Course Content
Introduction
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Economics for Life

The co-author of Nudge, Cass Sunstein, describes nudges as, “‘Nudges’ are “choice-preserving approaches that steer people in a particular direction, but that allow them to go their own way” (Thaler and Sunstein, 2008). They are not mandates but important “gentle pushes” that help people make good decisions. Nudges are very important in motivating people to take action on behaviors that are good for them. As one classic example of a nudge, a company automatically enrolls its employees in a retirement plan but allows them to opt-out. In one experiment, this increased employee participation in contributing the maximum amount matched by the company from 40% to over 90% (Thaler and Sunstein, 20028).

Sunstein’s ten basic types of nudging are:

  1. Default rules (e.g., providing automatic enrollment in programs, including education, health, and savings). 5
  2. Simplification of current requirements (in part to promote take-up of existing programs).
  3. Reminders (e.g., emailing or text messaging for overdue bills and coming obligations).
  4. Eliciting implementation intentions (e.g., asking ‘‘do you plan to vote?’’).
  5. Uses of social norms (e.g., saying ‘‘most people plan to vote,” “most people pay their taxes on time’’ or ‘‘most people are eating healthy these days’’).
  6. Increases in ease and convenience (e.g., making low-cost options or healthy foods visible).
  7. Disclosure (e.g., sharing the costs associated with energy use), or as in the case of data.gov and the Open Government Partnership.
  8. Warnings, graphic or otherwise (e.g., putting warning labels on cigarettes).
  9. Precommitment strategies (e.g., having people commit to a certain course of action).
  10. Information on the consequences of past choices (e.g., the use of ‘‘smart disclosure’’ in the US or the ‘‘midata project’’ in the UK).