Motivation and emotion/Book/2024/Nudge theory

Nudge theory:
What is nudge theory and how is it used to motivate behaviour change?

Overview

Case study: The fly in the urinal (Figure 1)

Behavioural nudging focuses on subtly guiding an individual choice without restricting options or significantly changing incentives.

In 1999, Amsterdam's Schiphol Airport implemented a highly effective yet simple behavioural nudge in men's toilets by introducing an image of a fly etched near the drain of urinals (Figure 1). The goal was to reduce spillage and improve cleanliness in the restrooms. The design is an example of how small environmental cues can lead to significant changes in human behaviour, without the need for overt instruction or costly enforcement mechanisms.

The fly etching was placed near the drain of each urinal, encouraging men to aim for a specific spot. This design gave individuals a clear focal point, subtly influencing their behaviour. The simplicity of this intervention is key to its success, and a key element of nudge theory. It didn't need rules or instructions, just a visual target to promote precise actions.

The airport's management reported a notable reduction in spillage around the urinals, leading to cleaner restrooms and less need for maintenance. The initiative was cost-effective and easy to implement, demonstrating how even small changes in the environment can have a large impact on human behaviour (Marcano‐Olivier et al., 2019).

Nudge theory, a psychology concept derived from behavioural economics proposes that subtle environmental changes can influence behaviour or decision-making of groups and individuals. The theory suggests that by doing so, desirable outcomes can be achieved without limiting an individual's freedom of choice. The theory was popularised in Richard Thaler and Cass Sunstein's 2008 book Nudge: improving decisions about health, wealth, and happiness. Nudge theory offers a powerful tool for shaping behaviour in health, wealth, and happiness domains by focusing on small changes.

Nudge theory's subtle influence promotes behavioural shifts across a range of diverse settings. This chapter delves into nudge theory's mechanics and applications, while examining how this powerful tool shapes choices and actions to motivate behaviour change.A "nudge" is a small, often unnoticed change in the environment that influences people’s behaviour in a predictable way.

Focus questions:

What is nudge theory, and how does it differ from traditional methods of influencing behaviour?
Which psychological principles underpin nudge theory?
In what ways has nudge theory been applied, and what are some examples of success?
What criticisms have been levelled against nudge theory?
What are the ethical considerations surrounding the use of nudges?

Fundamentals of Nudge Theory

Thaler and Sunstein [year?] proposed that people can be "nudged" towards better decisions by altering the way and method that choices are presented to them. Unlike traditional methods of behaviour modification (such as mandates, penalties, or financial incentives), nudge theory suggests individuals can be gently guided without restricting their options.

Origins and development

Cognitive psychology, heuristics, and biases are foundational to nudge theory. This branch of psychology explores and examines how mental processes shape behaviour. It highlights on [awkward expression?] humans' natural tendency to rely on mental shortcuts for swift decision-making. Nudge theory is closely related to behavioural economics, suggesting biases and irrationality often sway human choices. It challenges the idea that humans make purely rational, self-interested decision-making; instead providing a nuanced view of human behaviour (Gradinaru, 2014). By leveraging psychological insights, nudge theory offers a framework for understanding and influencing complex human decisions.

Nudge theory has gained popularity worldwide and is often used to shape public policy across countries such as Australia, the United States and the United Kingdom. Governments and organisations have adopted nudging techniques to encourage behaviours that benefit society, such as increasing savings rates, improving public health, and reducing energy consumption (Congiu and Moscati, 2021).

Key concepts

Central to nudge theory is the concept of libertarian paternalism (Lin et al., 2017), which suggests that it is possible to guide individuals toward beneficial choices while still preserving their freedom of choice. This theory allows policymakers and businesses to nudge people in a direction deemed beneficial without coercion as nudge theory instead uses cognitive biases. These are natural human tendencies, which can lead to poor decisions based on processing information in a selective way. Examples of these biases include overconfidence, loss aversion, and anchoring. By understanding these biases, nudges can be designed to encourage better choices.

As suggested by Kuyer and Gordijn (2023), effective nudging techniques can include:

Default settings, like auto-enrolling employees in retirement plans with an opt-out option,
Strategic placement of products or information to attract attention, and
Social proof, where people are influenced by the actions of others.

Applications of nudge theory to motivate change

Nudges can be used across a range of scenarios and is used in many countries in the world, from public health to environmental conservation. Nudging uses psychology, like default settings and placement, to steer people to better choices. Nudges can address public health challenges without limiting choice and are aimed at getting people to act in their own interest.

