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September 7th UCD Geary Institute and IBSPN event on behavioural science and policy
Posted by Liam Delaney
On September 7th, we will host a workshop to mark one year since the launch of our programme on behavioural science and public policy at UCD Geary Institute for Public Policy. The programme is based at the Institute and works in conjunction with colleagues at the UCD School of Economics and College of Social Sciences and Law. The event will take place from between 12pm and 3pm. Our keynote speaker will be Professor Will Hofmann (http://soccco.uni-koeln.de/wilhelm-hofmann.html). Lunch and Tea/Coffee will be provided on arrival. Full details of the programme will be made available here in due course. Full details of the UCD Geary Institute behavioural science and policy group are available at bsp.ucd.ie Sign-up page for the workshop here
1200pm: Lunch and Coffee (to take and sit down)
1210pm: Intro and Welcome: Professor Liam Delaney.
1225pm: Overview presentations on ongoing research at UCD Behavioural Science and Policy Group
110pm: Launch of UCD Geary Institute Behavioural Economics Laboratory
130pm to 245pm: Keynote Speaker: Professor Wilhelm Hofmann (University of Cologne)
Trust in Everyday Life: Preliminary Results from an Experience-Sampling Study
(together with: Alexa Weiss, Corinna Michels, Pascal Burgmer, Thomas Mussweiler, Axel Ockenfels)
Interpersonal trust plays a key role for functioning social relationships, has tight links with cooperation, and is the main foundation of economic transactions. In the present study, we sampled everyday trust and distrust experiences in a heterogeneous sample of 426 adults across many different social situations to address a number of overarching research questions such as: To what extent are everyday social interactions characterized by high vs. low trust? What types of everyday social interactions are perceived as rather high vs. low in trust, and what surface-level and deep–level variables account for variability in trust? What structural features of situational interdependence shape trust vs. distrust? And to what extent can trust game behavior, measured in the lab, predict everyday levels of trust?
Present Bias on Twitter (January – August 2018)
Searched for "present bias" on Twitter and some interesting articles, blog posts, and reports came up. Below are links to a number of these resources which gives an idea about how present bias was covered outside academia so far in 2018. This is not a complete list but rather light summer reading. Not all of the articles were published in 2018, but all were mentioned this year on Twitter.
The Cognitive Biases Tricking Your Brain.
https://www.theatlantic.com/magazine/archive/2018/09/cognitive-bias/565775/
Do this if you want to pay off your credit-card debt faster.
https://www.marketwatch.com/story/this-is-the-best-predictor-of-how-fast-youll-pay-off-credit-card-debt-2018-08-06
Hyperbolic Discounting: Why You Make Terrible Life Choices.
https://www.nirandfar.com/2017/08/hyperbolic-discounting-why-you-make-terrible-life-choices.html
Why Trying New Things Is So Hard to Do.
https://www.nytimes.com/2017/12/01/business/why-trying-new-things-is-so-hard.html
Work cliques can blind you to the future.
http://review.chicagobooth.edu/behavioral-science/2017/article/work-cliques-can-blind-you-future
Present bias in alcohol use disorder.
http://www.basisonline.org/2018/07/present-bias-in-alcohol-use-disorder.html?platform=hootsuite
Behavioral Insights and Parenting
https://bppblog.com/2018/04/19/behavioral-insights-and-parenting/
Your Future Self is The Enemy of Your Best Self (How to OverCome Your Present Bias).
https://medium.com/the-mission/your-future-self-is-the-enemy-of-your-best-self-how-to-overcome-your-present-bias-e8dbb4544791
Save Money by Going Back to the Future (Countering Present Bias)
https://youngandthrifty.ca/save-money-by-going-back-to-the-future-countering-present-bias/
All the human flaws and biases that prevent you from managing money better.
https://qz.com/1264033/all-the-human-flaws-and-biases-that-prevent-you-from-managing-money-properly/
Behavioral Finance and Financial Health.
https://www.quickenloans.com/blog/behavioral-finance-financial-health
https://twitter.com/Calvinn_Hobbes/status/998443847758708736
https://twitter.com/angeladuckw/atus/994259784395345926
Father Ted and Economics Speaking Notes
See below speaking notes for the "Father Ted talk" I gave in Kilkenny last November as part of the Kilkenomics festival. Provided just for fun as some people had been asking for them. These were guide notes I was using - the session itself was very interactive and took place at 11pm on a Saturday night in a gig venue. My favourite heckle was "Xenophon was first" shouted by one audience member as I was talking about the Scottish Enlightenment. At another stage a customer of the adjacent pub wandered in, thinking he was entering the gents, then once he had gotten over the shock shouted at me to "play something by Oasis". In general, it was a very fun experience with a very upbeat audience.
The Economics of Father Ted
Hello everyone. I see I have sold out tonight's event. I asked the organizers and they said I was one of the first to sell out. I asked them to clarify whether I was one of the first or THE first. They told me I was the second to sell out after Varoufakis. Well no problem there. If you love him so much, I am sure we could just chase after him and ask him to give the talk. Professor Varoufakis the perfect Professor with his motorbike and his jacket. Maybe I shouldn't do this talk at all. Maybe we should just spend the next hour gazing lovingly at his photo.
There were some economists who doubted I could sell out Kilkenny. Well I think the smile has very much been wiped off the face of a certain Dr Stephen Kinsella. ("Oh God I hope he doesn't spend the next hour boasting about himself and settling scores").
Seriously though folks there are real crossovers between economics and Father Ted. Not widely known but Linehan and Matthews based Father Jack on the well known Irish economist Colm McCarthy.
I have always dreamt of giving a Ted talk. In my dream, my talk is so inspiring that I finish it, without a hint of irony and managing to pull it off completely, with a full-throated rendition of all seven verses of the Greatest Love of All.
I always felt drawn to comedies as a way of understanding the world. While I like Star Trek, it always left me with a sense of distance from the competent and emotionally intelligent people exploring the universe. Red Dwarf, in which a sexually-frustrated man-cat often shouted and kicked dysfunctional machinery always felt a bit more real. Elon Musk's ambition to populate Mars sounds great in one way but you get the sense from the way we are going that they would ruin it in a couple of years with a property bubble and then some idiot would set up an anti-immigration party for "real Martians". I think no matter how advanced our technology becomes, we will always need a capacity for a sense of humor, certainly given how we manage our economies.
So why Father Ted and economics? I think some TV shows are so iconic that they have clearly tapped into deep features of a culture. Others have written about, for example, economic themes in the Wire and there are several college courses on the Wire and on Yes Minister. While Ted is not about economic and political themes primarily, the context of Ted arising at the nadir of Irish catholicism and the universality of the characters and the jokes makes it possible to use aspects of the programme to illustrate many important economic themes.
Firstly, what is Economics? Prior to Economics, we had Political Economy. Political Economy has a number of roots but one of the main ones is the Scottish Enlightenment. The Scottish Enlightment is basically similar to Dougal's questioning of the validity of religion. Thinkers like Smith and Hume began to say "Come on, Ted. Sure it's no more peculiar than all that stuff we learned in the seminary, you know, Heaven and Hell and everlasting life and all that type of thing. You're not meant to take it seriously, Ted!", and to question the primacy of religion in social thought. They sought to develop a "science of man" to anchor how to govern countries. From this, political economy began to develop. It is hard to say Adam Smith invented Economics but he was definitely the last person to invent it. I once saw a t-shirt that said "Economics, confusing people since 1776", 1776 being the year Smith published his wealth of nations. Most people would see this as the birth of Political Economy.
But throughout the 1800s, a lot of thinkers became impatient with the idea that political economy would not be as scientific as other disciplines. Basically, they wanted to take the political out and develop a science based on mathematics and data. Suggested names for this new science included Plutology, Chrematistics, Catallactics, but thankully around the 1880s, they settled for the name Economics and it is at this stage that the first great Economics textbooks start emerging. These guys were confident that they had developed a science, it was a mathematical science that studied how consumers, producers, workers, investors, entrepreneurs etc., interacted rationally together in market systems. Over the next century, it would grow into a body of mathematical theory and empirical data to test all these relationships. However, it left a lot of stuff out, and Father Ted is a good framework for thinking about this:
Feck, Arse, Drink: Rationality and Motivations
The first thing I would say is that the assumption that people are selfish and look after their own or their family's interests first and foremost is one of the biggest questions in Economics. In Ted, we see varying degrees of this. First, there is the sort of Freudian id selfishness of Father Jack. Sitting on a couch summoning pornographic images to his mind, shouting insults at people, and demanding psychoactive substances, Father Jack is basically the personification of the emerging digital economy. As economists we have a reasonably good handle on that type of consumer. Tibor Skitovsky's great book "The Joyless Economy" warns about how the progression of convenient consumer goods could lead to outcomes where our lives became dull, how we might all become essentially cyborg Father Jacks without counterveiling tendencies to push us to challenge ourselves in different ways. Ted also displays a self-indulgence that is pretty easy to model from an economic perspective but he adds things like concern for status and bitterness that had to be added into economic models over the 20th century. Also, we see in Father Ted the importance of norms of behaviour in people'e lives. "I'll pay for this Mrs Doyle" and the subsequent fight illustrates what economists came to call impure altruism - there is a vast amount of human economic behaviour that fits into that mold.
