5 - Nudges

Question 1

Sunstein

Answer 1

Nudges are interventions that steer people in particular directions but that also allow them to go their own way.

Question 2

Goynes et al

Answer 2

In many countries, behavioural science has become fundamental to policy choices in areas that include consumer protection, health care, environmental protection, tax policy, poverty, retirement and much more. The European Commission has been a front-runner in applying behavioural insights to its policy making over the past decade.

Question 3

Halpern and Sanders 1

(UK BIT)

Answer 3

• “Nudge units” within governments, most notably in the United Kingdom and the United States, seek to encourage people to behave a certain way by using insights gained from behavioural science.
• The aim is to influence people’s choices through policies that offer the right incentive or hurdle so that people choose the more economically beneficial options. Getting people to save for retirement, eat more healthful foods, and pay their taxes on time are some examples of institutionally desirable activities.

Question 4

Halpern and Sanders 2

Answer 4

• The 10-fold rise in “nudge” projects undertaken since 2010— more than 20 countries have deployed or expressed interest in them—have revealed many lessons for policymakers. Chief among these lessons: the necessity of obtaining buy-in from key political leaders and other stakeholders, and the benefits of testing multiple intervention strategies at once. Although detailed cost–benefit analyses are not yet available, estimate that behaviourally inspired interventions can help government agencies save hundreds of millions of dollars per year.

Question 5

Halpern and Sanders 3

(UK BIT)

Answer 5

• Attempts over the last decade to bring behavioural science out of the laboratory and into the world of policy have produced many lessons.
• Policymakers seeking to create “nudge units” within their own government or other public bodies are advised to pay heed to the following necessary components that can be summarised in the simple mnemonic of APPLES.

Question 6

Halpern and Sanders 4

(UK BIT)

Answer 6

APPLES

Administrative support
(Ensure you have senior level buy-in)

Political support
(Consider how approach fits with political narrative and instincts of government concerned)

People
(Team with right mix of skills and expertise)

Location
(Office proximity to people you wish to work with)

Experimentation
(Embrace empirical methods)

Scholarship
(Know behavioural literature and challenges you’ll face).

Question 7

Halpern and Sanders 5

(UK BIT)

Answer 7

Nudging impacts in UK and US

• Behavioural scientists can certainly claim their interventions have touched the lives of
  tens of millions of people.
• Changes in pension saving rules are perhaps the most obvious behaviourally inspired intervention on both sides of the Atlantic in the last decade.
• UK e.g.
  Change to opt-out saving for workplace pensions (from 2012, starting with larger employers).

Impact: 5.4 million extra savers enrolled by Aug 2015, before extension to smaller firms.

Question 8

Baldwin

(UK BIT)

Answer 8

David Cameron set up a Behavioural Insights Team (BIT or Nudge Unit) as centre of UK government in 2010 to foster alternatives to traditional regulation and to move towards less-restrictive and low-cost controls of behaviour.

Question 9

Baldwin

(3 degrees)

Answer 9

1) Respect decision-making autonomy of individual & enhance reflective decision- making.

2) Typically builds on behavioural/volitional limitations so as to bias a decision in desired direction.

3) Offers yet a more serious intrusion on autonomy because it involves behavioural manipulation to an extent that other nudges do not.

Question 10

Baldwin

(Limitations of Nudge)

Answer 10

• Nudge’s strategies of aiming to achieve results by focusing on the decision-making of the individual. Such a focus may fail to address causes of or provide solutions to many problems. (E.g. obesity - may be seen by nudgers as result of an accumulation of poor individual decisions, but omits a host of biological, social and cultural causes of obesity).
• Individually targeted nudges will not always prove effective when the undesirable behaviour at issue is the product of collective processes and policies.
• Second limitation varies across degrees. Individuals’ responses to nudges will differ across divergent institutional, social, economic and cultural contexts. (E.g. nudge to encourage recycling may not work as well in a disadvantaged community as in an affluent district).
• Nudges are also prone to unintended consequences, and waterbed effects.