Test Your Knowledge on Nudge Theory

Nudge theory is a concept in behavioral economics, decision making, behavioral policy, social psychology, consumer behavior, and related behavioral sciences that proposes adaptive designs of the decision environment (choice architecture) as ways to influence the behavior and decision-making of groups or individuals.

The nudge concept was popularized in the 2008 book Nudge: Improving Decisions About Health, Wealth, and Happiness, by behavioral economist Richard Thaler and legal scholar Cass Sunstein, two American scholars at the University of Chicago.

Nudging contrasts with other ways to achieve compliance, such as education, legislation or enforcement.

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).

There have been controversies regarding the effectiveness of nudges, with some researchers advocating for more studies and implementations of personalized nudging (based on individual differences), which appear to be substantially more effective, with more robust and consistent evidence base.

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 favor the desired outcome.

Nudging techniques aim to use judgmental heuristics to the advantage of the party that is creating the set of choices.

Nudges are small changes in the 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.

Nudge theory has been applied to government, business, healthcare, fundraising, tourism, and AI and algorithmic nudging.

Nudging is effective, but there is a moderate publication bias.

Critics argue that nudges may at times be useful, but covert nudges offer limited scope for securing lasting behavior change.

Ethicists have debated nudge theory rigorously.

Public opinion on the ethicality of nudges has also been shown to be susceptible to “partisan nudge bias.”Ethical and Social Issues in Nudging