These are days where concepts in Behavioural Economics are making the rounds on the internet and one such widely discussed concept is The Nudge Theory. 

While almost many people have a rough idea of what this theory is about, the following questions might pop up in your heads.

Is this a novel concept which recently took emergence? Or is this just a new name to already existing methods to influence the behaviour of people? Can normal people also make use of the nudge theory? 

This article will clear the air that’s revolving around these questions and give you a nudge to understand this concept better.

So, what is the meaning of the term Nudge? It means to push/prod someone lightly with your elbow to bring them into action. It also means to gently coax something to bring it into action. The concept derives its name from the same. An act wherein you try to make someone do something or influence them to do something through indirect/subtle means of encouragement is known as Nudging. 

The study which explains the connotation of Nudging in our daily lives is known as The Nudge Theory and early references of this concept were made back in 1995 by James Wilk in his study about cybernetics. However, this Nobel-Prize Winning Concept came to the light only when Richard H Thaler and Cass R Sunstein discussed the concept in their 2008 book, ‘Nudge: Improving Decisions About Health, Wealth, and Happiness’. They also took inspiration from the behavioural heuristics discussed by Daniel Kahneman and Amos Tversky. The definition of Nudge Theory in the words of Thaler and Sunstein is as follows,

“A nudge, as we will use the term, is an aspect of the choice architecture that predictably alters people’s behaviour without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting fruit at eye level counts as a nudge. Banning junk food does not.”

Thaler and Sunstein explain in their book that human behaviour can be classified into two types: Automatic System and Reflective System. The automatic system involves involuntary acts such as smiling at a baby and getting nervous when someone points a gun at you, these are instantaneous actions and there is nobody who asks you to react that way. However, in a Reflective system, we deal with the planned decisions that we take in life like following an instruction, joining a college, etc. The Nudge Theory is majorly dependant on the Automatic System and it focusses on making people make decisions without them even realizing about it.  

We use the concept of Nudge in our daily lives without us realizing the same. Let me point out a few examples which will make you realize the same.

  • We take stairs in the metro every day when we commute instead of joining the gym.
  • You make your little sister play a room-tidying game instead of directly instructing her to clean the room.
  • Your parents promise to get you a bicycle if you score well in your exams instead of threatening you to score well. (Though this is not an advisable nudge in my opinion).
  • Your mom adds Veggies to the Fried Rice instead of giving you the veggies directly.
  • The shopkeeper has candies in the billing section to make your kid buy it. (because we are not going to deny the kid anyways due to the fear of being judged in the public)

The implications of The Nudge Theory don’t stop here and it plays a big role in governance too.

Let’s have a look at the history of the theory over the years in the field of governance. Nudge was first implemented and popularized in 2010 when the then Prime Minister of the United Kingdom created a behavioural science and insights team. The first nudge they executed was to set up organ donation drives at driving license centres and this increased the number of volunteers by 1,00,000 in the United Kingdom. This further persuaded them to expand their team and this was also replicated by various other world countries. 

U.S.A was one among the countries which actively came forward and created similar teams to make optimum use of Nudging. One such intriguing example is the app launched in Boston by the name “Citizen Connect”. Boston had a 10-digit feedback/helpline number which was available for people to report any issues in their surroundings. But people in Boston hesitated to make use of this service as they were conscious about their identity and assumed the government wouldn’t do anything about it.

So Boston launched an app called “Citizen Connect” through which people can post their queries and complaint without revealing their identities and the government will respond through the same platform. Through this nudge, Boston made its citizen’s voices to be heard and marched toward the path of transparency in government.

This popular theory which was starting to gain trend was reaching its grinding halt around 2015 as there were budget cuts in the UK and change in government in the U.S.A. This work regained its popularity when Abhijit Banerjee and Esther Duflo mentioned it in their work “Poor Economics.”

It was not until this pandemic this theory also started receiving negative comments. The U.K government did not announce any bans unlike other European countries and just asked its citizens to follow the social distancing norms. The reasoning by the government is that it is nudging its citizens to develop “Herd Behaviour” as bans might lead to fatigue in the population and make them less productive and efficient. So just like every other concept, Nudge theory also has its share of failures.

Some think that the concept is the pinnacle of the behavioural sciences while others think it’s just a poor excuse by politicians and policy-makers for their lack of research and execution. Sonia Sodha, a popular columnist has opined the following way about the Nudge Theory as evident from an article in The Guardian.

“Nudge theory is a poor substitute for hard science in matters of life or death.”

With that being said, I hope this article gave you a positive nudge to know more about this theory.


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