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On Oct. 9, Richard Thaler of the University of Chicago won the Nobel Prize for his extraordinary, world-transforming work in behavioral economics.
In its press release, the Royal Swedish Academy of Sciences emphasized that Thaler demonstrated how nudging – or influencing people while fully maintaining freedom of choice – “may help people exercise better self-control when saving for a pension, as well in other contexts.”
In terms of Thaler’s work on what human beings are actually like, that’s the tip of the iceberg – but it’s a good place to start.
In 2008, Thaler and I wrote “Nudge,” emphasizing the massive potential of seemingly small interventions that steer people in particular directions but that also allow them to go their own way. That’s how a GPS nudges. Other common nudges include a calorie label, a reminder that you have a doctor’s appointment next week, a warning that a product contains peanuts and so-called default rules, such as automatically shifting a small percentage of your salary to a pension program unless you opt out.
Some skeptics have raised concerns that nudging can be akin to manipulation. My research shows most people disagree – and welcome nudges that help them live better lives.
A world of nudges
In the United States, the United Kingdom, Canada, the Netherlands and many other nations, officials have used nudges to implement public policies. Examples include disclosing information about the ingredients of food, providing fuel economy labels on cars, offering warnings about cigarettes and distracted driving, automatically enrolling people in pension plans, and requiring disclosures about mortgage payments and credit card usage.
AP Photo/Jacquelyn Martin
With an emphasis on poverty and development, the World Bank devoted its entire 2015 report to behaviorally informed tools, with a particular focus on nudging. Examples cited include setting defaults that encourage saving and texting reminders to help people to pay bills on time.
The reason for the mounting interest is clear: If governments can achieve policy goals with tools that do not impose high costs – while preserving freedom of choice – they will take those tools seriously.
But governments also care what citizens actually think. Do they approve of nudges?
My research, analyzed in my book, “The Ethics of Influence,” supports a single and perhaps surprising conclusion: In many nations, strong majorities favor nudges – certainly of the kind that have been seriously proposed, or acted on, by actual institutions in recent years.
My surveys show that people like mandatory calorie labels. They favor graphic health warnings for cigarettes. They approve of automatic enrollment in savings plans. In general, they like nudges that promote healthy and safety, and have no ethical complaints.
In the United States and Europe, Professor Lucia Reisch of Copenhagen Business School and I have found that this enthusiasm usually extends across standard partisan lines. In the United States, it unifies Democrats, Republicans and independents.
This is an important finding, because it suggests that most people do not share the concern that nudges, as such, should be taken as manipulative or as an objectionable interference with autonomy. By contrast, a lot of people object to mandates and bans, apparently on the ground that they limit freedom.
When nudging goes wrong
At the same time, most people reject nudges that are taken to have illegitimate goals. Nudges that favor a particular religion or political party will meet with widespread disapproval, even among people of that very religion or party.
This simple principle justifies a prediction: Whenever people think that the motivations of public officials are illicit, they will disapprove of the nudge. To be sure, that prediction might not seem terribly surprising, but it suggests an important point, which is that people will not oppose nudges as such. Everything will turn on what they are nudging people toward.
Most people also oppose nudges that they see as inconsistent with the interests or values of the people whom they affect.
If public officials nudge people to give money to a cause they dislike, citizens will disapprove. More surprisingly, they will also dislike it if officials adopt a default rule by which citizens automatically give their money to a good charity. Apparently people think that if they are going to give to charity or lose some of their money, it had better be a result of a conscious choice.
By contrast, most people favor automatic voter registration and automatic enrollment in pension plans and green energy, apparently because citizens think that those nudges are in most people’s interests.
Why we need more nudging
Simple as they are, these principles capture most people’s ethical judgments in many nations (including the United States and Europe): Nudges are acceptable, even wonderful, if they will promote people’s health, safety or welfare. They are unacceptable if they have illegitimate goals or if they would compromise the interests or values of the people they affect.
It is true, of course, that surveys cannot settle the ethical issues. We need to investigate the ethical issues in some depth. As “The Ethics of Influence” shows, that investigation requires us to investigate some big philosophical issues, involving human welfare, human autonomy and human dignity.
One of my conclusions is that if we really care about welfare, autonomy and dignity, nudging is often required on ethical grounds. We need a lot more of it. The lives we save may be our own.