Lovely Horses: Winner's Curses and Profitable Losses
The second thing that Ted contributes to our understanding of the economy is the sense of how ridiculous things can be in real world markets. While the received wisdom is that markets are all about competing and winning, in actuality incentives can make losing a more efficient strategy. My favourite example is My Lovely Horse. It is our natural assumption to think that people must be trying to win when they are competing, whether it is a company going for a tender, or a team competing for a trophy. But there are so many "Lovely Horse" situations in modern economies. If you remember the plot, Ted and Dougal develop a song about a horse and enter it into the competition to decide who represents Ireland in the Eurovision. RTE, having hosted the competition several times before and finally realising how costly it is to do so, rig the competition so that Ted and Dougal win, in the hope that they basically get trounced in the final and they dont have to worry about it again. The producer of the show on the night produces a classic Father Ted moment as we see how cynical he has become of life in general having to operate in such a corrupt environment only to catch a glimpse of his humanity being restored as he watches his colleague and lover Jon Kenny emerge on to the stage to preside over the farce - "What a showman!!". We see situations like this constantly. The amount of corruption related to gambling in sport is now so endemic that it is likely we will start witnessing an increasing amount of matches where both sides, without knowing it, have agreed with a separate betting syndicate to lose and have to grind each other, in fear of having their knees broken, into a soulless stalemate like participants in a particularly bleak Beckett play. In many countries, people can write off corporate losses against their personal taxes which is allegedly why Trump's companies consistently made losses yet he is still so wealthy. Financial analysts talk about "unicorns", which are basically untested start-ups that aquire very high initial valuations. I like to think also about "lovely horses", projects intentionally doomed to fail because the incentives make it good for someone to have them fail.
The Behavioural Economics of Spiderbabys
Ted also contains many funny examples of what happens in everyday consumer life. There are Spider-Babys all round us. When Dougal gets excited about the coming to town of the carnival, it is the spider-baby that jumps out most to him. Upon questioning from Ted, we learn that the "spiderbaby" has both the body of a spider and the head of a spider and has nothing in common with being a baby other than they have put it in a pram. Many financial products are basically spider-babys with exotic names that mask the fact that they are basically bank accounts or bundles of loans. Furthermore markets are very confusing anyway - we are bewildered by complexity both inherent and contrived and we look for ways of cutting through this complexity. Herbert Simon, who won the Nobel in Economics and did so many other things in psychology and artificial intelligence, said that humans were boundedly rational - they develop simplifying strategies to navigate life. When Tom emerges from the post office following the sound of a gun shot and an ensuing alarm, his desire to get moving as quickly as possible makes Ted wonder whether "he is up to his old tricks again". Instead Tom assures Ted that "its my money father, I just didn't want to fill out all de forms". An extreme example, but the development of behavioural economics and the various Nobel prizes that have been handed out in that area revolve exactly around this question, how do we cope with such complexity.
Champagne Cardinals and Piketty's Capital
An image from Father Ted that sticks with me is the sight of a bunch of cardinals sitting in a jacuzzi drinking champagne as models covort around them. This image takes on more life in the 1 per cent movement. Corporate pay and culture at the top level has come into increasing focus over recent years, including Piketty's work Capital. Large concentrations of wealth, coupled with inheritance in the context of declining family sizes, and the fact there is not much evidence that senior figures add value in relation to the size of these payments, all get us thinking that maybe capitalism is just a bit like that - if you work in a large company in the equivalent of their Craggy Island branch, perhaps the bosses really are sitting in a jacuzzi somewhere laughing and drinking champagne, ready to put out the odd fire when needed. And it is a lot worse if you are a woman. Ted took place in a context of discrimination against women that we can only hope later generations will think of as like something from another age. Images of an exhausted Mrs Doyle heading up to the roof to mend the slates on a windy day or the winner of lovely girls competition getting the prize of buying Ted dinner are funny but partly because they resonate - as humorous as the images are you could easily give examples from the real Ireland at the time that were just as bad.
Fintan Stack and Restoring the Political Economy Tradition
One thing that Father Ted also teaches us is that maybe we went wrong in taking out the politics of power and violence. Looking at the last financial crisis, there are few better ways to get a sense of what happened than summoning to your mind an image of a slightly oily and malevolent Brendan Grace cleaning his ear with a car key and uttering the immortal words "I took your car and I drove it into a big wall and if you don't like it tough, I've had my fun and that's all that matters". As I said before, economics became good at modelling various features of human beings. Whereas many models leave out complexity, entire literatures emerged to explain how people cope with this. The standard model doesn't take into account social norms, and adherence to cultural beliefs etc., but again whole literatures have emerged to plug this gap. Where we have struggled more is with the possibility that people are not just selfish but can also be actively malevolent and destructive and not respecting of the property rights systems that are the backbone of the scientific economics. Most generations in history across all countries encounter a Fintan Stack moment, where somebody bigger, stronger, badder, and with a greater capacity for violence simply takes their stuff and tells them to screw themselves. For my generation in Ireland that was the financial crisis. We were certainly used to "money resting in accounts" moments, lovely horses, and cardinals - in many ways what makes Father Ted funny is it draws deep from the rich well of low-level corruption and hypocrisy that marked out much of the Ireland we grew up in. But what makes Fintan Stack stand out is he is completely above norms and niceties. He doesn't even try to dress it up in any way - he is playing the jungle music not asking for permission to play it and if he wants to smash your car he will. When we saw people who had gambled into the crazy property market of pre-crisis Ireland demanding protection of their full investment, what we see is not just "Cardinals" level champagne-swilling frivolity, it is Fintan Stack level malevolence. I think it shocked a lot of us and it gets us to think about how you protect a system of democracy, law, and society based on rules and conventions grounded in human decency from such characters.
I Believe the Children are our Future
Given this is my Ted talk, I would like to end with something inspiring. I think if we can continue this work together, then it just might be possible one day for the most disadvantaged children on the planet to navigate space cheaply and safely...Well that's what I would have like to end with but more seriously a comedy as brilliantly written and performed as Father Ted enters into the culture because it is drawing from a mass of forces that we all recognise when we see them. I genuinely think connecting that type of thinking with the economic way of thinking is worthwhile.
Behavioural Economics and Financial Services
My Sunday Business Post article is available here. A rougher and un-gated version is below.
Nudging consumers for better and worse
The awarding of the Nobel prize in Economics to the Chicago-based economist Richard Thaler last year underlines the extent to which behavioural economics has become an important part of modern thinking on policy. Thaler is one of the leading figures in integrating psychology into economic models, and has been at the forefront of a widespread change in Economics that has increasingly come to have real-world effects.
A central idea in behavioural economics is that markets do not necessarily work to satisfy consumer demand in the way traditionally outlined by economists, particularly for complex contractual products. People find such products difficult to engage with and often delay key financial decisions. Furthermore, companies exploit consumer biases through several mechanisms, meaning that people often purchase products not suited to them in a meaningful sense. For this reason, consumer financial markets are far more unstable than they would otherwise be, and household finances across life are more precarious than one would expect just from income levels alone.
The literature in this area has increasingly pushed for more active government policy and regulation in consumer finance. A key area for this has been pensions. As much of the world has moved towards people making provision for themselves with defined contribution products, understanding how people engage with such products has become more urgent. Thaler and several of his colleagues have argued that some form of auto-enrolment is needed to make this a relevant choice for many consumers, and that auto-escalation (making the contributions rise over time in line with salary) should also be a feature of pension provision to ensure that people don't simply stick at a low level of default contribution. This thinking has been influential in Ireland also with proposals to introduce auto-enrolment having been part of the debate for years and now moving into an implementation phase.
Pension auto-enrolment potentially will solve one key problem for Irish consumers, namely the difficulty in getting a pension sorted out early enough in life to build up a decent retirement income. But there are many other aspects of consumer finance that are affected by behavioural factors. The ESRI's behavioural economics unit have shown that many Irish consumers find a whole range of consumer contractual products too confusing to make meaningful choices of the type envisioned by economic models. This is a problem for consumers but also for the industry more generally, as it means firms have incentives simply to find better ways of exploiting confusion rather than competing on price and product quality.
All of this has the potential to be made worse by the development of "big data" models that allow firms to target consumer biases at an individual level using transactions and other related data. While such models open up the potential to improve consumer outcomes by better matching consumers to products, they also open up substantial potential to develop algorithms that simply figure out how to charge more for the same product to confused consumers. A recent paper by Harvard legal scholar Oren Bar-Gill argues that such algorithms that target consumer biases have a strong potential to create harmful outcomes, and that regulators should "fight fire with fire" and examine how to counteract this. More generally Bar-Gill has warned about the potential for consumer detriment in complex contractual markets, including in his widely read book "Seduction by Contract" which dissects the various features of contractual services that make them difficult for consumers.
