Predicting people’s behaviour and designing policies in a way that ‘nudges’ behaviour in a certain direction can lead to better policy-making and improved management. At the same time, a common concern is that nudges are seen as manipulative; sneaky ways of affecting people’s behaviour without telling them.
During a lively parallel session at the online Tea & Talent event on Behavioural Insights & Change, organised on 4 November 2021 by UMIO in partnership with the UM Behavioural Insights Centre (UM-BIC) and the Behavioural Insights Network Netherlands (BIN-NL), Thomas Meissner and Jona Linde elaborated on the effects and ethics of nudging.
About nudges
Richard Thaler and Cass Sunstein popularised the concept of ‘nudges’ in 2008. According to them, a nudge is ‘any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives’. “Nudges are basically a new tool in the toolkit of policy-makers which differ from the traditional tools in a sense that they are not changing incentives in any meaningful way”, explains Thomas Meissner, Assistant Professor of Economics at the School of Business and Economics at Maastricht University. Meissner outlined how nudges are being used around the world in the kick-off of his presentation about whether and how research on nudge interventions can be transformed to professional practice. “Nudges were first mainly of academic interest”, says Meissner, “but are now increasingly popular in policy making as well. Nudges are basically everywhere and there are now over 200 nudge units worldwide.”
From academic studies, we know relatively well how nudges actually work. Interventions that are used by academics in order to advance knowledge lead to publications. There are a few meta studies but they are all subject to publication bias which means that all the studies that would not have a huge effect cannot be found in these meta studies. Meissner assumes that the nudge units themselves must have quite a good idea of how well their mediations actually work. But the fact is that the broader public does not have access to that information, so there is quite a lack of a comprehensive picture of nudge units.
RCT comparison Dellavigna and Linos
This has changed recently with some research done by DellaVigna and Linos in 2021. They compared Randomised Controlled Trials (RCTs) from nudge units with RCTs published in academic journals. The results of this research show that the academic journal sample is much more successful in getting the behaviour that they wanted than the nudge unit sample. The difference lies in three different potential explanations:
- the statistical power, which has to do with the large difference in sample sizes;
- the difference in effect sizes between interventions of nudge units and interventions of academics;
- selective publication; the way in which academics do research and publish their findings.
The main reason for the difference in effect sizes is publication bias.
The ethics of nudging
“Sometimes people might think that a nudge is a low-impact intervention, that people can always avoid it”, says Jona Linde, Assistant Professor in the Microeconomics and Public Economics department at Maastricht University. “But to be sure we are promoting better decisions for people and society at large, we should care about the ethics of nudging. If you implement nudges in an ethical way, people are more likely to actually accept the nudge”, he explains. In this way, negative responses from people being nudged can be avoided.
Nudging for better decisions
There are a number of issues to consider in nudging for better decisions. Jona Linde clarifies that the original goal of a nudge is to help you make better decisions from your own perspective. A nudge might affect outcomes in the way people make decisions and what we should be doing, it might lead to better outcomes for some people, but worse for others. We should question ourselves whether that is ethical or not, taking indirect consequences into account as well.
In many cases we cannot really tell what is a better decision. Often, we only know decisions are inconsistent, not which one is better. From a practical perspective, even if we know what a better outcome is, nudges may lead to worse decisions due to reliance on certain nudges or after getting used to being nudged. Another issue is moral licencing; if you do something good today, you might think that it is okay to make a ‘bad’ decision tomorrow. For example, eating healthy food one day and junk food the next.
Outcomes or decision-making
When people rely too heavily on a nudge it might actually harm their decision-making process. We make thousands of decisions a day and we cannot make all of them consciously so as a choice architect you still have to think “when should I really have to make people make an active decision, and when do I need to steer them to the right option?”.
A question that comes up quite a lot, especially amongst people who encounter nudges for the first time, is whether nudges are a form of manipulating people. Openness about the fact that you are nudging and why you are nudging does not reduce effectiveness and may even increase it.
Better for some, worse for others
Nudges are better for some, but not for everyone. They might lead to worse outcomes for others. If we are nudging people to save for their retirement, for example, they might save more in the account that we are nudging them towards, but save less somewhere else. So, it is not always clear whether following the nudge is actually better for them. People who are in more vulnerable economic circumstances in particular, are often affected by nudges in negative ways since they tend to be more likely to follow the default even if they don’t want to.
In research done by Ghesla et al. (2020) examples are outlined of how people switch energy providers. When you make it the default to have a contract where you get green energy instead of grey energy, and the green energy is more expensive, those people with a higher income will opt out of it when they don’t want it. If they do want it, they will opt in for green energy anyway. However, people with a lower income are much more likely to follow the default, even if they don’t want to.
Similarly, people who are in a minority group may have different preferences than those people in the majority group within a population, which might relate to cultural or other reasons. A default option or another type of nudge might be systematically to their disadvantage because it is not nudging them into what is best or desirable for them.
For yourself or for others?
In many cases, we are not nudging people to make better decisions for themselves only but also to make decisions that are better from a societal perspective as well. For example, donating money by default, the social pressure of reducing energy use, automatic organ donation or vaccination. On the one hand we do this because we think it is better for someone, but often it is done for society’s interest or sometimes to simply save costs because it is cheaper for an organisation.
Ethical nudging and decision making
The central message of ethical nudging is that even though you are engaging in a nudge, this does not mean that you should not have to think about these ethical outcomes, about whether what you are doing leads to improvements in society. If anything, knowledge of behaviour introduces many more ways in which policy, including choice architecture, can influence decisions and therefore have unintended effects.
Taking the next step
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