A tremendous amount of effort is expended trying to get people to do things that are good for them. Many of us, however, lack the know-how or discipline when it comes to dealing effectively with challenges such as our health, finances, and the environment.
Whether it is fastening our seatbelts, conserving energy, or exercising more, people often resist doing the right thing. Two social scientists at the Universityof Chicagorecently published a book entitled Nudge: Improving Decisions About Health, Wealth, and Happiness that addresses this phenomenon.
The authors Richard Thaler and Cass R. Sunstein suggests that positive change is best accomplished by the careful design of “choice architecture” (nudging) rather than by punishing undesirable behavior. By “choice architecture” they mean the way we arrange the settings where decisions are made. For example, product placement in stores greatly influences the selections that are made. Products at eye level have a much higher probability of selling, than those we have to stoop or tiptoe to see. That is why there is such a competition for desirable shelve space.
School lunchroom managers have similarly found that they can significantly decrease the number of desserts that children choose, simply by putting them at the end of the cafeteria line or placing them on a back row rather than right out front. Creating that need for tiny additional effort is what is meant by “nudging”.
Some people see nudging as outright manipulation, but Thaler and Sunstein believe that it is possible to help people make better choices while retaining our freedoms. Unapologetic about wanting to help people become healthier, wealthier, and wise, they subscribe to a philosophy called “libertarian paternalism”. In a nutshell they believe in pushing people towards the choices they would have made anyway, if only they had sufficient wisdom, insight, or willpower.
I find this approach somewhat troublesome, as it seems presumptuous to assume that someone else knows what is best for you. It tramples on our right of self-determination, regardless of the quality of our choices. But I also have to admit that things like second-hand smoke and the governmental financial bailouts show that we are so interconnected, that other peoples’ bad decisions can easily have a devastating effect on us.
“Nudging” advocates insist they are only trying to point our decisions in the right direction, without significantly limiting our freedom of choice. They even acknowledge peoples’ right to be self-destructive, but they see no obligation to make that the easiest choice available. Also, in designing choice situations, there are unavoidable biases, so why not have them skewed in a positive direction?
One of the most powerful of nudges is setting the desired default. Default refers to what happens if the person essentially does nothing. For example businesses that automatically enroll employees in a savings plan dramatically increase plan participation, even when employees are fully informed of their right to opt out. It is just like how most of us stick with the default options on our computers and don’t change our passwords. Newsweek columnist George Will sees the power of inertia in human behavior as formidable. He believes that the opt-out approach can applied beneficially to a variety of social issues, such as increasing the number of organ donors by having it as the default option when getting a driver’s license.
People are also influenced by the way in which issues are framed. Consumers, for example, are far more likely to purchase salami that is said to be “90% fat-free” than salami that is said to contain “10% fat”. Patients even live longer if physicians present their odds of living in terms of survival rates rather than death rates.
The need to conform can also serve as an important nudge. Research shows that if we think most other people are recycling or paying their taxes, we are far more likely to do the same. Studies have shown that electricity consumption can also be pushed in either direction, depending on what information about other peoples’ usage is provided. People who are told that neighbors are using less energy, tend to decrease their usage. People who are told that others used more energy, generally do not change or even may increase their energy consumption.
Perhaps you have seen the billboards on Interstate 64 saying things like, “78% of Portlandyouth have never tried alcohol!” They come from the Portland Now Prevention Partnership’s (PNPP) social norms campaign. This campaign is designed to contradict the notion that all young people are using alcohol, tobacco, or drugs. Since young people are greatly influenced by what they think their peers are doing, the PNPP wanted to be sure that they are getting accurate information.
Finally, many issues are far too complex for us to make good decisions. Most of us do not have the requisite time or expertise to devote to the careful analysis that is required. Choosing how to distribute money in a retirement fund, picking the right insurance product, or God forbid, selecting the best Medicare Prescription plan are next to impossible tasks for most people. Psychologically we are predisposed to resort to ineffective simplification strategies— such as choosing on the basis of color, or some other irrelevant detail, just to reduced the stress.
After the recent storm flattened our car, we had to buy a new one and for us that could be an overwhelming task. Fortunately, the internet has made this, and many other tasks, simpler through what is called “expert collaborative filtering” . We eventually bought one of the top ten expert-rated midsized autos, based primarily on price and yes color. Also I noticed that window stickers on new cars give fairly detailed, but user friendly, information regarding safety and annual operating costs— a nice nudge towards preventing accidents and energy conservation.
Nudging is also prominent in today’s political arena. According to University of Oregon economist Mark A. Thoma, Democratic candiate Barack Obama and Britian’s Conservative party leader, have both shown considerable interest in the use of nudging as a means to address social issues. Without penalties, mandates, or bans, nudging techniques are governmental interventions that are usually much more palatable to voters.
And finally, you can only ignore the power of nudging at your peril, as Republican candidate John McCain discovered back when he mocked Barack Obama’s nudging suggestion that we should inflate our tires properly to increase fuel efficiency. Although it sounds laughable and trivial, optimal air pressure can actually save 3% or more on current fuel costs. Despite his initial scoffing, a chagrined McCain was eventually forced to issue a statement that he also supported proper tire inflation. As anyone who has had a baby knows, sometimes even the littlest of things can have extraordinarily big effects.