One of the main contributions of behavioural economics will be to recognise these features of markets and to encourage more active regulation by governments. Financial education is certainly one tool to improve consumer outcomes but it is a very limited response of itself and should not be seen as taking the place of direct regulation to improve the product environment. The book "Nudge", published ten years ago by Thaler and his colleague Cass Sunstein, argued for a shift towards making decisions easier for consumers and pushed regulators to examine all aspects of the "choice architecture" of complex products. UK regulators such as the Financial Conduct Authority have led the way in experimenting with disclosure requirements for products, explaining to consumers what they are purchasing in a manner they are likely to understand, and work of this nature is also underway in Ireland. There are many potential applications in this area, including experimenting with how costs of products like mortgages, credit cards, and personal loans are communicated to people to ensure they fully understand them, to shaping pension offerings to make them a more active part of people's lives.
The ideas in this area have also started to have a major influence on how governments interact with citizens, including in areas such as energy efficiency, environmental change, revenue collection, and a vast range of other areas. For example, the Irish Revenue have been using behavioural economics ideas to design more effective communication tools to improve tax compliance, and the Sustainable Energy Authority have recently established a small team to use this area to improve the roll-out of energy efficiency schemes.
The literature is also not limited to looking at consumer decision making. The extent to which the risk-taking culture of providers might itself create potential for poor financial outcomes for consumers and firms has increasingly been examined in this area. Most large private institutions have explicit codes to communicate to employees the importance of appropriate risk-taking behaviour and concern for customer outcomes. However, the implicit culture engendered in competitive "team-sport" type environments has increasingly been studied, particularly when compounded with review cultures that stress short-term targets. While it is important to understand the incentives of financial institutions in the traditional economics sense, the role of such institutional cultural factors need also to be part of an improvement in consumer finance, as recognised by recent bank culture reviews. If nudging consumers has become a widespread form of public policy making, it should not be a substitute for understanding that the providers are also subject to human pressures.
Overall, this more psychological approach to looking at markets has now firmly established itself in academia and policy-making, and will increasingly impact on how governments, regulators, and firms behave. In an optimistic scenario, markets will become more active through regulation that is more grounded in actual evidence on human decision-making and consumers will be empowered to make more sensible choices. Furthermore, government policy may also become much more responsive to psychological features that affect policy administration. However, advances in data and technology also open up avenues for consumer exploitation not yet widely understood by regulators. "Caveat emptor" may be a hollow motto when behaviour is being shaped by factors hard to understand for the majority of people.
Liam Delaney is Professor of Behavioural Economics in UCD. Disclaimer of Conflict of Interest: Funding was provided to UCD from AIB to form the Professorship in this area. They have no role in screening research or influencing public submissions.
Lab Experiments and Real-World Behaviour Reading List
We recently installed an experimental lab in the UCD Geary Institute as part of the development of our programme. We also developed a new module on lab and field experiments on our MSc in Behavioural Economics programme, and will teach Experimental Economics to our undergraduates for the first time in 2018/2019 academic year. On the research side, our key interest is how lab measures of behaviour correlate with and predict behaviour in non-lab settings. This reading list will collect interesting studies in this area and I will update it every so often. The focus is on economic studies with humans but I will add anything else that looks potentially interesting for this area. Please feel free to leave suggestions in the comments or email me (thanks to Theo Halpin for help in compiling this list).
Reading List:
Bickel, Warren K., Odum, Amy L., and Madden, Gregory J. (1999). Impulsivity and cigarette smoking: delay discounting in current, never, and ex-smokers. Psychopharmacology 146.
Rationale: Impulsivity is implicated in drug dependence. Recent studies show problems with alcohol and opioid dependence are associated with rapid discounting of the value of delayed outcomes. Furthermore, discounting may be particularly steep for the drug of dependence. Objectives: We determined if these findings could be extended to the behavior of cigarette smokers. In particular, we compared the discounting of hypothetical monetary outcomes by current, never, and ex-smokers of cigarettes. We also examined discounting of delayed hypothetical cigarettes by current smokers. Methods: Current cigarette smokers (n=23), never-smokers (n=22) and ex-smokers (n=21) indicated preference for immediate versus delayed money in a titration procedure that determined indifference points at various delays. The titration procedure was repeated with cigarettes for smokers. The degree to which the delayed outcomes were discounted was estimated with two non-linear decay models: an exponential model and a hyperbolic model. Results: Current smokers discounted the value of delayed money more than did the comparison groups. Never- and ex-smokers did not differ in their discounting of money. For current smokers, delayed cigarettes lost subjective value more rapidly than delayed money. The hyperbolic equation provided better fits to the data than did the exponential equation for 74 out of 89 comparisons. Conclusions: Cigarette smoking, like other forms of drug dependence, is characterized by rapid loss of subjective value for delayed outcomes, particularly for the drug of dependence. Never- and ex-smokers could discount similarly because cigarette smoking is associated with a reversible increase in discounting or due to selection bias.
Brañas-Garza, Pablo and Galizzi, Matteo M. and Nieboer, Jeroen (2018) Experimental and self-reported measures of risk taking and digit ratio (2D:4D): evidence from a large, systematic study International Economic Review. ISSN 0020-6598 (In Press)
Using a large (n=704) sample of laboratory subjects, we systematically investigate the links between the digit ratio - a biomarker for pre-natal testosterone exposure - and two measures of individual risk taking: (i) risk preferences over lotteries with real monetary incentives, and (ii) self-reported risk attitude. The digit ratio (also called 2D:4D) is the ratio of the length of the index finger to the length of the ring finger, and we consider both hands' digit ratios. Previous studies have found that the digit ratio correlates with risk taking in some subject samples, but not others. In our sample, we find that both the right-hand and the left-hand digit ratio are significantly associated with risk preferences: subjects with lower digit ratios tend to choose riskier lotteries. Neither digit ratio, however, is associated with self-reported risk attitude.
Calisi, Rebecca M., and Bentley, George E. (2009). "Lab and field experiments: Are they the same animal?" Hormones and Behaviour 56(1).
To advance our understanding of biological processes we often plan our experiments based on published data. This can be confusing though, as data from experiments performed in a laboratory environment are sometimes different from, or completely opposite to, findings from similar experiments performed in the "real world". In this mini-review, we discuss instances where results from laboratory experiments differ as a result of laboratory housing conditions, and where they differ from results gathered in the field environment. Experiments involving endocrinology and behavior appear to be particularly susceptible to influence from the environment in which they are performed. As such, we have attempted to promote discussion of the influence of housing environment on the reproductive axis, circadian biology and behavior, immune function, stress biology, neuroplasticity and photoperiodism. For example, why should a rodent species be diurnal in one housing environment yet nocturnal in another? Are data that are gathered from experiments in the laboratory applicable to the field environment, and vice-versa? We hope not only to highlight the need for experiments in both lab and field when looking at complex biological systems, but also to promote frank discussion of discordant data. Perhaps, just as study of individual variation has been gaining momentum in recent years, data from variation between experimental arenas can provide us with novel lines of research.
Chabris, Christopher F., Laibson, David., Morris, Carrie L., Schuldt, Jonathon P., and Taubinsky, Dmitry. (2008). Individual laboratory-measured discount rates predict field behaviour. Journal of Risk and Uncertainty 37
We estimate discount rates of 555 subjects using a laboratory task and find that these individual discount rates predict inter-individual variation in field behaviors (e.g., exercise, BMI, smoking). The correlation between the discount rate and each field behavior is small: none exceeds 0.28 and many are near 0. However, the discount rate has at least as much predictive power as any variable in our dataset (e.g., sex, age, education). The correlation between the discount rate and field behavior rises when field behaviors are aggregated: these correlations range from 0.09–0.38. We present a model that explains why specific intertemporal choice behaviors are only weakly correlated with discount rates, even though discount rates robustly predict aggregates of intertemporal decis
Courtemanche, Charles., Heutel, Garth., and McAlvanah, Patrick. (2015). Impatience, Incentives, and Obesity. The Economic Journal 125(582).
This article explores the relationship between time preferences, economic incentives and body mass index (BMI). We provide evidence of an interaction effect between time preference and food prices, with cheaper food leading to the largest weight gains among those exhibiting the most impatience. The interaction of changing economic incentives with heterogeneous discounting may help explain why increases in BMI have been concentrated amongst the distribution's right tail. We also model time-inconsistent preferences by computing individuals' quasi-hyperbolic discounting parameters. Both long-run patience and present-bias predict BMI, suggesting obesity is partly attributable to both rational intertemporal tradeoffs and time inconsistency
Delaney, L., and Lades, L. K. (2017). Present Bias and Everyday Self-Control Failures: A Day Reconstruction Study. Journal of Behavioral Decision Making,
Everyday life is full of self‐control problems. The economist's favorite explanation for self‐control problems is present bias. This paper tests whether experimentally elicited present bias predicts self‐control problems in everyday life. We measure present bias by using a standard incentivized delay discounting task and everyday self‐control by using the day reconstruction method (DRM). Because this is the first study to measure everyday self‐control by using the DRM, we also validate the method by showing that its data replicate key results from the seminal Everyday Temptation Study. We find that present bias does not predict everyday self‐control. This points to a distinction between decreasing impatience (as measured in delay discounting tasks) and visceral influences (as occurring in everyday life) as determinants of self‐control problems. We argue that decision making research can benefit from the DRM as a cost‐effective tool that complements lab and field experiments to better understand economic preference measures and their correlates in everyday life decision making.