Healthy eating initiatives

Another area where nudging has shown positive effects is in promoting healthy eating habits. Supermarkets and cafeterias have implemented various nudges to influence consumer choices. Healthier food options, like fruits and vegetables, are placed at eye level or near checkouts. They are more visible and likely to be chosen by consumers (Laiou et al., 2021). A nudge to make healthy options more convenient and appealing has been shown to increase their consumption. It also reduces the intake of high-calorie, unhealthy foods.

Strategic placement and portion control are also widely used techniques in this domain. Cafeterias, for instance, offer smaller portions to encourage healthy eating. Supermarkets place sugary snacks and junk food in less visible spots. This makes it easier for customers to choose better options. These nudges can improve diets, lower calorie intake, and reduce obesity rates (Laiou et al., 2021).

Case study: encouraging healthy eating in a school cafeteria

Researchers implemented several nudges in school cafeterias, designed to influence students' food choices in a subtle way (Marcano‐Olivier et al., 2019). Nudging students toward healthier eating habits proved effective through strategic food placement.

Fruits and vegetables at eye level in high-traffic areas enticed selection, while less nutritious options were placed out of sight.
Appealing labels for choices considered more wholesome created positive associations.
Smaller portions of unhealthy items made healthier options comparatively more attractive.

These subtle environmental cues led to lasting improvements in students' food choices. By guiding behaviour naturally rather than forcefully, organisations can promote wellness without sacrificing individual autonomy.

Organ donation

One of the most cited examples of nudge theory’s success is its application to organ donation systems. Countries with an opt-out system have seen a big rise in organ donations. In these systems, people are presumed to be donors unless they choose to opt out. Johnson and Goldstein (2003) found that default framing organ donation boosts participation, claiming it takes advantage of people's tendency to stick with the status quo, without coercion.

The implications of this change are significant, as in countries with opt-in systems, organ donation rates have historically been lower. This has been attributed to the effort required to register as a donor and cognitive biases of signing up, requiring organ donation appeals (Figure 2)[factual?]. By switching to an opt-out model, Spain and Austria report having greatly improved organ transplant wait times and patient outcomes. This has potential to save lives for people waiting for transplants. It shows that a simple change in default settings without limiting choice—one of the key techniques in nudge theory—can greatly improve public health.

Environmental stability

Energy-hungry homes drain non-renewable resources. Simple nudges targeted towards changing resource use can change this. Utility companies have implemented nudges by providing consumers with neighbourhood comparisons. This creates a friendly competition between households to conserve energy usage. This competition can drive down energy use as households strive to match (or beat) more efficient neighbours.[factual?]

In addition to managing bills, daily reminders have the potential to become powerful tools. A nudge to unplug appliances or switch off lights reinforces eco-friendly habits and sustainability. Even shower time can get a 'green' makeover with efficient heads, timers and usage feedback.

Wee et al.'s 2021 study supports the idea that these subtle cues can be very effective. Their research found significant drops in both energy and water consumption through the use of simple and straightforward nudges. These nudges supported building sustainability into everyday life and unconscious practice, leading to substantial environmental benefits. Their research indicates that small actions, when amplified across communities, can drive large-scale environmental efforts.

Financial decision-making

Automatic enrolment in retirement plans demonstrates how effective nudging can be in personal finance. By setting participation in savings schemes as the default option, this approach boosts savings without forcing decisions. This encourages individuals to save for future, such as retirement planning. Conversely, timely bill-payment reminders via text or email are demonstrated to minimise late fees and breaking down complex financial information eases planning overwhelm (Beshears and Kosowsky, 2020). These subtle interventions yield tangible benefits: increased savings rates while also reducing penalties. Nudges leverage human tendencies to improve financial outcomes, enhancing overall well-being through smarter choices and reduced stress (Gradinaru, 2014).

Human resources

Nudges can be particularly effective in encouraging positive workplace behaviours, overall contributing to a more positive workplace culture. For example, open dialogue about mental health creates a safe space for employees to voice concerns and access support in the workplace (Lin et al., 2017). These subtle nudges foster positive workplace behaviours, gradually shaping a healthier workplace culture. Similarly, by showing respectful workplace relationships and encouraging people to raise concerns, this behaviour can be seen as the usual. By normalising conversations and showcasing widespread engagement, companies can inspire staff to prioritise well-being and utilise available resources.

