovers, thereby negating some or all of the positive impact of the initial behavior change. The efficacy of interventions may vary across contexts: what works well in one situation or with one group of people may be of limited use in different settings or with different cultural groups. For example, consider behavior change in the context of energy use. Data collected on over 6 million US households by the energy company, Opower, has shown that consumers can be encouraged to use less energy if they are given feedback about how their energy use compares with that of similar sized households in their neighborhood, together with tacit approval or disapproval in the form of an emoticon. These messages on the energy bill, together with suggestions of how to reduce energy use, have been shown to reduce energy consumption by around 2% (Allcott, 2011). However, the efficacy of this normative feedback varies with other factors, such as country and political ideology. Similar interventions used in the UK produced greater reductions in energy consumption than in the US (Dolan and Metcalfe, 2012, working paper), while another study showed that US households with politically liberal ideology were more likely than conservative households to reduce energy use in response to normative feedback (Costa and Kahn, 2013). These findings suggest that targeted nudges may be most effective at producing widespread behavioral change (Costa and Kahn, 2013)