Nudge

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Richard Thaler
Cass Sunstein

Nudge ( . English for nudge or shove , here in the sense of food for thought) is a concept of behavioral economics , which by the economist Richard Thaler and legal scholar Cass Sunstein and their book Nudge: Improving Decisions About Health, Wealth, and Happiness (German Nudge: How to initiate wise decisions ) from 2008: The authors understand a nudge to be a method of influencing people's behavior without having to resort to prohibitions and requirements or to change economic incentives. Since this publication, the term has also been used in other areas, such as marketing communication.

In contrast to the Homo oeconomicus model, a more realistic view of man is assumed: Man is not always able to make the optimal decision. Experimental economic research also shows that people behave differently in many situations than the theory of rational utility maximization predicts.

According to Thaler and Sunstein, this can be corrected with “nudges”. For example, in a cafeteria, fruit and vegetables are placed at eye level in order to increase their consumption, or cigarette packets are provided with warnings to reduce consumption. If this type of nudging is used by the state, it is called “ libertarian paternalism ”.

Defaults

An important nudge is the setting of socially optimal "defaults" (German "standards"). If people no longer deviate from these "defaults", they behave optimally (from the perspective of the regulator, normally the state). In the USA, for example, it has been observed that significantly more people take out a company pension scheme if joining the pension scheme is the default option when taking up employment. If, on the other hand, people have to actively decide to join the company pension scheme, many people hesitate to take this step for too long, which leads to poor security in old age.

For example, many consumers keep their screen saver preset on their computer or laptop because the decision to change is associated with search costs. The screen saver presets are chosen by the manufacturer for the average PC user.

The online retailer Amazon also sets a default for consumers: after the online purchase has been completed, consumers are finally asked how the product should be shipped. Amazon has already selected this as “standard delivery”. Consumers tend to stick with this shipping method because switching shipping often incurs transaction costs and time inconsistencies.

A well-known example of “default nudges” in the field of environmental economics is paper consumption in companies. A university in New Jersey set the printer to "double-sided" by default. It was too cumbersome for the individuals to switch the printer to “one-sided printing”. Therefore, it was automatically printed on both sides. In comparison to the last four years, 55 million sheets of paper have been saved or printed less at this university. This corresponds to a reduction of 44% and the protection of 4,650 trees.

Information nudges and self-control nudges

Information nudges provide more information to individuals so that an optimal decision can be made. Here, the information nudges are divided into two different groups: On the one hand, information is provided to protect the weak players (market participants), and on the other hand, information is provided so that the optimal decision can be made.

To protect weak market participants, information is provided to improve decision-making situations. Information nudges are used in particular for complicated and complex decisions in order to guide the behavior of consumers. An example of an information nudge is the food traffic light. The food labeling provides an overview of the ingredients of the food.

Self-control nudges: People receive government support for problems with self-control. For example, an individual can voluntarily apply for a self-lock if there is significant gambling addiction, which means that access to casinos is prohibited throughout Germany.

On the American Internet platform StickK.com, citizens can conclude binding contracts in order to solve self-control problems. When the contract is concluded, an institution or person is named who will monitor whether the individual achieves the agreed goal. If the goal is not achieved, the individual pays an amount of money to the institution or person. This is intended to strengthen the motivation of the individual.

classification

In their book, the authors advocate a “ libertarian paternalism ”: Based on the empirical knowledge that human decisions are only rational to a limited extent and are inevitably influenced by their context ( decision architecture), the bodies that can influence the context should also do so do that the common good is promoted. This “paternalistic” influencing of people is classified as libertarian insofar as the decision maker has the option at any time to decide against the path he is being “pushed”.

The combination of paternalism and liberalism was suggested by the authors back in 2003 in their article Libertarian Paternalism .

Examples

Example of a nudge:
Fly image as a “target” in front of the siphon of a urinal

The two authors give the following examples of nudges:

  • If an image of a fly is placed in urinals, 80% less urine ends up on the floor because the men aim at the fly when urinating.
  • If fruit is presented in a raised position at a canteen buffet, but donuts and Danish pastries are further away, users reach for fruit more often. A mirror behind the buffet also lets them grab fruit instead of donuts, as an experiment on US broadcaster ABC shows.

