Nudges

Question 1

basis for nudges

Answer 1

BE argues that we need to protect people from themselves, and that we do not always make decisions in our own best interest

BE approaches embody a line of thinking that moves away from the idea of autonomous individuals making rational decisions to an individual who’s decision process is mainly automatic and is influenced by their “choice” environment

we can either force people to do what is in their best interest or nudge them in the right direction

Question 2

sometimes forcing is necessary

Answer 2

cases of violent crime, society needs to force people

Question 3

we want to preserve freedom

Answer 3

we value the freedom of choice and the right to chose rather than to be dictated

Question 4

Libertarian Paternalism

Answer 4

Libertarian - people should be free to do what they want unless they are harming others, they should be free to choose

Paternalism - legitimate to try and influence us in a way that will make the choosers better off as judged by themselves

a nudge preserves freedom of choice, it alters behaviour in a way that is in their best interests without forbidding options

“putting fruit at eye level near a till is a nudge. Banning junk foods is not”

Question 5

Dead mans corner

Answer 5

white stripes got closer near dangerous curve to create sensation that drivers are driving fasters and so triggers natural reaction to slow down

Question 6

Mumbai’s suburban railway

Answer 6

between 2002-2012 almost 10 people a day were killed and investments into awareness did not help

• then painted reference lines on the track at appropriate places to improve judgements of speed
• meant attention was attracted to fast moving trains more quickly, leading to a 75% decline in trespassing deaths

Question 7

The Nudge Unit

Answer 7

set up by coalition agreement of 2010 in UK

aimed to find “intelligent ways to encourage support and enable people to make better choices for themselves” - Halpern

“nudge is the basic manual for applying behavioural economics to policy” - Kahneman

Question 8

Why the switch in policies to nudges

Answer 8

1. Rise of BE in particular after 2008 crisis
2. Recognition of dual processing system - TF&S
3. 2010 govt came in at a time of fiscal strain and it was a very low cost strategy
4. the ideology at the time of the gov was one of low levels of direct gov intervention through imposing rules and regulations
   - Gov set up the Behavioural Insights Team (BIT) which then became the Nudge Unit

Question 9

Potted history of the Nudge Unit

Answer 9

• started as 7 employees from inside the cabinet
• set up “sunset clause” that it was to be closed down after 2 years unless it didn’t make a 10 fold return on the cost of the team
• in 2014 it was spun out as a social purposes company, still partially owned by the UK gov
• over 200 employees now
• it’s estimated that around 136 nations have developed behavioural findings into some aspects of public policy

Question 10

Criticism 1 of Nudge Theory

Answer 10

Those that don’t believe in gov intervention:

• neoclassical economists would argue that free and competitive markets will tend towards equilibrium and that we don’t need help in making our decisions
• can we trust govs to act in the best interest of society rather than in their best interest?

“politicians, after all, are hardly strangers to the act of framing the publics chooses and rigging its decisions for partisan ends” - Nudge

Question 11

Criticism 2 of Nudge Theory

Answer 11

nudges can create an elitist approach that “degraded view of citizens being unable to shape their behaviour independently” - Hallsworth and Kirkman

Question 12

Criticism 3 of Nudge Theory

Answer 12

Nudges need to be more paternalistic:

• don’t go far enough. If we think something is bad for us, then why nudge, just ban it
• are nudges just an excuse for govs not taking decisive action
• certainly in the case of the environment theres a strong argument that nudges aren’t enough
• are nudges manipulating people

nudges that rely on the automatic system 1 may actually reduce inequality as opposed to nudges which rely on the reflective system 2 (which rely on providing attitudes to change attitudes and beliefs)

• nudges often take away decision making from us and therefore deny us any opportunity to change and learn from our mistakes

in effect it infantilises and disempowers individuals

• risk of slippery slope and that this leads to a reduction of freedom over time

Question 13

who monitors the nudgers?

Answer 13

• those that want to preserve freedom of choice

Question 14

What can we do as a framework for a nudge policy?

Answer 14

Rawls’ publicity principle:

all gov interventions would be made public whether at time of intervention or later

Question 15

will nudges lose their effectiveness over time?

Answer 15

• various studies have shown that social norms can be effective, but if we continuously hear things like “9/10 people do this” it will wear off
• if the message is too widely used and perhaps used inconsistently it will filter out (not for things like changes in defaults however)
• can design something that will repeatedly prompt a behaviour and create a habit (e.g consistent prompts to go to the gym)

Question 16

Nudges not a panacea

Answer 16

should not become a panacea for improving healthy eating and other health issues but should form part of policy makers tool box

e. g sugar tax in 2018 in UK has been extremely effective in reducing sugar in our drinks
- main reason is that it provided an incentive for businesses to reduce the amount of sugar in their products and also created tax revenues

similarly the plastic bag tax motivates people to save 5p by bringing a bag instead of paying 5p for one

Question 17

Nudges need to be seen in context

Answer 17

we need to provide a balance to the private sector who are constantly phishing us for pfools

• what will work in 1 country won’t necessarily work in another
  e. g letter by HMRC in UK focused on social norms and that “other people in your neighbourhood pay their taxes on time” worked well but in Poland recipients responded much more to “stronger and threatening language”