DellaVigna, Stefano. (2009). Psychology and Economics, Evidence from the Field. Journal of Economic Literature 47(2).
The research in Psychology and Economics (a.k.a. Behavioral Economics) suggests that individuals deviate from the standard model in three respects: (1) nonstandard preferences, (2) nonstandard beliefs, and (3) nonstandard decision making. In this paper, I survey the empirical evidence from the field on these three classes of deviations. The evidence covers a number of applications, from consumption to finance, from crime to voting, from charitable giving to labor supply. In the class of nonstandard preferences, I discuss time preferences (self-control problems), risk preferences (reference dependence), and social preferences. On nonstandard beliefs, I present evidence on overconfidence, on the law of small numbers, and on projection bias. Regarding nonstandard decision making, I cover framing, limited attention, menu effects, persuasion and social pressure, and emotions. I also present evidence on how rational actors? firms, employers, CEOs, investors, and politicians? respond to the nonstandard behavior described in the survey. Finally, I briefly discuss under what conditions experience and market interactions limit the impact of the nonstandard features.
Karlan, Dean S. (2005). "Using Experimental Economics to Measure Social Capital and Predict Financial Decisions". The American Economic Review 95(5).
Measures (Peruvian) participant's responses in the 'Trust Game' and correlates this to likelihood that participants will repay their loans. Raises some interesting questions about how what people do in the field changes our understanding of why they make certain decisions in the lab.
Levitt, Steven D., and List, John A. (2007). Viewpoint: On the generalizability of lab behaviour to the field. Canadian Journal of Economics/Revue Canadienne d'Économique 40(2).
We can think of no question more fundamental to experimental economics than understanding whether, and under what circumstances, laboratory results generalize to naturally occurring environments. In this paper, we extend Levitt and List (2006) to the class of games in which financial payoffs and 'doing the right thing' are not necessarily inc onflict. We argue that behaviour is crucially linked to not only the preferences of people, but also the properties of the situation. By doing so, we are able to provide a road map of the psychological and economic properties of people and situations that might interfere with generalizability of laboratory result from a broad class of games.
Lunn, Peter D., and Ní Choisdealbha, Áine. (2018). The case for laboratory experiments in behavioural public policy. Behavioural Public Policy 2(1).
Behavioural science is increasingly applied to policy in many countries. While the empirical approach to policy development is welcome, we argue with reference to existing literature that laboratory experiments are presently underused in this domain, relative to field studies. Assumptions that field experiments, including randomised controlled trials, produce more generalisable results than laboratory experiments are often misplaced. This is because the experimental control offered by the laboratory allows underlying psychological mechanisms to be isolated and tested. We use examples from recent research on energy efficiency and financial decision-making to argue that mechanism-focused laboratory research is often not only complementary to field research, but also necessary to interpreting field results, and that such research can have direct policy implications. The issues discussed illustrate that in some policy contexts a well-designed laboratory study can be a good – perhaps the best – way to answer the kinds of research questions that policy-makers ask.
Falk, Armin., and Heckman, James J. (2009). "Lab Experiments Are a Major Source of Knowledge in the Social Sciences". Science 326(5952).
Laboratory experiments are a widely used methodology for advancing causal knowledge in the physical and life sciences. With the exception of psychology, the adoption of laboratory experiments has been much slower in the social sciences, although during the past two decades the use of lab experiments has accelerated. Nonetheless, there remains considerable resistance among social scientists who argue that lab experiments lack "realism" and generalizability. In this article, we discuss the advantages and limitations of laboratory social science experiments by comparing them to research based on nonexperimental data and to field experiments. We argue that many recent objections against lab experiments are misguided and that even more lab experiments should be conducted.
Galizzi, Matteo M. and Navarro-Martínez, Daniel (2018) On the external validity of social preference games: a systematic lab-field study Management Science. ISSN 0025-1909
We present a lab-field experiment designed to systematically assess the external validity of social preferences elicited in a variety of experimental games. We do this by comparing behavior in the different games with several behaviors elicited in the field and with self-reported behaviors exhibited in the past, using the same sample of participants. Our results show that the experimental social preference games do a poor job explaining both social behaviors in the field and social behaviors from the past. We also include a systematic review and meta-analysis of previous literature on the external validity of social preference games.
Laury, Susan K., and Taylor, Laura O. (2008). "Altruism spillovers: Are behaviors in context-free experiments predictive of altruism toward a naturally occurring public good?" Journal of Economic Behavior & Organization 65.
This paper addresses the external validity of experiments investigating the characteristics of altruism in the voluntary provision of public goods. We conduct two related experiments that allow us to examine whether individuals who act more altruistically in the context-free environment are also more likely to act altruistically toward a naturally occurring public good. We find that laboratory behavior can be predictive of contributions toward naturally occurring goods, but not in a uniform way. In fact, parametric measures of altruism do a poor job of predicting which subjects are most likely to contribute to a naturally occurring public good
Lopez, R. B., Hofmann, W., Wagner, D. D., Kelley, W. M., & Heatherton, T. F. (2014). Neural predictors of giving in to temptation in daily life. Psychological science, 25(7), 1337-1344.
The ability to control desires, whether for food, sex, or drugs, enables people to function successfully within society. Yet, in tempting situations, strong impulses often result in self-control failure. Although many triggers of self-control failure have been identified, the question remains as to why some individuals are more likely than others to give in to temptation. In this study, we combined functional neuroimaging and experience sampling to determine if there are brain markers that predict whether people act on their food desires in daily life. We examined food-cue-related activity in the nucleus accumbens (NAcc), as well as activity associated with response inhibition in the inferior frontal gyrus (IFG). Greater NAcc activity was associated with greater likelihood of self-control failures, whereas IFG activity supported successful resistance to temptations. These findings demonstrate an important role for the neural mechanisms underlying desire and self-control in people's real-world experiences of temptations
Meier, Stephan., and Sprenger, Charles. (2010). Present-Biased Preferences and Credit Card Borrowing. American Economic Journal: Applied Economics 2(1).
Some individuals borrow extensively on their credit cards. This paper tests whether present-biased time preferences correlate with credit card borrowing. In afield study, we elicit individual time preferences with incentivized choice experiments, and match resulting time preference measures to individual credit reports and annual tax returns. The results indicate that present-biased individuals are more likely to have credit card debt, and to have significantly higher amounts of credit card debt, controlling for disposable income, other socio-demographics, and credit constraints.
Potters, J., & Stoop, J. (2016). Do cheaters in the lab also cheat in the field?. European Economic Review, 87, 26-33.
Abstract: In this paper, we study the correlation between cheating in the lab and cheating in the field. We conduct a laboratory experiment using a variant of the Mind game (Jiang, 2013). Payoffs above a certain threshold are indicative of cheating behavior. Subjects are paid their earnings by bank transfer. A fraction of the subjects is deliberately paid more than their earnings. We send subjects a reminder e-mail stating their earnings and asking them if they have received their payment. We find a significant correlation of 0.31 between cheating in the lab and in the field. Subjects with higher payoffs in the Mind game are also less likely to report the overpayment. Our results speak to the lab-field generalizability of cheating behavior.
Scharff, Robert L., and Viscusi, W. Kip. (2011). Heterogenous Rates of Time Preference and the Decision to Smoke. Economic Inquiry 49(4).
Individuals with higher personal rates of time preference will be more likely to smoke. Although previous studies have found no evidence of a relationship between smoking and rates of time preference, analysis of implicit rates of time preference associated with workers' wage fatality risk trade-offs indicates that smokers have higher rates of time preference with respect to years of life. Current smokers have an implied rate of time preference of 13.8% as compared to 8.1% for nonsmokers. Current smokers who are blue-collar workers have rates of time preference with respect to years of life of 16.3% compared to 7.8% for nonsmoking blue-collar workers.
Sutter, Matthias., Kocher, Martin G., Glätzle-Rützler, Daniela., and Trautmann, Stefan T. (2013). "Impatience and Uncertainty: Experimental Decisions Predict Adolescents' Field Behavior". American Economic Review 103(1).
We study risk attitudes, ambiguity attitudes, and time preferences of 661 children and adolescents, aged ten to eighteen years, in an incentivized experiment and relate experimental choices to field behavior. Experimental measures of impatience are found to be significant predictors of health-related field behavior, saving decisions, and conduct at school. In particular, more impatient children and adolescents are more likely to spend money on alcohol and cigarettes, have a higher body mass index, are less likely to save money, and show worse conduct at school. Experimental measures for risk and ambiguity attitudes are only weak predictors of field behavior.
van Kleef, Ellen., Otten, Kai., and van Trijp, Hans CM. (2012). "Healthy snacks at the checkout counter: A lab and field study on the impact of shelf arrangement and assortment structure on consumer choices". BMC Public Health 12(1072).
