Nudge is a concept in behavioral science, political theory and behavioral economics which proposes positive reinforcement and indirect suggestions as ways to influence the behavior and decision making of groups or individuals. Nudging contrasts with other ways to achieve compliance, such as education, legislation or enforcement.
The nudge concept was popularized in the 2008 book Nudge: Improving Decisions About Health, Wealth, and Happiness, by two American scholars at the University of Chicago: economist Richard Thaler and legal scholar Cass Sunstein. It has influenced British and American politicians. Several nudge units exist around the world at the national level (UK, Germany, Japan and others) as well as at the international level (e.g. World Bank, UN, and the European Commission). It is disputed whether “nudge theory” is a recent novel development in behavioral science or merely a new term for one of many methods for influencing behavior, investigated in the science of behavior analysis.
Definition of a nudge
The first formulation of the term and associated principles was developed in cybernetics by James Wilk before 1995 and described by Brunel University academic D. J. Stewart as “the art of the nudge” (sometimes referred to as micronudges). It also drew on methodological influences from clinical psychotherapy tracing back to Gregory Bateson, including contributions from Milton Erickson, Watzlawick, Weakland and Fisch, and Bill O’Hanlon. In this variant, the nudge is a microtargetted design geared towards a specific group of people, irrespective of the scale of intended intervention.
In 2008, Richard Thaler and Cass Sunstein’s book Nudge: Improving Decisions About Health, Wealth, and Happiness brought nudge theory to prominence. It also gained a following among US and UK politicians, in the private sector and in public health. The authors refer to influencing behaviour without coercion as libertarian paternalism and the influencers as choice architects. Thaler and Sunstein defined their concept as:
A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting fruit at eye level counts as a nudge. Banning junk food does not.
In this form, drawing on behavioral economics, the nudge is more generally applied to influence behaviour.
One of the most frequently cited examples of a nudge is the etching of the image of a housefly into the men’s room urinals at Amsterdam’s Schiphol Airport, which is intended to “improve the aim”.
A nudge makes it more likely that an individual will make a particular choice, or behave in a particular way, by altering the environment so that automatic cognitive processes are triggered to favour the desired outcome.
An individual’s behaviour is not always in alignment with their intentions (termed a value-action gap). It is common knowledge that humans are not fully rational beings; that is, people will often do something that is not in their own self interest, even when they are aware that their actions are not in their best interest. As an example, when hungry, people who diet often under-estimate their ability to lose weight, and their intentions to eat healthy can be temporarily weakened until they are satiated.
Nobel Laureate Daniel Kahneman describes two distinct systems for processing information as to why people sometimes act against their own self-interest: System 1 is fast, automatic, and highly susceptible to environmental influences; System 2 processing is slow, reflective, and takes into account explicit goals and intentions. When situations are overly complex or overwhelming for an individual’s cognitive capacity, or when an individual is faced with time-constraints or other pressures, System 1 processing takes over decision-making. System 1 processing relies on various judgmental heuristics to make decisions, resulting in faster decisions. Unfortunately, this can also lead to sub-optimal decisions. In fact, Thaler and Sunstein trace maladaptive behaviour to situations in which System 1 processing over-rides an individual’s explicit values and goals. It is well documented that habitual behaviour is resistant to change without a disruption to the environmental cues that trigger that behaviour.
Nudging techniques aim to use judgmental heuristics to the advantage of the party creating the set of choices. In other words, a nudge alters the environment so that when heuristic, or System 1, decision-making is used, the resulting choice will be the most positive or desired outcome. An example of such a nudge is switching the placement of junk food in a store, so that fruit and other healthy options are located next to the cash register, while junk food is relocated to another part of the store.
Types of nudges
Nudges are small changes in environment that are easy and inexpensive to implement. Several different techniques exist for nudging, including defaults, social proof heuristics, and increasing the salience of the desired option.
A default option is the option an individual automatically receives if he or she does nothing. People are more likely to choose a particular option if it is the default option. For example, Pichert & Katsikopoulos found that a greater number of consumers chose the renewable energy option for electricity when it was offered as the default option.
A social proof heuristic refers to the tendency for individuals to look at the behavior of other people to help guide their own behavior. Studies have found some success in using social proof heuristics to nudge individuals to make healthier food choices.