Case study: responding to employee complaints with nudge theory

Scenario: An organisation is facing high employee turnover, hurting productivity, morale and profits. Exit interviews with departing employees revealed a common theme. Those leaving felt undervalued and unrecognised for their contributions. Employees said that, despite performing well, they rarely got feedback or recognition from their managers. This caused dissatisfaction and disengagement, and subsequent resignation.

The HR department looked at the feedback and decided to try nudge theory to tackle these issues. Rather than going for expensive solutions like pay hikes or major policy overhauls, they suggested making small, subtle changes. These nudges would shape behaviour and could lift employee satisfaction and retention.

Successful implementation of nudges can see a reduction in turnover and an improvement in overall employee satisfaction

Science behind nudging

The science behind nudging builds on the understanding of "system 1" and "system 2" thinking, as described by psychologist Daniel Kahnerman[spelling?] in thinking, fast and slow (2011). In this, Kahnerman[spelling?] describes two ways the brain forms thoughts:

System 1 thinking is described as being fast, intuitive, and automatic.
System 2 is considered slower, more deliberate, and analytical.

Most nudges target system 1 thinking by taking advantage of natural tendencies such as loss aversion, social proof, or the status quo bias (Beshears and Kosowsky, 2020). This in turn encourages individuals to make better choices in moments of rapid, intuitive decision-making. For example, automatic enrolment in pension plans leverages inertia (a system 1 bias) to improve retirement savings rates (Kahnerman, 2011). The underlying principle is to design choice environments that account for human tendencies while facilitating decisions that align with long-term goals or societal benefits.

Critiques

Evidence of nudging has been argued as limited[awkward expression?]. Mertens et al. (2021) produced a comprehensive meta-analysis claiming that "interventions overall promote change with a small to medium effect". However, Maier et al. (2022) later argued that there is no evidence for nudging after adjusting for publication bias.

Nudges which work well in one environment may not translate to be effective in a different situation. There is evidence to suggest that not all groups respond equally to nudges. For instance, socio-economic status, cultural background, and individual psychological traits can influence how individuals perceive and react to nudges (Manstead, 2018). This inconsistency highlights the risk of unintended consequences: some groups may benefit greatly from a nudge, while others may be disadvantaged. This can lead to the other groups feeling alienated, disadvantaged. or exploited. The scalability of nudges is often questioned, as subtle environmental shifts required for effective nudging may not be easily implemented on a large scale or within complex systems (Hummel and Maedche, 2019). These critiques call for more rigorous, context-specific testing of nudges and greater transparency to ensure they serve broader social and ethical goals (Hausman and Welch, 2010).

Short-lived and long-term nudges

The question of whether nudges are short-lived has been the subject of considerable debate over the years. Some studies suggest that the effects of nudges can be temporary, while others demonstrate lasting impacts.

Lin et al. (2017) argues that a nudge's effectiveness on a person depends on both the intervention type and context in which the nudge is applied. That means that some nudges may rely on immediate behavioural cues and therefore may only produce short-term effects. For example, nudges that compare energy use to neighbours may initially lead to reduced energy use, as described in environmental stability. But this habit can fade over time when people grow desensitised to repeated nudges or lose interest in the behavioural change (Hummel and Maedche, 2019).

On the other hand, some such as Kuyer and Gordijn (2023) argue nudges have demonstrated more enduring effects. They argue default settings, such as automatic enrolment in retirement savings plans, can nudge people to make long term sustained behavioural changes. These nudges tend to have long-term impacts because they leverage inertia. Once individuals are enrolled in such programs, they are unlikely to opt out.

Nudges' power hinges and relies upon exposure and reinforcement. Blending these nudges with education, incentives, or policy shifts can bolster their impact and their duration. As people adapt, these gentle pushes may need to evolve to ensure they remain reliable. Some experts propose dynamic nudges, morphing over time to maintain their influence[factual?]. The key in long-term nudges lies in strategic integration and constant innovation to keep behavioural prompts potent and enduring.

Ethical considerations

Ethical considerations relating to nudge theory primarily revolve around autonomy. Critics raise concerns regarding nudging clashing with central moral values such as liberty, autonomy and respect.

