guest lecture - nudge

nudge

a subtle change in environment that alters behaviour without restricting options or significantly changing incentives

where did the nudge theory come from

economics and psychology

work on biases and heuristics revealed that humans often rely on mental shortcuts

mechanisms of nudge theory

default and framing effects

loss aversion

social norms

salience/priming

default effect

we stick with whatever is already chosen for us

e.g. automatically opted out of organ donation

framing effect

we make decisions depending on how the information is worded

e.g. emotional tone of a message can change our behaviour

loss aversion

we hate losing more than we like gaining

e.g. not dropping a class because you’ve invested time in it

social norms

we do whatever we think other people are doing

salience/priming

we choose whatever is most noticeable, prominent, mentally accessible

e.g. eye level is buy level

nudges don’t always work

effects are usually small except for default effect

mostly target system 1, lose power when in system 2

we are resistant to nudges when we detect manipulation

can be overriden by habits, cultural factors

work best for simple decisions

boomerang effect

social norm nudges can backfire because we may reduce our good behaviour when we realize we’re already better than avg

behavioural fatigue/habituation

we can habituate to nudges and experiences