Nudge planning

Background: bad lifestyle habits, rationality, and ‘choice architecture’

One of the most compelling reasons for promoting more explicit conversations about planning for wellbeing is that there is now a tide of evidence showing that many of us behave in ways that we know aren’t in our best interests. If, as individuals, we are far from ideal pursuers and promoters of wellbeing, perhaps we can do better together, by agreeing to plan in ways that ‘nudge’ people towards decisions that are better for their wellbeing and for that of other people. There is also lots of evidence that in many aspects of our daily lives, this is achievable if the ‘choice architecture’ makes it easier for us to choose wisely.

Traditionally, economists have proceeded on the heroic assumption that people’s decision-making is ‘rational’ in terms of making the best use of available knowledge to allocate scarce resources to pursue their interests. We all, including economists, have always known this isn’t true.

But behavioural economic researchers, together with psychologists, have in recent decades provided a much stronger empirical evidence base for appreciating how everyday irrationalities are both more prevalent and more systematic than most people imagine.

One of the most compelling reasons for promoting more explicit conversations about planning for wellbeing is that there is now a tide of evidence showing that many of us behave in ways that we know aren’t in our best interests. There is also lots of evidence that in many aspects of our daily lives, we can be ‘nudged’ towards decisions and behaviours that are more in our own interests, if the ‘choice architecture’ makes it easier for us to choose wisely.

Traditionally, economists have proceeded on the heroic assumption that people’s decision-making is ‘rational’ in terms of making the best use of available knowledge to allocate scarce resources to pursue their interests. We all, including economists, have always known this isn’t true. But behavioural economic researchers, together with psychologists, have in recent decades provided a much stronger empirical evidence base for appreciating how everyday irrationalities are both more prevalent and more systematic than most people imagine.

In favour of nudges

The highly influential book Nudge, by Thaler and Sunstein (2009), presents a set of persuasive arguments for using this understanding to address irrationalities by modifying ‘choice architecture’, designing procedures, default options and environments that are likely to result in people making choices that are better for their wellbeing. This is based on experimental research and practical case studies, and in effect they are advocating ‘soft paternalist’ approaches to wellbeing promotion.

Criticising and questioning nudges

Critics and doubters argue that there are potentially sinister elements to these approaches. Implicitly, the whole idea of ‘nudge’ policies encourages governments, bosses, and anyone in a position of influence to play surreptitious mind games with citizens and employees. While there is no shortage of evidence concerning the fairly direct benefits of nudges, the longterm socio-political costs and risks of normalising clandestine persuasion are far more uncertain and debatable. How much transparency and freedom should we forego in order to allow other people to make our lifestyle decisions for us?

Further reading:

Thaler, Richard H., and Cass R. Sunstein (2008) Nudge: Improving Decisions About Health, Wealth, and Happiness. Yale University Press

Jones, Rhys, Jessica Pykett, and Mark Whitehead [eds] (2013) Changing Behaviours: On the Rise of the Psychological State. Cheltenham, UK: Elgar

Saint-Paul, Gilles (2011) The Tyranny of Utility: Behavioral Social Science and the Rise of Paternalism, Princeton, NJ, Princeton University Press

Oliver, Adam (2013) Behavioural Public Policy. Cambridge: Cambridge University Press