Deprecated: Hook jetpack_pre_connection_prompt_helpers is deprecated since version jetpack-13.2.0 with no alternative available. in /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/functions.php on line 6078 Warning: Cannot modify header information - headers already sent by (output started at /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/functions.php:6078) in /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/rest-api/class-wp-rest-server.php on line 1831 Warning: Cannot modify header information - headers already sent by (output started at /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/functions.php:6078) in /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/rest-api/class-wp-rest-server.php on line 1831 Warning: Cannot modify header information - headers already sent by (output started at /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/functions.php:6078) in /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/rest-api/class-wp-rest-server.php on line 1831 Warning: Cannot modify header information - headers already sent by (output started at /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/functions.php:6078) in /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/rest-api/class-wp-rest-server.php on line 1831 Warning: Cannot modify header information - headers already sent by (output started at /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/functions.php:6078) in /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/rest-api/class-wp-rest-server.php on line 1831 Warning: Cannot modify header information - headers already sent by (output started at /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/functions.php:6078) in /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/rest-api/class-wp-rest-server.php on line 1831 Warning: Cannot modify header information - headers already sent by (output started at /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/functions.php:6078) in /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/rest-api/class-wp-rest-server.php on line 1831 Warning: Cannot modify header information - headers already sent by (output started at /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/functions.php:6078) in /hermes/bosnacweb04/bosnacweb04ay/b1602/nf.whysel/public_html/decisionfish.com/wp-includes/rest-api/class-wp-rest-server.php on line 1831 {"id":2134,"date":"2017-04-17T15:00:12","date_gmt":"2017-04-17T19:00:12","guid":{"rendered":"http:\/\/www.decisionfish.com\/?p=2134"},"modified":"2022-08-01T10:46:36","modified_gmt":"2022-08-01T14:46:36","slug":"nudge","status":"publish","type":"post","link":"https:\/\/www.decisionfish.com\/nudge\/","title":{"rendered":"Nudges: For Your Own Good?"},"content":{"rendered":"
Nudges are low-cost, low impact, often clever interventions by government, businesses and other organizations to \u201calert, remind or mildly warn\u201d<\/b> people when they are making decisions.<\/b>[1]<\/a> <\/b> Nudges can be subtle\u2014sometimes too subtle\u2014techniques to get people to make decisions either better for them or for the organization doing the nudging. As consumers, employees, voters and humans we need to understand how nudges work to maintain control of our decisions and our destinies.<\/b><\/p>\n Governments and some companies design nudges to improve people’s health, safety, finances, job performance and environmental footprint. Such interventions have been justified by the claim that, without them, people will tend to make decisions colored by cognitive biases<\/a>, behavioral weaknesses (e.g. procrastination and inattention) or noise<\/a> (distractions and inconsistencies), which they\u2014and society\u2014later regret. A ‘good’ nudge will be transparent, easy to opt-out of, good for our welfare and cost-effective based on hard evidence.<\/b>[2]<\/a> The policy of creating good nudges has been dubbed “Libertarian Paternalism<\/a>.”<\/p>\n On the other hand, some organizations have also used nudges in advertising, e-commerce, social media campaigns, app design and more to increase profits, employee productivity and for other purposes, which may or may not contribute to the nudgee’s welfare. Such nudges may not be transparent or easy to opt-out of (TurboTax asks three times whether I wouldn’t really rather pay $45 for their audit defense product).<\/p>\n Organizations create nudges by leveraging many of the same biases and weaknesses that can cause bad decisions in the first place.<\/b> They carefully engineer the choice architecture<\/a> and framing <\/a>of decisions that people face. This can include adjusting incentives (first month free!), setting defaults (opt-out vs. opt-in) and offering feedback (are you sure you want to cancel your subscription?). Here are some examples and the biases they exploit:<\/p>\n <\/p>\n <\/p>\n Done right, nudges can be low-cost, low-impact ways to help people make better decisions for their benefit<\/i> while they retain the liberty to chose what may not be best for them. On the other hand, nudges can have significant drawbacks. <\/strong>They may:<\/p>\n Government intervention is more likely to amplify the cognitive biases of regulated individuals than to correct them. \u2014 Pierre Lemieux, The Economics of Political Balderdash<\/a><\/p><\/blockquote>\n In sum, nudges are small adjustments in the context of our decision-making, created by organizations, to influence our choices and to promote certain agendas. Ideally, the goal is to improve the welfare of the nudgee. But several of the examples we provide show this is not always the case. Of course, nudges are nothing new<\/strong>: marketers, politicians<\/a> and parents <\/a>have used carefully designed techniques for generations. What is new are the advances in data-science, artificial intelligence, user experience design<\/a>, psychology and behavioral economics that make nudges more effective and widespread. Will our capacity for empathy, humility, ethics and plain common-sense keep pace?<\/p>\n Did you like what you\u2019ve read? Forward this to a friend using the share buttons below. Sign up<\/a> for email updates and follow @decisionfish<\/a>. Take a sneak peek at our upcoming financial wellness app<\/a>. Do you work at a company that does not yet offer financial wellness tools to employees but should? Please, let us know<\/a>!<\/p>\n Thanks!<\/p>\n <\/p>\n References<\/strong><\/p>\n [1] To No Avails<\/a><\/span><\/p>\n [2] Thaler, R. H., & Sunstein, C. R. Nudge: Improving Decisions About Health, Wealth, and Happiness.<\/a><\/p>\n [3] Progressive\u2019s Snapshot: The behavioral economics of PAYD auto insurance<\/a><\/span><\/p>\n [4] Predictably Irrational: The Hidden Forces That Shape Our Decisions<\/a>\n
\n
\n
\n
\n
\n
\n
\n
\n
Our Ask<\/h3>\n
\n
\nby Dan Ariely<\/a><\/p>\n