Both a lab and field study applied a two-factor experimental design manipulating snack offerings both in an on-screen choice environment and a natural environment (hospital staff restaurant). Shelf arrangement (i.e. accessibility) was altered by putting healthy snacks at higher shelves versus lower shelves. Assortment structure (i.e. availability) was altered by offering an assortment that either included 25% or 75% healthy snacks. Participants in the lab study (n = 158) made a choice from a shelf display. A brief survey following snack selection asked participants to evaluate the assortment and their choice. The field experiment took place in a hospital canteen. Daily sales data were collected for a period of four weeks. On completion of the field study, employees (n = 92) filled out a questionnaire about all four displays and rated their attractiveness, healthiness and perceived freedom of choice. The lab study showed a higher probability of healthy snack choice when 75% of the assortment consisted of healthy snacks compared to conditions with 25% healthy snack assortments, even though choices were not rated less satisfying or more restrictive. Regarding shelf display location of healthy snacks, no significant differences were observed. There was also no significant shelf arrangement by assortment structure interactive effect. The field study replicated these findings, in that this assortment structure led to higher sales of healthy snacks. Sales of unhealthy and total snacks were not impacted by manipulations (no main or interaction effects). Employees preferred shelf displays including a larger healthy snack assortment located at top shelves. Employees also felt more freedom in choice when healthy snacks were displayed at top shelves compared to lower shelves.
Voors, Maarten., Turley, Ty., Kontoleon, Andreas., Bulte, Erwin., and List, John A. (2011). "Exploring whether behavior in context-free experiments is predictive of behavior in the field: Evidence from lab and field experiments in rural Sierra Leone". Economics Letters 114.
We use a sample of subsistence farmers in Sierra Leone as respondents to compare behavior in a context-free experiment (a standard public goods game) and behavior in the field (a real development intervention). There is no meaningful correlation in behavior across contexts. This casts doubt on the prospect of using lab experiments as ''predictors'' of behavior in real life.
Paid Research Experience Posts
There is an opportunity for paid research experience assisting the development of the behavioural science and policy research group at UCD working with Professor Liam Delaney. Tasks include those below. Please note these are temporary positions and we also will advertise longer term positions as they arise. The typical duration will be from 6 to 12 weeks, with pay varying from 11 euro to 13 euro per hour depending on experience. Please send your CV to geary@ucd.ie The posts would be particularly suited to economics and psychology graduates with a high degree of research aptitude and interest.
a) Assisting with events and social media relating to the research activities of the group, including minuting the weekly meetings.
b) Assisting in the background research on a book on the history of economics and psychology
c) Assisting in the development of a measurement methodology for examining decisions in everyday contexts.
d) Assisting in the background research for the development of an ethics framework for behavioural public policy.
e) Assisting on projects in the areas of health, environment, and education.
f) Assisting on the development of research funding proposals in the area of behavioural public policy
Ethics of Behavioural Science Policy
One of the three key themes of the new group in Dublin will be to examine the ethical aspects of behavioural science applications in policy. See the link here for a recent workshop we conducted in this area joint with Stirling Behavioural Science Centre and Newcastle University Law School. The readings below gives a sense of the interest in the ethical implications of nudging. I have been updating this list throughout the last three years as part of developing our teaching programme. But more generally, ethical issues are always worth thinking about when devising and evaluating interventions that will impact upon people. Sunstein, in particular, has been responding at length to various ethical critiques of Nudge and if you haven't got time to get through the hundreds of pages below his recent paper on this is a good and readable way of getting into the debate and also his recent book here. Suggestions on other papers and streams of research in this area welcome - see a reading list I prepared here on the broader policy implications.
Please check if you are using any of the below whether a more recent version is available and also check on the precise citation. This is a blogpost intended to give people a sense of the extent of the literature not a formal review.
Akerlof, George A. and Robert J. Shiller, 2015, Phishing for Phools: The Economics of Manipulation and Deception, Princeton: Princeton University Press.
Ever since Adam Smith, the central teaching of economics has been that free markets provide us with material well-being, as if by an invisible hand. In Phishing for Phools, Nobel Prize–winning economists George Akerlof and Robert Shiller deliver a fundamental challenge to this insight, arguing that markets harm as well as help us. As long as there is profit to be made, sellers will systematically exploit our psychological weaknesses and our ignorance through manipulation and deception. Rather than being essentially benign and always creating the greater good, markets are inherently filled with tricks and traps and will "phish" us as "phools." Phishing for Phools therefore strikes a radically new direction in economics, based on the intuitive idea that markets both give and take away. Akerlof and Shiller bring this idea to life through dozens of stories that show how phishing affects everyone, in almost every walk of life. We spend our money up to the limit, and then worry about how to pay the next month's bills. The financial system soars, then crashes. We are attracted, more than we know, by advertising. Our political system is distorted by money. We pay too much for gym memberships, cars, houses, and credit cards. Drug companies ingeniously market pharmaceuticals that do us little good, and sometimes are downright dangerous. Phishing for Phools explores the central role of manipulation and deception in fascinating detail in each of these areas and many more. It thereby explains a paradox: why, at a time when we are better off than ever before in history, all too many of us are leading lives of quiet desperation. At the same time, the book tells stories of individuals who have stood against economic trickery—and how it can be reduced through greater knowledge, reform, and regulation.
Aggarwal et al (2014). "Nudge" in the clinical consultation – an acceptable form of medical paternalism? BMC Medical Ethics 2014, 15:31.
Overall the extremes of autonomy and paternalism are not compatible in a responsive, responsible and moral health care environment, and thus some compromise of these values is unavoidable. Nudge techniques are widely used in policy making and we demonstrate how they can be applied in shared medical decision making. Whether or not this is ethically sound is a matter of continued debate but health care professionals cannot avoid the fact they are likely to be using nudge within clinical consultations. Acknowledgment of this will lead to greater self-awareness, reflection and provide further avenues for debate on the art and science of clinical communication.
Alemanno (2016). The Future of Behavioural Change: Balancing Public Nudging vs Private Nudging. 2nd AIM Lecture, May 6, 2015.
Public authorities, including the European Union and its Member States, are increasingly interested in exploiting behavioral insights through public action. They increasingly do so through choice architecture, i.e. the alteration of the environment of choice surrounding a particular decision making context in areas as diverse as energy consumption, tax collection and public health. In this regard, it is useful to distinguish between two situations. The first is that of a public authority which seeks to steer behaviour in the public interest, taking into account one or more mental shortcuts. Thus, a default enrollment for organ donation leverages on the power of inertia to enhance the overall prevalence organ donors. Placing an emoticon (sad face) or a set of information about average consumption on a prohibitive energy bill has the potential to nudge consumers towards less energy consumption. I call this pure public nudging. The second perspective is when public authorities react to exploitative uses of mental shortcuts by market forces by regulating private nudging. I call this 'counter-nudging'. Pure public nudging helps people correct mental shortcuts so as to achieve legitimate objectives (e.g. increased availability of organs, environmental protection, etc.), regardless of their exploitative use by market forces.
It is against this proposed taxonomy that the 2nd AIM Lecture examines whether also private companies may nudge for good. Are corporations well-placed to nudge their customers towards societal objectives, such as the protection of the environment or the promotion of public health? This is what I call benign corporate nudging.
Their record is far from being the most credible. Companies have used behavioural inspired interventions to maximize profits, what led them to sell more and in turn to induce citizens into more consumption. Yet corporate marketing need not always be self-interested. An incipient number of companies are using their brand, generally through their packaging and marketing efforts, to 'nudge for good'. By illustrating some actual examples, this lecture defines the conditions under which companies may genuinely and credibly nudge for good. It argues that benign corporate nudging may have – unlike dominant CSR efforts – a positive long-term, habit-forming effect that influences consumers' future behaviour 'for good'.
Alemanno & Sibony (2015). Nudge and the Law: A European Perspective. Oxford & Portland: Hart.
Behavioural sciences help refine our understanding of human decision-making. Their insights are immensely relevant for policy-making since public intervention works much better when it targets real people rather than imaginary beings assumed to be perfectly rational. Increasingly, governments around the world are keen to rely on those insights for reshaping public interventions in a wide range of policy areas such as energy, health, financial services and data protection. When policy-making meets behavioural sciences, effective and low-cost regulations can emerge in the form of default rules, smart disclosure and simplification requirements. While behaviourally-informed intervention has a huge potential for policymaking, it also attracts legitimacy and practicability concerns. Nudge and the Law takes a European perspective on those issues and explores the legal implications of the emergent phenomenon of behavioural regulation by focusing on the challenges and opportunities it may offer to EU policy-making and beyond.
"This book offers an exceptionally impressive, and wide-ranging, set of essays on behaviourally informed approaches to law and regulation in Europe, with particular reference to nudges. In Europe as elsewhere, an important question is drawing increasing attention: what are the ethical limits on nudges? Insofar as the goal is to promote navigability, the ethical objections are greatly weakened and might well dissipate. In this regard, Alemanno and Sibony offer some helpful reflections on how to assess the autonomy objection to nudges. They argue, plausibly in my view, that many behavioural interventions are neutral with respect to autonomy because they affect behaviour in instances where, in all likelihood, no deliberation would have taken place." From the Foreword by Cass R Sunstein, Harvard School of Law
Arneson (2015). Nudge and Shove. Social Theory and Practice, Volume 41, Issue 4, October 2015.
