Nudge: A Brief Note

Updated: June 5

#1 There is no neutral design & the context in which people make decision is always organized. (choice architecture)

>> if there are always choices that direct people to different directions, why not design good ones?

>> (libertarian paternalism) highlight people's freedom of choice (no blocked or burdened), but guide peoplel to the beneficial course of actions.

#2 false assumption is that people make a choice in their best interest most of the time (or better than choices made by someone else)

>> people don't

#3 Econs:Humans = more reflective:more automatic

Automation System (system 1): uncontrolled, effortless, associative, fast, unconscious, skilled

Reflective system (system 2): controlled, effortful, deductive, slow, self-awareness, rule-following

Humans are prone to irrational behaviors when choices are rare, complex, and lacks immediate feedback.

#4 About Humans:

anchoring: existed information influences one’s choices

Ex: charity with $100, $250, $500, $1000 options gets more money than those with $50, $75, $100, $200

availability: personal accessibility influences one' choices

Ex: homicides more available than suicide

representativeness: automatic system on stereotype

Ex: 7-foot African American s\is likely to be a basketball player

optimism and overconfidence: pervasive feature of humans

Ex: 94% professors at large uni believe they're above average

status quo bias: 'yeah, whatever' bias

Ex: magazine subscription or carryover effect of TV viewing

framing: use of language effects ppl's choices

Ex: not "out of 100 patients who have this operation, ninety are alive after 5 years," but "..., ten are dead after 5 years">> ppl opt to do the operation in the 1st case.

#5 Resisting temptation (nudges) - interesting cases:

mental accounting: avoid money as fungible means

Ex: put money in pre-labeled jars with a rule that money from one jar cannot be transferred to other jars>> control spending

gamblers put the money they win (house's money) to different pockets from where their money is put.

following the herd: influence from the outside

Ex: obesity is contagious; teenage girls who see other teenage girls are having children are more likely to become pregnant themselves.

Priming: when ppl are asked what they intend to do, they often act according to their answers

Ex: ask ppl if they go out for voting the day before the election increases the number of votes

#6 Libertarian paternalism encourages policymakers and private companies to use choice architecture (the way choices are structured and presented) to create "nudges," subtle hints, or influences that direct people toward the most beneficial choice.

>> 6 principles:

1. iNcentive

2. Understanding mappings (ppl don't know how to map what they need to the right product because it is too complex like choosing a credit card)

*RECAP (Record, Evaluate, Compare Alternative Prices)

3. Defaults

4. Give feedback

5. Expect error

6. Structure complex choices

# 7 Case studies:



Link: Nudge in Book Collection