In line with the concept of libertarian paternalism, Thaler and Sunstein propose, among other things,

  • Introduce private pension plans that are paid into automatically, unless you consciously decide not to, and the rate of which increases automatically with every raise in your salary;
  • to design the system of organ donation in such a way that everyone is considered an organ donor, unless they explicitly decide against it ( objection rule ).

According to Richard Thaler , three principles guide the use of " ethical " nudges:

  • Nudges must be transparent and not misleading;
  • it should be as easy as possible to opt out of a nudge, with just a click of the mouse whenever possible;
  • there should be good reason to believe that the behavior encouraged by a nudge is for the welfare of society.

Policy nudging

There are over 80 behavioral insights teams worldwide.

In 2010 the UK government set up a Behavioral Insights Team to find ways to use nudge theory to improve government policies and services. Among other things, the project group investigated ways to increase willingness to pay taxes, donate to charitable organizations, avoid mistakes in prescribing medication and increase voter turnout. Paul Dolan was also a member of the FOITT and developed, among other things, the Mindspace concept as a catalog of measures for policy advice in the areas of health, finance and climate change.

New South Wales in Australia has a "Behavioral Insights" unit.

In the USA there is a similar group with the Social and Behavioral Sciences Initiative . Due to the competency regulations in the US Constitution , in particular the 14th Amendment to the Constitution of the United States and its principle of equal treatment, special requirements are placed in the USA on proportionality. In particular, state regulations are primarily seen from the perspective of an interference with civil liberties, the needs of which must be weighed. Nudging (English for nudging) in the sense of a shift in incentives, on the other hand, does not count as interference and is therefore much easier to enforce and defend in the event of a judicial challenge.

At the end of 2014, the Federal Chancellery also hired three speakers with a background in behavioral economics, which was understood as an attempt to introduce nudge techniques into German government work. It is currently controversial to what extent nudging is used in the Chancellery.

The nudge approach is gaining increasing importance as a complementary instrument in ecologically oriented consumer policy to promote sustainable consumer behavior.

Important questions from the state

  1. Which problem should be solved with the defaults? How could a nudge improve welfare?
  2. Which needs are actually true? What are the wishes of individuals in society?
  3. To what extent does the so-called nudge lead to the wishes and decisions of individuals?

Ten essential nudges for politics

Default rules These are the most effective nudges for politics. Pre-set printing, for example, so that consumers can print on both sides. This saves printer paper.
Simplification Care is taken to ensure that, for example, forms and applications are kept so simple and clear that it does not lead to confusion.
Social norms (Use of social norms) They are based on the fact that a majority in society is already pursuing the desired behavior. A good example are elections, in other words asking to vote, or paying taxes.
Increase in ease and convenience People often try to avoid difficult paths and choose the easiest path. That is why politics tries to minimize obstacles. For example: for the health of fellow human beings, efforts are made to facilitate access to healthy food and to increase the availability of healthy food.
Disclosure This principle is mainly tailored to consumers. The prerequisite for this is the comprehensibility of the information available in order to encourage certain decisions. This is, for example, providing information about the use of a credit card or disclosing energy usage to the consumer.
Warnings (warnings, graphic or otherwise) Changes in the color or size of packaging as well as graphic elements can increase the awareness and self-reflection of the consumers, e.g. For example, warnings on cigarette packets are supposed to encourage consumers to smoke less.
Precommitment strategies These are, for example, targeted programs to influence the self-commitment of individuals with a view to a healthier life (not smoking and doing more sport). In society, people often fail to pursue their own goals and realize them. For this reason, they should disclose their goals in order to reach the goal better (through a bet with friends and acquaintances).
Reminders It can be that people are forgetful or that they are behind schedule. For this reason, small reminders are sent to them so that individual action is still possible. E.g .: reminders by email for delayed payments or before appointments.
Eliciting implementation intention People act more often if you specifically ask about their intentions to act. For example, a question such as “Will you vote?” Or “Are you going to have your child vaccinated?” Could induce individuals to actually do so.
Information about the consequences of previous decisions Institutions receive personal data and information about individuals. The automatic disclosure of this information to those affected can help people to learn from previous decisions and to change current decisions if necessary. Examples in this case would be regular information about their energy use or about health expenses for their person.

