And what? What's the other choice? To passively let things happen and then say: "Tut-tut, what at botch that was"? Don't we all manipulate people? Even if we openly ask them to make a choice, don't we try to frame it so they'll chose as we think they should?
Countries all around the world, starting with the U.K., have started behavioural insight teams, often referred to as nudge units. And they seem to be doing lots of good.
I practice what has come to be called behavioral economics.
It is true that I am one of the co-authors of 'Nudge,' and I am a behavioral economist, but it does not mean that everything we write about in that book is behavioral economics, nor does it mean that my co-author, the distinguished legal scholar Cass Sunstein, is a behavioral economist.
A nudge is some feature of the environment that changes the behaviour of humans but would not change the behaviour of rational economic agents, what we call Econs.
If you're presented with choices that steer you toward your worst instincts, that's what you'll choose. If I'm presented with Snickers bars, I won't necessarily seek out kale.
So, what's a nudge? A nudge is some small feature of the environment that attracts our attention and alters our behavior.
Make it easier to do things that increase your wellbeing before you have to make a choice because a lot of our choices, though they seem small in the moment, have a big effect.
If we all make systematic mistakes in our decisions, then why not develop new strategies, tools, and methods to help us make better decisions and improve our overall well-being? That's exactly the meaning of free lunches- the idea that there are tools, methods, and policies that can help all of us make better decisions and as a consequence achieve what we desire-pg. 241
One of the big lessons from behavioral economics is that we make decisions as a function of the environment that we're in.
I'm all for empowerment and education, but the empirical evidence is that it doesn't work. That's why I say make it easy.
In the world of traditional economics, it shouldn't matter whether you use an opt-in or opt-out system. So long as the costs of registering as a donor or a nondonor are low, the results should be similar. But many findings of behavioral economics show that tiny disparities in such rules can make a big difference.
People still have a choice, but, if they find it all too confusing, or they just want someone else to make a choice for them, there's a default that works pretty well. That's this concept of libertarian paternalism. And it's handy.
I don't believe in good human beings, but I believe you can have structures that make it easier to make the right choice or the wrong choice.
Whenever I'm asked to autograph a copy of 'Nudge,' the book I wrote with Cass Sunstein, the Harvard law professor, I sign it, 'Nudge for good.' Unfortunately, that is meant as a plea, not an expectation.
In psychology and behavioral economics, people have shown that if you just describe options in a certain way, or make some features of a situation salient, you can get people to do and even see what you want. You don't have to be a Jedi to manipulate people's attention.
Default choices often remain unchanged for no reason other than being the default, either because of this lack of information or humans' status quo bias.