This essay reexamines the idea of paternalism and the basis for finding it objectionable in light of recent writings on "libertarian paternalism." Suggestion: to qualify as paternalistic, an interference that restricts someone's liberty or interferes with her choice-making with the aim of helping the individual must be contrary to that very individual's will. A framework for determining the justifiability of paternalistic action is proposed, under the assumption that the individual has a personal prerogative, up to a point, to engage in less than maximally beneficial action. Beyond that point, the content of the will of the individual disposed against interference can extinguish the presumptive wrongness of paternalism.
Ashcroft (2012). Doing good by stealth. J Med Ethics doi:10.1136/medethics-2012-101109
Axtell-Thompson (2012). Nudge Ethics for Health Plans. The American Journal of Bioethics, Volume 12, Issue 2.
Baldwin (2015). Nudge: Three Degrees of Concern. LSE Law - Policy Briefing Paper No. 7.
Nudging is hugely popular with governments but it is a practice that raises both conceptual and controversial issues. Three degrees of nudge can be distinguished and these raise different
concerns. When contemplating nudging, moreover, it is essential to be clear and open about the philosophical basis for such action and to be aware that clashes between different modes of
intervention may threaten not only effectiveness but also the serving of representative and ethical ends.
Baldwin (2014). From Regulation to Behaviour Change: Giving Nudge the Third Degree. The Modern Law Review, Volume 77, Issue 6, pages 831–857.
Behaviour change strategies such as 'nudge' have become hugely popular with administrations on both sides of the Atlantic. The practice of nudging, however, raises conceptual and controversial issues which must be addressed in examining the conditions under which nudging can be used effectively and acceptably. A key to a clear conceptual understanding of nudge-related issues is to distinguish between three degrees of nudge. These three degrees raise different, and identifiable, concerns and it is possible to assess the extent to which these can be responded to in positive terms. The compatibility of nudging with other control devices cannot be assumed and, when contemplating nudging, it is essential to be transparent about its philosophical basis, as well as to be aware that different modes of intervention may operate with clashes of logic that threaten not only effectiveness but also the serving of representative and ethical ends.
Barton & Grüne-Yanoff (2015). From Libertarian Paternalism to Nudging—and Beyond. Rev.Phil.Psych. 6:341–359.
Blumenthal-Barby & Burroughs (2012). Seeking Better Health Care Outcomes: The Ethics of Using the "Nudge". The American Journal of Bioethics, Volume 12, Issue 2.
Policymakers, employers, insurance companies, researchers, and health care providers have developed an increasing interest in using principles from behavioral economics and psychology to persuade people to change their health-related behaviors, lifestyles, and habits. In this article, we examine how principles from behavioral economics and psychology are being used to nudge people (the public, patients, or health care providers) toward particular decisions or behaviors related to health or health care, and we identify the ethically relevant dimensions that should be considered for the utilization of each principle.
Bell (2013). Nudging Without Ethical Fudging: Clarifying Physician Obligations to Avoid Ethical Compromise. The American Journal of Bioethics, Volume 13, Issue 6.
Borenstein & Arkin (2015). Robotic Nudges: The Ethics of Engineering a More Socially Just Human Being. Science and Engineering Ethics, pp 1-16
Robots are becoming an increasingly pervasive feature of our personal lives. As a result, there is growing importance placed on examining what constitutes appropriate behavior when they interact with human beings. In this paper, we discuss whether companion robots should be permitted to "nudge" their human users in the direction of being "more ethical". More specifically, we use Rawlsian principles of justice to illustrate how robots might nurture "socially just" tendencies in their human counterparts. Designing technological artifacts in such a way to influence human behavior is already well-established but merely because the practice is commonplace does not necessarily resolve the ethical issues associated with its implementation.
Bovens (2009). The Ethics of Nudge.
Bovens (2013). Why couldn't I be nudged to dislike a Big Mac? J Med Ethics 2013;39:495-496 doi:10.1136/medethics-2012-101110
Brehm & Brehm (1981). Psychological Reactance: a Theory of Freedom and Control. New York: Academic Press.
Brooks (2013). Should We Nudge Informed Consent? The American Journal of Bioethics
Volume 13.
Bubb & Pildes (2014). How Behavioral Economics Trims Its Sails and Why. Harvard Law Review, Vol. 127.
The preference of behavioral law and economics (BLE) for regulatory approaches that preserve "freedom of choice" has led to incomplete policy analysis and inefficient policies. BLE has been broadly regarded as among the most promising new developments in public policymaking theory and practice. As social science, BLE offers hope that better understanding of human behavior will provide a sounder foundation for policy design. As politics, BLE offers a possible political consensus built around minimalist forms of government action — "nudges" — that preserve freedom of choice. These two seductive dimensions of BLE are, however, in deep tension. Put simply, it would be surprising if the evidence documenting the failure of individual choice implied a turn toward regulatory tools that preserve individual choice.
Developing BLE fully along its social-scientific dimension would reveal two categories of recurring limitations in BLE. First, BLE often artificially excludes traditional regulatory tools, such as direct mandates, from its analysis of policy options. However, BLE's preferred nudges are, in important cases, not likely to be effective — ironically, for reasons BLE itself identifies. BLE has also neglected the ways in which behavioral failures interact with traditional market failures and the implications of this interaction for policy design. A more complete framework generates policy recommendations beyond both nudges and neoclassical economic prescriptions.
Second, BLE does not properly evaluate, at times, how its own regulatory tools actually function. Many of these seemingly choice-preserving tools are not nearly as light touch as advertised. The default rules so central to BLE are often better viewed as preserving the formality of choice while, for many individuals, functioning as effective mandates. The view that people can always rationally opt out has led policymakers to set these powerful defaults at the wrong levels, resulting in counterproductive policies. We illustrate the costs of BLE's commitment to freedom of choice by analyzing three of the most important areas for current policy: retirement savings, consumer credit, and environmental protection.
Camerer, C., Issacharoff, S., Loewenstein, G., O'donoghue, T., & Rabin, M. (2003). Regulation for Conservatives: Behavioral Economics and the Case for" Asymmetric Paternalism". University of Pennsylvania law review, 151(3), 1211-1254.
This paper examines the regulatory implications of behavioral economic insights. The central effect of behavioral economics in the legal literature to date has been to challenge the premise of formal economic theory that individuals understand their preferences and work to maximize these preferences. Behavioral economics has gathered increased attention in the economic analysis of law because of its demonstration that individual decision-making is prone to numerous biases and heuristics, and that as a result individuals may not act to realize their best interests. Part of the enthusiasm for behavioral economics in the legal literature has come from the apparent compatibility of the behavioral insights with proposals for paternalistic regulation. By pointing out some of the ways that human behavior falls short of perfect rationality, behavioral economics can potentially expand the scope of beneficial paternalistic policies that constrain individual choice. However, such policies should be implemented cautiously, given differences in opinion about what behaviors are irrational and concerns about costs imposed on people who are rational. In response to these concerns, we propose a principle for developing and evaluating regulatory policies that we term "asymmetric paternalism." Asymmetrically paternalistic regulations benefit those who would otherwise make poor decisions, but impose little or no costs on those who behave optimally. As such, they challenges both opponents and supporters of regulation by setting forth a disciplined set of criteria by which to judge the costs and benefits of regulatory proposals. The article explores the application of this principle to several specific sources of flawed decision making identified by behavioral economics in such diverse areas as retirement savings, consumer protection, and family law, and suggests examples of already existing regulations in these fields that seem to embody the principle of asymmetric paternalism.
Christine Clavien (2018) Ethics of nudges: A general framework with a focus on shared preference justifications, Journal of Moral Education, DOI: 10.1080/03057240.2017.1408577
Nudges are soft interventions designed to influence human behaviour. They are increasingly used by policymakers around the world and generate heated controversies over their ethical acceptability. In this article, I depict nudges as science-based technologies, point to new ethical responsibilities they raise—when they are used but also when they are not used—and to the necessity of establishing clear evaluation criteria. I then elaborate a four-level framework for evaluating the acceptability of particular nudges. The second part of the article focuses specifically on 'shared preference justifications' (SPJ), that is, arguments of the sort 'nudges help people make better choices as judged by themselves'. I explain why constructing SPJs is important but difficult and propose a framework for doing so. This framework takes autonomy concerns seriously without overstating them and provides a conceptual basis for the development of nudge evaluation procedures easily applicable by decision-makers.