Instruments of Libertarian Paternalism

Set default and fallback options

The standard options are the most important defaults of libertarian paternalism. The default settings are the starting point for business subjects to make certain decisions. Individuals sometimes cannot make an active decision. For this reason, the standard rules are often used.

Framing and information architecture

The individuals have different perceptions. Information, symbols and signals influence people's decision-making. Decisions made by individuals therefore depend on the presentation or representation of the decision context and the decision-making situation.

Social influence (social nudges)

Social influencing is when people learn from their fellow human beings. For one thing, individuals learn that if many people know something, then people will imitate it. On the other hand, it is peer pressure.

criticism

The nudge approach has been criticized from a wide variety of scientific disciplines. Psychologists are already attacking Thaler's and Sunstein's assumption that humans behave “irrationally”. The behavioral experiments could and should be interpreted quite differently; the observed “behavioral anomalies” are by no means to be assessed as human deficits, but rather make good sense and are even “intelligent”.

From a legal perspective, the paternalistic aspect of the nudge approach is particularly criticized, in which economic assumptions about “being” are inferred from a legal “ought”. Incidentally, nudges interfere with fundamental rights in a sometimes unjustified manner and are therefore unconstitutional. Constitutional limits are set in any case if paternalistic nudges do not respect the free choice of a self-determined, informed individual.

There are also various forms of philosophical criticism of the nudge approach. On the one hand, the unclear and inconsistent use of the term nudge by Thaler and Sunstein is criticized at the conceptual level, so that the approach cannot be clearly distinguished from other forms of behavior control. On the other hand, the societal consequences of nudges are criticized at the normative level. Critics say that nudges are difficult to reconcile with the basic democratic principles of public institutions, among other things because nudges do not provide grounds for action. In a democracy it would be difficult to take legal action against nudges - in contrast to, for example, clear prohibitions to act. In ethics and philosophy, nudging and libertarian paternalism are controversial. Likewise, the plausibility of the claim that “soft” paternalism respects the autonomy of the individual is questioned.

From an economic point of view, it is criticized that the normative foundations of the nudge approach are unclear, since it can never be determined with certainty which type of influence corresponds to the actual interests of the individuals manipulated in their decisions. In sustainability research, the effectiveness of nudging as an environmental policy instrument is questioned, with both Thaler's approach and the criticism of it being criticized as being under-complex. From a methodological point of view, Allcott and Kessler (2019) criticized the fact that the consideration of the (undisputed) benefits of nudging was in the foreground without realistically assessing the associated costs.

See also

literature

  • S. Bosworth, S. Bartke: Implications of nudging for consumer welfare. In: Economic Service . 94 (11), 2014, p. 777.
  • L. Bruttel, F. Stolley: Nudging as a political instrument - good intentions or state encroachment? In: Economic Service. 94 (11), 2014, pp. 767-771.
  • D. Düber: Convincing, nudging, forcing - The conception of nudge and libertarian paternalism and their relationship to other forms of behavior control In: Zeitschrift für Praktische Philosophie . 3 (1), 2016, pp. 437-486. (Full text)
  • P. Ebert, W. Freibichler: Nudge management: applying behavioral science to increase knowledge worker productivity. In: Journal of Organization Design. 2017.
  • D. Enste, M. Ewers among others: Consumer protection and behavioral economics. On the psychology of trust and control . Institute of the German Economy , Cologne Media, 2016.
  • Stephan Gerg: Nudging. Constitutional standards for the sovereign influence on the internal autonomy of the citizen . Dissertation. Mohr Siebeck, Tübingen 2019. ISBN 9783161576935 .
  • R. Neumann: Libertarian paternalism. Theory and empiricism of state decision-making architecture. Mohr Siebeck, Tübingen 2013.
  • K. Purnhagen, L. Reisch: “Nudging Germany”? Challenges for behavior-based regulation in Germany. (= Wageningen Working Papers in Law and Governance. No. 9). 2015.
  • L. Reisch, J. Sandrini: Nudging in Consumer Policy. Approaches to behavior-based regulation. Nomos Verlagsgesellschaft, Baden-Baden 2015.
  • Richard Thaler , Cass Sunstein : Nudge. Improving Decisions About Health, Wealth, and Happiness.
    • Libertarian paternalism. In: The American Economic Review. Volume 93, No. 2: Papers and Proceedings of the One Hundred Fifteenth Annual Meeting of the American Economic Association. Washington DC, May 3-5, 2003, pp. 175–179, (online)
    • Nudging- How to initiate smart decisions. 5th edition. Econ, Berlin 2008.

