A Limitation on Nudges

“Rare, difficult choices are good candidates for nudges,” write Cass Sunstein and Richard Thaler. Throughout their book Nudge, Sunstein and Thaler try to encourage limitations on nudges. They acknowledge that anytime people are in a position to influence decision-making by determining how choices are designed and structured, they will be providing people with nudges, regardless as to whether their nudges are deliberate or inadvertent. However, the authors don’t encourage people to step beyond nudges and truly limit people’s choices or prevent them from making decisions, even if those decisions are ones the individual would deem bad for themselves.

 

Nudges are helpful in rare and difficult choices because we are likely to make mistakes in those areas. We don’t make large investment decisions on a regular basis, we only enroll in healthcare plans once a year (and usually we just let ourselves roll into the same plan as last year), and we hopefully never have to make major life altering medical decisions. When we don’t get immediate feedback on a decision, when we don’t have an opportunity to practice and improve decision making in certain contexts, then we are likely to make mistakes. We won’t use appropriate discount rates, we will be influenced by irrelevant factors, and we will not consider all of the necessary information when making our selection. Nudges can help overcome all of these factors.

 

But we don’t necessarily need direct nudges in every decision situation, and we don’t need people to go beyond nudges and actually limit choices in most of our decisions. Buffets can nudge us by placing salad at the front of the line, so that we load our empty plate with more salad and have less room to pile on the tri-tip at the end of the line. This can be a useful strategy for buffets to save money by encouraging people to eat cheap fillers and could be a useful strategy for school cafeterias to encourage more healthy eating. But placing tri-tip under a cover that requires that we press a lever with one hand and open the lid with a second hand is beyond a reasonable nudge. Sunstein and Thaler believe that nudges should be easy to avoid or bypass for those determined to make their own choices, even if it isn’t what is generally understood to be in their best interest. A limitation on nudges, in the authors view, is a good thing, and helps protect nudges for situations where they are truly helpful and meaningful.

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