When an individual’s attention is drawn towards a particular option, that option will become more salient to the individual, and he or she will be more likely to choose to that option. As an example, in snack shops at train stations in the Netherlands, consumers purchased more fruit and healthy snack options when they were relocated next to the cash register. Since then, other similar studies have been made regarding the placement of healthier food options close to the checkout counter and the effect on the consuming behavior of the customers and this is now considered an effective and well-accepted nudge.
Application of theory
In 2008, the United States appointed Sunstein, who helped develop the theory, as administrator of the Office of Information and Regulatory Affairs.
Notable applications of nudge theory include the formation of the British Behavioural Insights Team in 2010. It is often called the “Nudge Unit”, at the British Cabinet Office, headed by David Halpern.
Both Prime Minister David Cameron and President Barack Obama sought to employ nudge theory to advance domestic policy goals during their terms.
In Australia, the government of New South Wales established a Behavioural Insights community of practice.
Nudge theory has also been applied to business management and corporate culture, such as in relation to health, safety and environment (HSE) and human resources. Regarding its application to HSE, one of the primary goals of nudge is to achieve a “zero accident culture”.
Leading Silicon Valley companies are forerunners in applying nudge theory in corporate setting. These companies are using nudges in various forms to increase productivity and happiness of employees. Recently, further companies are gaining interest in using what is called “nudge management” to improve the productivity of their white-collar workers.
Behavioral insights and nudges are currently used in many countries around the world.
Lately, the nudge theory has also been used in different ways to make health care professionals make more deliberate decisions in numerous areas. For example, nudging has been used as a way to improve hand hygiene among health care workers to decrease the number of healthcare associated infections. It has also been used as a way to make fluid administration a more thought-out decision in intensive care units, with the intention of reducing well known complications of fluid overload.
Nudging has also been criticised. Tammy Boyce, from public health foundation The King’s Fund, has said: “We need to move away from short-term, politically motivated initiatives such as the ‘nudging people’ idea, which are not based on any good evidence and don’t help people make long-term behaviour changes.” Likewise, Mols et al (2015) acknowledge nudges may at times be useful, but argue that covert nudges offer limited scope for securing lasting behavior change 
Cass Sunstein has responded to critiques at length in his The Ethics of Influence making the case in favor of nudging against charges that nudges diminish autonomy, threaten dignity, violate liberties, or reduce welfare. He further defended nudge theory in his Why Nudge?: The Politics of Libertarian Paternalism by arguing that choice architecture is inevitable and that some form of paternalism cannot be avoided. Ethicists have debated nudge theory rigorously. These charges have been made by various participants in the debate from Bovens to Goodwin. Wilkinson for example charges nudges for being manipulative, while others such as Yeung question their scientific credibility.
Public opinion on the ethicality of nudges has also been shown to be susceptible to “partisan nudge bias”. Research from David Tannenbaum, Craig R. Fox, and Todd Rogers (2017) found that adults and policymakers in the United States found behavioral policies to be more ethical when they aligned with their own political leanings. Conversely, people found these same mechanisms to be more unethical when they differed from their politics. The researchers also found that nudges are not inherently partisan: when evaluating behavioral policies absent of political cues, people across the political spectrum were alike in their assessments.
Some, such as Hausman & Welch have inquired whether nudging should be permissible on grounds of (distributive) justice; Lepenies & Malecka  have questioned whether nudges are compatible with the rule of law. Similarly, legal scholars have discussed the role of nudges and the law.
Behavioral economists such as Bob Sugden have pointed out that the underlying normative benchmark of nudging is still homo economicus, despite the proponents’ claim to the contrary.
It has been remarked that nudging is also a euphemism for psychological manipulation as practiced in social engineering.
There exists an anticipation and, simultaneously, implicit criticism of the nudge theory in works of Hungarian social psychologists who emphasize the active participation in the nudge of its target (Ferenc Merei), Laszlo Garai).
In their book Neuroliberalism  the authors argue that while there is much value and diversity in behavioural approaches to government there are significant ethical issues, including the danger of the neurological sciences being co-opted to the needs of neo-liberal economics.
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Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.