Nudge theory

Nudge theory

Nudge: what’s it all about?

It’s where economics meets psychology. Mainstream economics treats humans as if they are smart and always clear about their own interest. Trouble is, we aren’t like that: we eat too much and drink too much (sometimes at the same time) and we don’t hit the gym or save enough. Nudge suggests ways in which we can do the right thing.

How does it work?

Rather than leave people to their own devices, or give them dos and don’ts, Thaler and other behavioural economists want to highlight the best option, while still leaving all the bad ones open. They argue it’s better for everyone to be automatically enrolled in a pension scheme (or more controversially for organ donation), but give them an opt-out. Or they may want a shop to put real oranges by the checkout rather than chocolate versions.

Where has it been tried?

American firms are signing up to Thaler and Sunstein’s idea of Save More Tomorrow, where workers are automatically enrolled into a savings scheme; contribution go up in line with pay. Gordon Brown is introducing something similar here.

Aren’t there drawbacks?

Yes, if you take exception to being ‘nudged’ into what to do by bureaucrats, however well-intentioned. You may not trust politicians or civil servants to do the right thing. Alternatively, you may think ‘nudging’ is not enough, when tackling climate change, say, or knife crime.

  1. Nudge theory back in fashion with Tories | Politics | guardian.co.uk

    Author Richard Thaler shares platform with David Cameron to apply thinking to monitoring market.
    http://www.guardian.co.uk/politics/blog/2009/mar/24/nudge-conservatives – 134k –Cached – Similar pages
    More results from www.guardian.co.uk »

  2. Richard Thaler’s Nudge Theory – Where Economics Meets Psychology 

    Richard Thaler’s Nudge Theory – Where Economics Meets Psychology. Mainstream economics treats humans as if they are smart and always clear about their own 
    bx.businessweek.com/behavioral-finance/…nudgetheory…/ 9922954792410009828-88fca6a5acd9e8d007145… – 29k – Cached – Similar pages

  3. Nudge Theory – Official Site – Business Exchange

    Nudge Theory – Official Site. Richard Thaler and Cass Sunstein’s book on how psychology impacts (and sometimes foils) the best intentions of economics and 
    bx.businessweek.com/behavioral-finance/nudgetheory…/ 12140528132533508747-f5b17373345bffc0879e… – 26k – Cached – Similar pages

  4. [PDF] 

    NUDGING US INTO THE THIRD WAY?

    File Format: PDF/Adobe Acrobat – View as HTML
    8 Oct 2008  So when the government intervenes by way of nudging, it  Richard H Thaler and Cass R Sunstein, Nudge: Improving Decisions about Health, 
    http://www.nzbr.org.nz/documents/speeches/Nudging%20Us%20Into%20the%20Third%20Way.pdf – Similar pages

  5. Geary Behavioural Economics Blog: Barnet to trial “nudge” theory

    Barnet to trial “nudge” theory. “A London council is to pilot policies based on a new theoryof behavioural economics in a bid to tackle litter, 
    gearybehaviourcenter.blogspot.com/2008/08/barnet-to-trial-nudgetheory. html – 110k –Cached – Similar pages

  6. Amazon.com: Nudge: Improving Decisions About Health, Wealth, and 

    Authors Thaler and Sunstein Discuss “Nudge” at Their Regular Lunch Spot ….. But this volume is about more than modelling and mere theory
    http://www.amazon.com/Nudge-Improving-Decisions-Health-Happiness/dp/ 0300122233 – 345k –Cached – Similar pages

  7. Turbulence Ahead: NudgeNudge

    The book contains lots of other examples of Nudge in practice – and the potential for Nudgein theory. The Nudge blog, by the way, 
    http://www.turbulenceahead.com/2008/04/nudgenudge.html – 80k – Cached – Similar pages

  8. BBC NEWS | Programmes | The Westminster Hour | Nudge theory

    17 Aug 2008  How amenable are politicians to ideas from academics?
    news.bbc.co.uk/2/hi/programmes/the_westminster_hour/7566995.stm – 39k –Cached – Similar pages

  9. Full Coverage: Nudge theory back in fashion with Tories

    Full Coverage: Nudge theory back in fashion with Tories.
    http://www.newstin.co.uk/rel/uk/en-010-012353374 – 15 hours ago – Similar pages

 

 

 

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