Web links

Commons : Nudge  - collection of images, videos and audio files

Individual evidence

  1. ↑ Richard Thaler, Cass Sunstein: Improving decisions about health, wealth and happiness. 2008, ISBN 978-0-14-311526-7 , p. 6.
  2. ↑ a b c L. Bruttel, F. Stolley: Nudging as a political instrument - good intention or state encroachment? In: Economic Service. 94 (11), 2014, p. 767.
  3. ↑ Federal Agency for Civic Education : "Don't push me!" Nudging as a political tool , November 6, 2017, accessed April 4, 2019
  4. ↑ Lisa V. Bruttel, Florian Stolley, Werner Güth, Hartmut Kliemt, Steven Bosworth: Nudging as a political instrument - good intentions or state encroachment? In: Economic Service . tape 94 , no. 11 , November 1, 2014, ISSN  1613-978X , p. 767-791 , doi : 10.1007 / s10273-014-1748-9 .
  5. ↑ a b D. Enste, M. Ewers et al: Consumer protection and behavioral economics. On the psychology of trust and control. Cologne: Institute of the German Economy Cologne Media, 2016.
  6. ↑ K. Purnhagen, L. Reisch: “Nudging Germany” Challenges for a behavior-based regulation in Germany. (= Wageningen Working Papers in Law and Governance. No. 2015/09)
  7. ^ Wissenschaft.de : Disciplined like Heidi Klum , April 20, 2010, accessed on April 4, 2019
  8. ^ The American Economic Review
  9. ↑ Nudge. Improving Decisions About Health, Wealth, and Happiness. P. 4.
  10. ^ ABC News
  11. ^ Richard Thaler: The Power of Nudges, for Good and Bad. In: The New York Times . October 31, 2015.
  12. ^ Behavioral Insights and Public Policy - Lessons from Around the World - en - OECD. Retrieved October 15, 2017 .
  13. ↑ Paul Dolan include: Mind Place: influencing behavior through public policy. 2014.
  14. ↑ Christopher Unseld: Take your 3D glasses off - How nudging provokes the way we imagine law. Verfassungsblog, April 19, 2015.
  15. ↑ Jan Dams, Anja Ettel, Martin Greive, Holger Zschäpitz: Merkel wants to educate the Germans through nudging. on: welt.de , March 12, 2015.
  16. ↑ Umweltbundesamt , Dessau-Roßlau 2013, Umweltbundesamt.de : Environmentally compatible consumption through legal control. Documentation of the symposium in the State Representation of Saxony-Anhalt in Berlin on November 27, 2012.
  17. ↑ S. Bosworth, S. Bartke: Implications of nudging for consumer welfare. In: Economic Service. 94 (11), 2014, p. 777.
  18. ↑ a b c L. Reisch, J. Sandrini: Nudging in consumer policy. Approaches to behavior-based regulation. Nomos Verlagsgesellschaft, Baden-Baden 2015.
  19. ^ A b R. Neumann: Libertarian Paternalism. Theory and empiricism of state decision-making architecture. Mohr Siebeck, Tübingen 2013.
  20. ^ Cass R. Sunstein, Richard H. Thaler: Nudging- How to initiate smart decisions. 5th edition. Econ, Berlin 2008.
  21. ↑ Gerd Gigerenzer: Gut decisions: The intelligence of the subconscious and the power of intuition. Munich 2008.
  22. ^ Johanna Wolff: An approach to the nudge concept according to Richard H. Thaler and Cass R. Sunstein from a legal point of view. In: Journal for legal research. (Law). 2/2015, p. 194 (209) with further references
