Beware the Nudge

Nudge theory lives within the world of libertarian paternalism. Libertarianism is about freedom of choice. Paternalism is about somebody deciding what is best for you.

Nudge lives in places of default opt-in/opt-out where, if the default is opt-in, you must choose to opt-out. The best example is from Austria where you are automatically an organ donor unless you deliberately opt-out. The second-best example is found in public urinals where the life-sized image of a housefly is baked into the enamel surface. Gentlemen may choose to opt-out. They are nudged – not compelled – to opt-in.

The concept works like this: Someone decides that an identifiable group is not doing what we want them to do. Absent the power to enforce or the will to legislate, the next step is to find a nudge that will induce the desired behaviour in the target population while at the same time offering the target a choice. In the private sector the goal is to reduce cost or increase revenue. In the public sector the goal is to improve compliance without the expense of enforcement. A nudge should overcome an existing behaviour without compulsion – offer freedom of choice but nudge towards the desired outcome. Libertarian and paternalistic.

Nudge lives in those credit/debit terminals where you are offered choices for a tip. When your government sends you a tax notice and reminds you that everyone else pays on time. At the supermarket check-out when you are offered the choice of reusable or plastic or paper bags. When you are offered an extended warranty. Nudge lives in the design of airports and supermarkets, and in the placement of goods on shelves.

These nudges are designed to get non-tippers to tip, to collect on time from those who have a history of late payment, to contain those who cannot contain themselves, to appear good by being green, to sell more product, and to reassure the consumer. Opt-in/opt-out has many examples – most ubiquitous is probably electronic invoices but, in my opinion, it underlies all of the nudges.

Society was once really good at nudging. At one time, people knew how to line up. They were nudged into line by the example of others. At one time, the procrastinator was nudged to mow or shovel merely by the example of his neighbours. There was a time when garbage went into garbage bins. There was a time when all men – gentle or not – wore suits.

Have we been subject to nudges from political parties and their candidates? Of course, we have. We are the party of new, progressive, green, liberal, democrat, conservative, nationalist, labour. Join us and be new, progressive, green, liberal … etc.

Beware the nudge.

Stuart Syme