Autonomy

Schmidt and Engelen (2020) articulate autonomy as four dimensions:

Freedom of choice: One of the key criticisms is that nudges can undermine genuine freedom of choice. Although nudges are designed to preserve choice by not restricting options, the manner in which choices are framed may bias individuals towards certain outcomes without individuals actively realising.
Psychological autonomy as volitional autonomy: Psychological autonomy refers to the ability of individuals to make decisions made on their desires, values and rational deliberation. Volitional autonomy refers to whether people are acting in line with their true intentions. Nudge theory is argued to interfere with this volitional autonomy when individuals are influenced to make choices reflecting the intentions or interests of the person nudging, rather than their own authentic preferences.
Psychological autonomy as instrumental rational agency: This dimension measures a person's ability to make rational decisions and reasoned choices. A key concern is whether nudges exploit cognitive biases. Do they undermine a person's ability to be a fully rational agent? Nudge theory often relies on biases, like status quo bias or anchoring. It uses them to nudge people to make desired decisions. Schmidt and Engelen (2020) argue this could harm people's rational agency. They may not be making informed, deliberate choices but reacting to subconscious influences.
Absence of domination: The fourth dimension is concerned with power dynamics. It says nudging should not result in one party control another’s decisions. Sometimes, nudges may show an imbalance of power as the nudge's author may have more knowledge, resources, or influence. Businesses might use nudges to manipulate consumers, encouraging them to spend more on unnecessary products. This is a form of domination as it subtly controls the individual's decision-making. External forces prioritise profits over the consumer's best interests, and a lack of transparency can worsen fears of manipulation and control.

Manipulation concerns

One of the major criticisms of nudge theory is the concern about manipulation. Critics argue that nudges can influence decisions without awareness. This raises ethical questions about autonomy and manipulation.

Hausman and Welch (2010) propose that nudges can be seen as a form of exploitation, especially when groups of people or individuals are influenced without their knowledge or awareness. They argue nudges take advantage of cognitive biases and decision-making processes to steer people towards a specific desired outcome, and this is a philosophical debate. For example, default settings for organ donation can nudge people in a particular direction. If people were fully aware of the nudge's influence, would they make the same choices? They might not, and Hausman and Welch (2010) suggest this is inherently exploitation.

This exploitation includes cases where the person applying the nudge has a personal stake that may not match the interests of those being influenced. For instance, a business might use nudges to get customers to spend more or buy things they do not need or would not otherwise buy. This raises ethical concerns: does the nudge benefit the customer or the company's bottom line? Where is the line for nudges to be considered ethical?

Autonomy and Freedom of Choice

Another key criticism is the potential for nudges to undermine personal autonomy. Critics say nudging while not restrict choice in a strict sense, does limit freedom. Thaler and Sunstein (2008) try to address this concern, saying their concept of libertarian paternalism argues that nudges help. They claim nudges keep freedom of choice while steering individuals toward more beneficial options. Critics argue that nudging, even with preserved choice, can introduce a form of "soft paternalism". Arguments still remain that nudges may prevent decisions that reflect true individual preferences and desires (Kuyer and Gordijn 2023).

Ethical dilemmas

Nudge theory raises ethical dilemmas in regards to transparency and consent. Who reaps the rewards of a nudge - individuals or implementers? Vulnerable groups face heightened risks of exploitation as limited information and cognitive capacity compound these concerns. Transparency emerges as a crucial safeguard, as people deserve awareness of influences shaping their choices. Opting in or out should be their right, with consent and clarity underpinning any nudge strategy (Kuyer and Gordijn 2023) (Hausman and Welch, 2010).

Ethical implementation of nudges, whether on a large or small scale, demands careful consideration of power dynamics and potential consequences of implementation. The nudge theory debate is about finding a balance (Figure 3); it aims to guide people to good outcomes while respecting an individual's freedom, autonomy, and well-being.

Conclusion

Nudge theory is a powerful tool that shapes behaviour by subtly guiding an individual's choice without taking away their freedom to make a decision. Based on concepts derived from behavioural economics, it offers a way to change behaviour, serving as an alternative to traditional methods. It relies on small environmental cues and cognitive biases rather than mandates or financial incentives. Case studies, such as the fly in the urinal and opt-out organ donation, demonstrate that small changes in choice architecture can have significant benefits.

Nudges are effective in many areas such as healthier eating, as well as enhancing both workplace culture and behaviour; and positively influencing an individual's financial decisions. Despite these successes, critics raise valid ethical concerns about autonomy, transparency, and manipulation. While nudges can promote good outcomes, they must be used carefully, putting the individual's interests first and nudges should be clearly articulated, with consideration to ethical concerns prior to implementation.