Cohen (2013). Nudging and Informed Consent. The American Journal of Bioethics, Volume 13, Issue 6. (attached)
Libertarian paternalism's notion of "nudging" refers to steering individual decision making so as to make choosers better off without breaching their free choice. If successful, this may offer an ideal synthesis between the duty to respect patient autonomy and that of beneficence, which at times favors paternalistic influence. A growing body of literature attempts to assess the merits of nudging in health care. However, this literature deals almost exclusively with health policy, while the question of the potential benefit of nudging for the practice of informed consent has escaped systematic analysis. This article focuses on this question. While it concedes that nudging could amount to improper exploitation of cognitive weaknesses, it defends the practice of nudging in a wide range of other conditions. The conclusion is that, when ethically legitimate, nudging offers an important new paradigm for informed consent, with a special potential to overcome the classical dilemma between paternalistic beneficence and respect for autonomy.
Nudging Health: Health Law and Behavioral Economics. Edited by I. Glenn Cohen, Holly Fernandez Lynch, and Christopher T. Robertson. John Hopkins University Press, 2016.
Behavioral nudges are everywhere: calorie counts on menus, automated text reminders to encourage medication adherence, a reminder bell when a driver's seatbelt isn't fastened. Designed to help people make better health choices, these reminders have become so commonplace that they often go unnoticed. In Nudging Health, forty-five experts in behavioral science and health policy from across academia, government, and private industry come together to explore whether and how these tools are effective in improving health outcomes. Behavioral science has swept the fields of economics and law through the study of nudges, cognitive biases, and decisional heuristics—but it has only recently begun to impact the conversation on health care. Nudging Health wrestles with some of the thorny philosophical issues, legal limits, and conceptual questions raised by behavioral science as applied to health law and policy. The volume frames the fundamental issues surrounding health nudges by addressing ethical questions. Does cost-sharing for health expenditures cause patients to make poor decisions? Is it right to make it difficult for people to opt out of having their organs harvested for donation when they die? Are behavioral nudges paternalistic? The contributors examine specific applications of behavioral science, including efforts to address health care costs, improve vaccination rates, and encourage better decision-making by physicians. They wrestle with questions regarding the doctor-patient relationship and defaults in healthcare while engaging with larger, timely questions of healthcare reform. Nudging Health is the first multi-voiced assessment of behavioral economics and health law to span such a wide array of issues—from the Affordable Care Act to prescription drugs.
Conly (2012). Against Autonomy: Justifying Coercive Paternalism. Cambridge: Cambridge University Press.
Since Mill's seminal work On Liberty, philosophers and political theorists have accepted that we should respect the decisions of individual agents when those decisions affect no one other than themselves. Indeed, to respect autonomy is often understood to be the chief way to bear witness to the intrinsic value of persons. In this book, Sarah Conly rejects the idea of autonomy as inviolable. Drawing on sources from behavioural economics and social psychology, she argues that we are so often irrational in making our decisions that our autonomous choices often undercut the achievement of our own goals. Thus in many cases it would advance our goals more effectively if government were to prevent us from acting in accordance with our decisions. Her argument challenges widely held views of moral agency, democratic values and the public/private distinction, and will interest readers in ethics, political philosophy, political theory and philosophy of law.
Coons & Weber (2014). Manipulation: Theory And Practice. Oxford University Press.
In all groups ― from couples to nation-states ― people influence one another. Much of this influence is benign, for example giving advice to friends or serving as role models for our children and students. Some forms of influence, however, are clearly morally suspect, such as threats of violence and blackmail. A great deal of attention has been paid to one form of morally suspect influence, namely coercion. Less attention has been paid to what might be a more pervasive form of influence: manipulation. The essays in this volume address this relative imbalance by focusing on manipulation, examining its nature, moral status, and its significance in personal and social life.
They address a number of central questions: What counts as manipulation? How is it distinguished from coercion and ordinary rational persuasion? Is it always wrong, or can it sometimes be justified, and if so, when? Is manipulative influence more benign than coercion? Can one manipulate unintentionally? How does being manipulated to act bear on one's moral responsibly for so acting? Given various answers to these questions, what should we think of practices such as advertising and seduction?
Department of Health, Ireland (2015) "Nudging in Public Health – An Ethical Framework A Report by the National Advisory Committee on Bioethics".
Darwall (2006). The Value of Autonomy and Autonomy of the Will. Ethics 116: 263–284.
Disilvestro (2012). What Does Not Budge for Any Nudge? The American Journal of Bioethics,
Volume 12, Issue 2.
Dworkin (2013). Lying and nudging. J Med Ethics 2013;39:496-497 doi:10.1136/medethics-2012-101060
Eyal (2014). Nudging by shaming, shaming by nudging. Int J Health Policy Manag. 2014 Jul; 3(2): 53–56.
Eyal (2008). Motivating Prevention: from Carrots and Sticks to "Carrots" and "Sticks". AMA Journal of Ethics, Volume 10, Number 11: 756-762.
Felsen & Reiner (2015). What can Neuroscience Contribute to the Debate Over Nudging? Review of Philosophy and Psychology, September 2015, Volume 6, Issue 3, pp 469-479.
Strategies for improving individual decision making have attracted attention from a range of disciplines. Surprisingly, neuroscience has been largely absent from this conversation, despite the fact that it has recently begun illuminating the neural bases of how and why we make decisions, and is poised for further such advances. Here we address empirical and normative questions about "nudging" through the lens of neuroscience. We suggest that the neuroscience of decision making can provide a framework for understanding how nudges work, and how they can be improved. Towards this end, we first examine how nudges can be incorporated into a leading model of decision making supported by neurobiological data, and use the model to make predictions about the relative effectiveness of different classes of nudges. We then use the model to demonstrate how nudges can both infringe upon and promote autonomy. Finally, we explore the normative implications of the converging consensus from neuroscience and related fields that many everyday decisions are susceptible to covert external influences.
Felson et al (2013). Decisional enhancement and autonomy: public attitudes towards overt and covert nudges. Judgment and Decision Making, Vol. 8, No. 3, pp. 202–213.
Ubiquitous cognitive biases hinder optimal decision making. Recent calls to assist decision makers in mitigating these biases—via interventions commonly called "nudges"—have been criticized as infringing upon individual autonomy. We tested the hypothesis that such "decisional enhancement" programs that target overt decision making—i.e., conscious, higher-order cognitive processes—would be more acceptable than similar programs that affect covert decision making— i.e., subconscious, lower-order processes. We presented respondents with vignettes in which they chose between an option that included a decisional enhancement program and a neutral option. In order to assess preferences for overt or covert decisional enhancement, we used the contrastive vignette technique in which different groups of respondents were presented with one of a pair of vignettes that targeted either conscious or subconscious processes. Other than the nature of the decisional enhancement, the vignettes were identical, allowing us to isolate the influence of the type of decisional enhancement on preferences. Overall, we found support for the hypothesis that people prefer conscious decisional enhancement. Further, respondents who perceived the influence of the program as more conscious than subconscious reported that their decisions under the program would be more "authentic". However, this relative favorability was somewhat contingent upon context. We discuss our results with respect to the implementation and ethics of decisional enhancement.
Fischer (2015). Is Soft Paternalism Ethically Legitimate? - The Relevance of Psychological Processes for the Assessment of Nudge-Based Policies. Cologne Graduate School Working Paper.
In this article we develop a taxonomy of behavioral policy measures proposed by Thaler and Sunstein (2008). Based on this taxonomy, we discuss the ethical legitimacy of these measures. First, we explain two common reservations against nudges (choice architecture) rooted in utilitarian and Kantian ethics. In addition to wellbeing, we identify freedom of action and freedom of will (autonomy) as relevant ethical criteria. Then, using practical examples, we develop a taxonomy that classifies nudges according to the psychological mechanisms they use and separately discuss the legitimacy of several types of behavioral policy measures. We hope to thereby make a valuable contribution to the debate on the ethical legitimacy of behavioral policy making.
Floridi (2015). Tolerant Paternalism: Pro-ethical Design as a Resolution of the Dilemma of Toleration. Science and Engineering Ethics, pp 1-20.
Toleration is one of the fundamental principles that inform the design of a democratic and liberal society. Unfortunately, its adoption seems inconsistent with the adoption of paternalistically benevolent policies, which represent a valuable mechanism to improve individuals' well-being. In this paper, I refer to this tension as the dilemma of toleration. The dilemma is not new. It arises when an agent A would like to be tolerant and respectful towards another agent B's choices but, at the same time, A is altruistically concerned that a particular course of action would harm, or at least not improve, B's well-being, so A would also like to be helpful and seeks to ensure that B does not pursue such course of action, for B's sake and even against B's consent. In the article, I clarify the specific nature of the dilemma and show that several forms of paternalism, including those based on ethics by design and structural nudging, may not be suitable to resolve it. I then argue that one form of paternalism, based on pro-ethical design, can be compatible with toleration and hence with the respect for B's choices, by operating only at the informational and not at the structural level of a choice architecture. This provides a successful resolution of the dilemma, showing that tolerant paternalism is not an oxymoron but a viable approach to the design of a democratic and liberal society.
Gigerenzer (2015). On the Supposed Evidence for Libertarian Paternalism. Review of Philosophy and Psychology, Volume 6, Issue 3, pp 361-383.
