Nudges

Question 1

Define nudges

Answer 1

Any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing economic incentives.
-Richard Thaler and Cass Sunstein (2008)

Question 2

What are the qualifications of a nudge?

Answer 2

Must be cheap and easy to avoid

Cannot be a rule of mandate

• making healthy food easy to notice =nudge
• banning junk food not a nudge

Question 3

How do nudges work?

Answer 3

Nudges use choice architecture to help people make better decisions, often by improving people’s use of heuristics.

Psychological science helps us do this:

• knowledge of heuristics - how and when they work
• understanding of choice architecture (effect of context and structure on choice)

Question 4

What are heuristics?

Answer 4

We have 2 systems for processing information.

Systematic: slow, deliberative and analytical

Heuristics: fast, automatic, short cuts in decision making (representative heuristic, availability heuristic, status quo bias, sunk cost bias, etc)

Question 5

What is choice architecture?

Answer 5

How the choice is organised.

What context it’s presented in.

Can greatly influence choices

Help people understand options, pick the best one

Question 6

What is ‘mapping’ of choices?

Answer 6

How well can people make decisions that are in their best interests?

• do people understand their options?
• link between options and outcomes?
• do heuristics lead to good choices?

How to promote good mapping:

• present info and choices clearly
• provide feedback
• provide useful default options

Question 7

Feedback in choice architecture

Answer 7

Information about good vs. bad outcomes for choices

Feedback helps

• will I be happy with this choice?
• did I even realise the choice I was making?

Question 8

Default settings in choice architecture

Answer 8

Use default settings.
-status quo bias, availability heuristic

Eg. Organ donation - “Opt out” not to be registered

Question 9

Establishing social norms in choice architecture

Answer 9

Establish social norms:
-what should I do in this situation?
Eg. Re-using hotel towels to save water

“Join your fellow guests in helping to save the environment”

Question 10

What is centrality bias/edge aversion?

Answer 10

People often avoid the edges when choosing from arrays

Question 11

Conclusions in nudges

Answer 11

We can eliminate position bias

• modify shape of array
• no edges/corners
• no basis for perceived better hiding places
• reduces eyewitnesses Identification error (instead of witness guessing off cues)
• minimal cost