As nudge theory evolves, those implementing nudges must strike a balance between effectiveness and ethical considerations. Future work should refine nudging techniques and codes of conduct, improve transparency, and address autonomy concerns. The goal is to help people make better decisions and preserve an individual's freedom of choice. This will create social changes that reflect people's true values and preferences.

Check your knowledge:

Provide responses from within the chapter to the below:

What is Nudge Theory, and how does it differ from traditional methods of influencing behaviour?
Which psychological principles underpin Nudge Theory?
In what ways have Nudge Theory been applied, and what are some examples of success?
What criticisms have been levelled against Nudge Theory?
What are the ethical considerations surrounding the use of nudges?

References

Beshears, J., Kosowsky, H. (2020) Nudging: Progress to date and future directions

Organizational Behavior and Human Decision Processes 161, 3-19, https://doi.org/10.1016/j.obhdp.2020.09.001

Congiu, L., & Moscati, I. (2021). A review of nudges: Definitions, justifications, effectiveness. Journal of Economic Surveys, 36(1). https://doi.org/10.1111/joes.12453

Gradinaru, A. (2014). The Contribution of Behavioral Economics in Explaining the Decisional Process. Procedia Economics and Finance, 16, 417–426. https://doi.org/10.1016/s2212-5671(14)00821-1

Hausman, D. M., & Welch, B. (2010). Debate: To Nudge or Not to Nudge. Journal of Political Philosophy, 18(1), 123–136. https://doi.org/10.1111/j.1467-9760.2009.00351.x

Hummel, D., Maedche, A. (2019). How effective is nudging? A quantitative review on the effect sizes and limits of empirical nudging studies. Journal of behavioral and experimental economics. https://doi.org/10.1016/j.socec.2019.03.005

Johnson, E. J., & Goldstein, D. G. (2003, November 21). Do Defaults Save Lives? Papers.ssrn.com. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1324774

Kahneman, D. (2011). Thinking, fast and slow. New York Farrar, Straus & Giroux Inc.

Kuyer, P., & Gordijn, B. (2023). Nudge in perspective: A systematic literature review on the ethical issues with nudging. Rationality and Society, 35(2), 104346312311550. https://doi.org/10.1177/10434631231155005

Laiou, E., Rapti, I., Schwarzer, R., Fleig, L., Cianferotti, L., Ngo, J., Rizos, E. C., Wetle, T. F., Kahlmeier, S., Vigilanza, A., Tsilidis, K. K., Trichopoulou, A., Serra-Majem, L., Brandi, M. L., & Ntzani, E. E. (2021). Review: Nudge interventions to promote healthy diets and physical activity. Food Policy, 102, 102103. https://doi.org/10.1016/j.foodpol.2021.102103

Lin, Y., Osman, M., & Ashcroft, R. (2017). Nudge: Concept, Effectiveness, and Ethics. Basic and Applied Social Psychology, 39(6), 293–306. https://doi.org/10.1080/01973533.2017.1356304

Maier, M., Bartos, F., Stanley, T. D., Shanks, D. R., Harris, A. J. L., Wagenmakers, E. (2022). No evidence for nudging after adjusting for publication bias. Psychological and cognitive sciences, 119 (31), https://doi.org/10.1073/pnas.2200300119

Manstead, A. S. R. (2018). The psychology of social class: How socioeconomic status impacts thought, feelings, and behaviour. Br J Soc Psychol 57(2). 297-291., https://doi.org/10.1111/bjso.12251

Marcano‐Olivier, M. I., Horne, P. J., Viktor, S., & Erjavec, M. (2019). Using Nudges to Promote Healthy Food Choices in the School Dining Room: A Systematic Review of Previous Investigations. Journal of School Health, 90(2), 143–157. https://doi.org/10.1111/josh.12861

Schmidt, A. T., Engelen, B. (2020). The Ethics of Nudging: An Overview. Philosophy Compass, 15(4), https://doi.org/10.1111/phc3.12658

Wee, S.-C., Choong, W.-W., & Low, S.-T. (2021). Can “Nudging” Play a Role to Promote Pro-Environmental Behaviour?. Environmental Challenges, 5(1), 100364. https://doi.org/10.1016/j.envc.2021.100364

External Links

Nudge theory: what 15 years of research tells us about its promises and politics (The Conversation)
What is nudge theory | explained in 2 min (YouTube)
Nudge theory - Dr Amit K Lal (YouTube)
Nudge theory explained (Jessie Sari, Toolshero)