  23. ↑ Alexandra Kemmerer, Christoph Möllers, Maximilian Steinbeis, Gerhard Wagner (eds.): Choice Architecture in Democracies. Exploring the Legitimacy of Nudging. Baden-Baden / Oxford 2016.
  24. ^ Johanna Wolff: An approach to the nudge concept according to Richard H. Thaler and Cass R. Sunstein from a legal point of view. In: Journal for legal research. (Law). 2/2015, p. 194 (213 ff.) With further references
  25. ^ Anne van Aaken: Constitutional Limits to Paternalistic Nudging: A Proportionality Assessment . In: Alexandra Kemmerer et al. (Ed.): Choice Architecture in Democracies. Exploring the Legitimacy of Nudging . Nomos / Hart, Baden-Baden / Oxford 2016, p. 161-195 .
  26. ↑ Dominik Düber: Convincing, nudging, forcing - the conception of nudge and libertarian paternalism and their relationship to other forms of behavior control . In: Journal for Practical Philosophy . tape 3 , no. 1 , 2016, ISSN  2409-9961 , p. 437-486 ( http://www.praktische-philosophie.org/duumlber-2016.html full text [accessed on May 14, 2017]).
  27. ↑ Working group “Effective governance” - give the Germans a nudge. Robert Lepenies in conversation with Liane von Billerbeck . DeutschlandRadio Kultur, March 2, 2016.
  28. ↑ Martin Rhonheimer: In a liberal state, nudging actually has no business NZZ . In: Neue Zürcher Zeitung . January 13, 2018, ISSN  0376-6829 ( nzz.ch [accessed January 18, 2018]).
  29. ↑ Johannes Drerup, Aaron Voloj Dessauer: Of small nudges and large nudges - the politics and ethics of libertarian paternalism on the test stand . In: Journal for Practical Philosophy . tape 3 , no. 1 , July 13, 2016, ISSN  2409-9961 , p. 347-436 , doi : 10.22613 / zfpp / 3.1.12 .
  30. ↑ Robert Lepenies, Magdalena Malecka: Nudges, Law and Politics: Institutional implications . In: Journal for Practical Philosophy . tape 3 , no. 1 , July 13, 2016, ISSN  2409-9961 , p. 487-530 , doi : 10.22613 / zfpp / 3.1.14 .
  31. ↑ Thomas Schramme: The political quackery of libertarian paternalism . In: Journal for Practical Philosophy . tape 3 , no. 1 , July 13, 2016, ISSN  2409-9961 , p. 531-558 , doi : 10.22613 / zfpp / 3.1.15 .
  32. ↑ Jan Schnellenbach: Does a policy of “soft” paternalism respect the autonomy of individual consumers? Prometheus Institute, Berlin 2016 ( prometheusinstitut.de [PDF; accessed on May 15, 2016]). , Christopher McCrudden, Jeff King: The Dark Side of Nudging: The Ethics, Political Economy, and Law of Libertarian Paternalism . In: Alexandra Kemmerer et al. (Ed.): Choice Architecture in Democracies. Exploring the Legitimacy of Nudging . Nomos / Hart, Baden-Baden / Oxford 2016, p. 75-139 .
  33. ^ Jan Schnellenbach: A Constitutional Economics Perspective on Soft Paternalism . In: Kyklos . tape 69 , no. 1 , 2016, ISSN  1467-6435 , p. 135–156 , doi : 10.1111 / kykl.12106 .
  34. ^ Felix Ekardt : Nudging: Nudged into the catastrophe. In: The time . December 25, 2017, accessed April 10, 2018 .
  35. ↑ via Hanno Beck : Small push, big effect. Sunday Economist FAS from January 20, 2019, p. 20