Over (2008) through their book “Nudge: Improving

Over the last decade, interest in human decision-making has peaked significantly (Sunstein, 2015) leading to increased scientific curiosity about the processes behind decision-making. Understanding human behaviour, and identifying key influencing factors, is essential in shaping our understanding of today’s society. A more recent phenomenon, which has sparked even greater debate, is the concept of ‘Nudging’. The concept had emerged among some scholars in the mid 90s but was further explored and brought to public prominence by Richard Thaler and Cass Sunstein (2008) through their book “Nudge: Improving Decisions about Health, Wealth, and Happiness”. A nudge has been defined as ‘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’ (Thaler & Sunstein, 2008, p.6). Therefore, nudges are decision-making interventions, which are inexpensive, easy to opt out of, transparent and free from penalties (Selinger & Whyte, 2011). They work on the assumption that humans are naturally error prone when making decisions (Sunstein & Thaler, 2003PS1 ). Nudges work alongside the misleading heuristics and biases to produce rational decision outcomes without coercion or choice restriction (Thaler & Sunstein, 2008). Nudges have indeed received positive limelight, as many behavioural economists argue it is an effective way forward in changing the nature of social policy making (Mills, 2013). Nudges have been recognised and recommended due to their role in overcoming powerful heuristics, tackling the inevitable nature of choice architecture and simplifying complex life decisions. However, the intensifying global debates have inevitably led to the emergence of concerns and disagreements. Most of the criticisms regard ethical and moral considerations, claiming nudges are more like ‘shoves’ in that they limit individual autonomy (Selinger & Whyte, 2011). Further criticisms focus on the fact that nudges can often have undesirable effects that can threaten society (Goodwin, 2012). TheirPS2  apparent powerful role in significantly influencing collective behaviours highlights the importance of properly addressing any concerns, so that their use is scientifically justified and ethical. With the correct scientific research, appropriate implementation, motivation and careful monitoring, nudges can indeed be used in an ethically friendly way, and thus should be considered as a tool to influence decision making and shape social policies.

 

The success of nudges in tackling heuristics and biases is one of its most appealing characteristics. Over the years, psychologists have promoted the Dual Process theoretical framework for human thinking (Evans, 2003). The process of thinking is said to involve two different pathways: reflective and automatic. Reflective thinking is under unconscious control, fast, automatic, and error prone. In contrast, the automatic system operates under conscious control, is slower, more effortful and generally more reliable (Evans, 2003). Often, when cognitive resources are limited e.g. due to tiredness, stress, time restrictions, individuals suffer from the effects of biases and are usually unable to correctly reach a rational decision (Thaler & Sunstein, 2008). Simple factors such as the source, wording and the difficulty of the question can affect one’s decision. Whilst heuristics (mental shortcuts) help reach an answer with speed and little effort, it is often frustrating when they lead to incorrect answers. For example, people often fail to overlook availability heuristics, where individuals incorrectly assess how likely something is to occur (Ariely, 2008). This error can be seen with insurance sales for natural disasters. Even those who live in high-risk areas often incorrectly perceive the threat of natural disaster. Increased insurance sales only tend to occur shortly after the occurrence of a natural disaster e.g. earthquake, as recent events reside in one’s short-term memory (Thaler & Sunstein, 2008). People’s judgements are not matched to the true probabilities of events, and rather emotional salience often causes the inflation of probability estimates. With such important decisions to make, nudges have been strongly recommended due to their role in overcoming people’s biased tendencies. In the example above, a nudge could be used for those living in high-risk areas, where natural disaster probabilities are significant, to encourage the purchase of insurance policies. That would act as a slight persuasion towards buying insurance, however, all the options would still be available to the decision maker. Automatic system thinking errors are inevitable, and occur frequently in individuals’ lives. Nudges can help conserve authentic decision making, by helping humans to overcome their heuristic led mistakes. Scientific knowledge of the human mind has provided the framework forPS3  which nudges are based on (Selinger & Whyte, 2011). It is therefore extremely important to use this knowledge in order to impact human’s decision making in the most positive way possible. 

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Behavioural economists have argued that choice architecture is inevitable in today’s society, and that nudges can have an overwhelmingly positive influence on this (Amir & Lobel, 2008). Choice architecture refers to the way choices are presented to a decision maker (Johnson et al., 2012). Simple things, such as the specific arrangement of products in a café can significantly affect purchase patterns. Research has shown that people buy more food from the beginning of the food section (Sunstein & Thaler, 2003). Thus, food choice is not always influenced by pre-existing taste preferences, but also by its context. Even without the active implementation of nudges, decision-making processes are influenced by multiple external factors. Another example includes Wansink & Kim’s study (2005), which investigated the effects of packaging and container size on popcorn intake at the cinema. Even when the popcorn was stale, and thus disliked by most consumers, intake was still significantly higher in the larger containers. Environmental cues (size of packaging) were strong enough to override taste preferences. Ensuring that the effects of choice architecture are of a positive nature is critical during the nudge design process. Not using the scientific knowledge on human behaviour to promote welfare and rationalism would be unethical. Nudges can indeed promote positive decision-making, since individuals have the ultimate freedom to make decisions. If non-coercive interventions can reduce the chances of e.g. illness and suffering, then it is moral and ethical to implement them in society. Ultimately, if an individual wants to make self destructive or inappropriate decisions then they are able to do so. The government however, should not adopt a completely distant and ignorant position, but rather actively try to create a safer and healthier society. Those “policy” choices will certainly be shaped by the historical views on what constitutes a better society.