Nudging

Definition and delimitation

Nudging is the instrumentalisation of small changes in the structure of a decision-making situation (so-called nudges) that lead to individuals changing their behaviour and decisions in a predictable way ^[1]. The central point is that no decision alternatives are prohibited or excluded and the economic incentives of the alternatives are not significantly changed ^[1]. In addition, nudges should always modify human behaviour in a way that increases the welfare of the individuals concerned ^[1].

The principle of nudging is based on findings from psychological and behavioural economics research, which has shown that in many situations people do not behave in accordance with the predictions of rational economic theories ^[2]. Instead, they often use so-called heuristics to make decisions. These are mental shortcuts or rules of thumb that enable faster decisions but are also susceptible to cognitive biases ^[2]. These cognitive biases can lead to suboptimal behaviour and economically irrational decisions. Nudges exploit these heuristics and biases to systematically change behaviour ^[1].

A typical example of a nudge that exploits a cognitive bias is the so-called default nudge ^{[1, 3]}. It refers to the situation where a choice is pre-selected in a decision-making situation and people have to actively decide against this option so that it is not implemented. Since people tend to prefer the status quo to change, they often opt for the pre-selected option ^[4]. This phenomenon can explain, for example, the huge differences between organ donation rates in different countries ^[5]. In countries where citizens are registered as organ donors by default and have to actively choose not to donate, the proportion of people who agree to organ donation is significantly higher than in countries where people have to actively choose to donate and are not organ donors by default ^[5].

Since a growing proportion of our everyday life and thus also of our decisions take place in digital environments (see e.g. digital economy), nudges are also increasingly digitalised and used, for example, on the internet or on mobile devices such as smartphones. Digital nudging relies in particular on adjustments to the user interface ^[6].

History

The theoretical foundations of nudging were laid in the 1970s by the pioneering work of Amos Tversky and Nobel Prize winner Daniel Kahneman. Building on these insights into heuristics and biases, Nobel laureate Richard Thaler was instrumental in the development of nudge theory and, together with Cass Sunstein, presented it to the general public in 2008 with the publication of their book Nudge: How to Instigate Smart Decisions (original title Nudge: Improving Decisions About Health, Wealth, and Happiness). Since then, more and more companies and governments around the world have been using Nudges.

Application and examples

Nudging is used in many ways to control human behaviour. In addition to the example of organ donation already mentioned, nudging is also used to encourage people to eat healthier and exercise more ^[7] and to exercise more ^[8]. Food labels such as the Nutri-Score food traffic light, or fitness trackers and smart wear ^[8] or fitness trackers and smart wearables.

While nudges in these areas aim to improve the lives of nudged individuals, there are also more controversial uses of nudging in marketing that aim to increase company sales and deliberately disregard the real preferences of consumers ^[9].

Criticism and problems

Because nudges have the potential to target human behaviour and influence decisions, a lively debate has developed about the ethical basis of nudging ^{[10, 11]}. Two main criticisms are:

• Because nudges and their influence are often not noticed by the individuals concerned, they are restricted in their freedom of choice and manipulated in their decisions ^{[10, 11]}. The nudged behaviour therefore does not necessarily reflect the individuals’ own preferences, but the strategies of the decision architects ^[12].
• It is impossible for nudging institutions to anticipate individuals’ preferences and adjust decision architecture and nudges accordingly. Therefore, it is not possible per se that nudges are always in line with the preferences of the nudged individuals. On this basis, nudges can be assessed as patronising ^[13].

In response to these criticisms, various approaches have been formulated on how to make nudging more ethical, such as increased transparency regarding the presence of nudges and their potential effects ^[11].

Research

Research on nudging is being conducted in the bidt-funded junior research group on “Digital Technologies and Human Behaviour”.

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