Can the general public learn to deal with risk and uncertainty, or do authorities need to steer people's choices in the right direction? Libertarian paternalists argue that results from psychological research show that our reasoning is systematically flawed and that we are hardly educable because our cognitive biases resemble stable visual illusions. For that reason, they maintain, authorities who know what is best for us need to step in and steer our behavior with the help of "nudges." Nudges are nothing new, but justifying them on the basis of a latent irrationality is. In this article, I analyze the scientific evidence presented for such a justification. It suffers from narrow logical norms, that is, a misunderstanding of the nature of rational thinking, and from a confirmation bias, that is, selective reporting of research. These two flaws focus the blame on individuals' minds rather than on external causes, such as industries that spend billions to nudge people into unhealthy behavior. I conclude that the claim that we are hardly educable lacks evidence and forecloses the true alternative to nudging: teaching people to become risk savvy.
Glaeser (2005). Paternalism and Psychology. NBER Working Paper No. 11789
Glod (2015). How Nudges Often Fail to Treat People According to Their Own Preferences.Social Theory & Practice, Vol. 41 Issue 4, p 599-617. (attached)
I focus on "prima facie problematic" (PFP) nudges to argue that libertarian paternalism often fails in its promise to track target agents' own normative standards. I argue that PFP nudges are unjustified to significant numbers of people by virtue of autonomy-based defeaters—what I call "self-determination" and "discretion." I then argue that in many cases, we face informational constraints on what a person's good really is. In such cases, these nudges may not even benefit a significant number of agents and so fail even to be paternalistic—where "paternalistic" is a success term—for those they fail to benefit.
Gold & Lichetenburg (2012). Don't Call Me "Nudge": The Ethical Obligation to Use Effective Interventions to Promote Public Health. The American Journal of Bioethics, Volume 12, Issue 2.
Goodwin (2012). Why We Should Reject 'Nudge'. Politics, Volume 32, Issue 2, pages 85–92.
This article argues that the use of 'nudge' tactics in UK policymaking ought to be rejected. Nudge contravenes the coalition government's aspirations to promote ideas such as empowerment, freedom and fairness. Moreover, it is not an effective strategy for bringing about the kind of behavioural changes required to solve society's 'big problems'– problems around climate change and public health, for example. The article mines political theory in a way that is distinctly absent from the current literature on 'nudging' and brings a fresh and insightful perspective to the nudge debate.
Grüne-Yanoff & Hertwig (2015). Nudge Versus Boost: How Coherent are Policy and Theory? Minds and Machines, pp 1-35.
If citizens' behavior threatens to harm others or seems not to be in their own interest (e.g., risking severe head injuries by riding a motorcycle without a helmet), it is not uncommon for governments to attempt to change that behavior. Governmental policy makers can apply established tools from the governmental toolbox to this end (e.g., laws, regulations, incentives, and disincentives). Alternatively, they can employ new tools that capitalize on the wealth of knowledge about human behavior and behavior change that has been accumulated in the behavioral sciences (e.g., psychology and economics). Two contrasting approaches to behavior change are nudge policies and boost policies. These policies rest on fundamentally different research programs on bounded rationality, namely, the heuristics and biases program and the simple heuristics program, respectively. This article examines the policy–theory coherence of each approach. To this end, it identifies the necessary assumptions underlying each policy and analyzes to what extent these assumptions are implied by the theoretical commitments of the respective research program. Two key results of this analysis are that the two policy approaches rest on diverging assumptions and that both suffer from disconnects with the respective theoretical program, but to different degrees: Nudging appears to be more adversely affected than boosting does. The article concludes with a discussion of the limits of the chosen evaluative dimension, policy–theory coherence, and reviews some other benchmarks on which policy programs can be assessed.
Guala & Mittone (2015). A Political Justification of Nudging. Review of Philosophy and Psychology, Volume 6, Issue 3, pp 385-395.
Thaler and Sunstein justify nudge policies from welfaristic premises: nudges are acceptable because they benefit the individuals who are nudged. A tacit assumption behind this strategy is that we can identify the true preferences of decision-makers. We argue that this assumption is often unwarranted, and that as a consequence nudge policies must be justified in a different way. A possible strategy is to abandon welfarism and endorse genuine paternalism. Another one is to argue that the biases of decision that choice architects attempt to eliminate create externalities. For example, in the case of intertemporal discounting, the costs of preference reversals are not always paid by the discounters, because they are transferred onto other individuals. But if this is the case, then nudges are best justified from a political rather than welfaristic standpoint.
Guldborg Hansen et al (2016). Making Healthy Choices Easier: Regulation versus Nudging. Annual Review of Public Health, Review in Advance, first posted online on January 6, 2016.
In recent years, the nudge approach to behavior change has emerged from the behavioral sciences to challenge the traditional use of regulation in public health strategies to address modifiable individual-level behaviors related to the rise of noncommunicable diseases and their treatment. However, integration and testing of the nudge approach as part of more comprehensive public health strategies aimed at making healthy choices easier are being threatened by inadequate understandings of its scientific character, its relationship with regulation, and its ethical implications. This article reviews this character and its ethical implication with a special emphasis on the compatibility of nudging with traditional regulation, special domains of experience, and the need for a more nuanced approach to the ethical debate. The aim is to advance readers' understanding and give guidance to those who have considered working with or incorporating the nudge approach into programs or policies aimed at making healthful choices easier.
Hagman et al (2015). Public Views on Policies Involving Nudges. Review of Philosophy and Psychology, Volume 6, Issue 3, pp 439-453.
When should nudging be deemed as permissible and when should it be deemed as intrusive to individuals' freedom of choice? Should all types of nudges be judged the same? To date the debate concerning these issues has largely proceeded without much input from the general public. The main objective of this study is to elicit public views on the use of nudges in policy. In particular we investigate attitudes toward two broad categories of nudges that we label pro-self (i.e. focusing on private welfare) and pro-social (i.e. focusing on social welfare) nudges. In addition we explore how individual differences in thinking and feeling influence attitudes toward nudges. General population samples in Sweden and the United States (n = 952) were presented with vignettes describing nudge-policies and rated acceptability and intrusiveness on freedom of choice. To test for individual differences, measures on cultural cognition and analytical thinking were included. Results show that the level of acceptance toward nudge-policies was generally high in both countries, but were slightly higher among Swedes than Americans. Somewhat paradoxically a majority of the respondents also perceived the presented nudge-policies as intrusive to freedom of choice. Nudge-polices classified as pro-social had a significantly lower acceptance rate compared to pro-self nudges (p < .0001). Individuals with a more individualistic worldview were less likely to perceive nudges as acceptable, while individuals more prone to analytical thinking were less likely to perceive nudges as intrusive to freedom of choice. To conclude, our findings suggest that the notion of "one-nudge- fits-all" is not tenable. Recognizing this is an important aspect both for successfully implementing nudges as well as nuancing nudge theory.
Hanna (2015). Libertarian Paternalism, Manipulation, and the Shaping of Preferences. Social Theory and Practice, Volume 41, Issue 4.
"Libertarian paternalism" aims to harness cognitive biases in order to improve prudential decision-making. Some critics have objected that libertarian paternalism is wrongly manipulative. I argue that this objection is mostly unsuccessful. First, I point out that some strategies endorsed by libertarian paternalists can help people to better appreciate reasons. Second, I develop an account of manipulation according to which an agent manipulates her target by worsening the target's deliberative position. The means of influence defended by libertarian paternalists—for instance, the judicious use of default rules—are not manipulative in this way.
Hansen & Jespersen (2013). Nudge and the Manipulation of Choice
A Framework for the Responsible Use of the Nudge Approach to Behaviour Change in Public Policy. European Journal of Risk Regulation.
In Nudge (2008) Richard Thaler and Cass Sunstein suggested that public policy-makers arrange decision-making contexts in ways to promote behaviour change in the interest of individual citizens as well as that of society. However, in the public sphere and Academia alike widespread discussions have appeared concerning the public acceptability of nudgebased behavioural policy. Thaler and Sunstein's own position is that the anti-nudge position is a literal non-starter, because citizens are always influenced by the decision making context anyway, and nudging is liberty preserving and acceptable if guided by Libertarian Paternalism and Rawls' publicity principle. A persistent and central tenet in the criticism disputing the acceptability of the approach is that nudging works by manipulating citizens' choices. In this paper, we argue that both lines of argumentation are seriously flawed. We show how the anti-nudge position is not a literal non-starter due to the responsibilities that accrue on policy-makers by the intentional intervention in citizens' life, how nudging is not essentially liberty preserving and why the approach is not necessarily acceptable even if satisfying Rawls' publicity principle. We then use the psychological dual process theory underlying the approach as well as an epistemic transparency criterion identified by Thaler and Sunstein themselves to show that nudging is not necessarily about "manipulation", nor necessarily about influencing "choice". The result is a framework identifying four types of nudges that may be used to provide a central component for more nuanced normative considerations as well as a basis for policy recommendations.
Hayek (1958). Freedom, Reason, and Tradition. Ethics, Vol. 68, No. 4 (Jul., 1958), pp. 229-245.
Hausman & Welch (2010). Debate: to nudge or not to nudge? Journal of Political Philosophy Volume 18, Issue 1, pages 123–136.
Huang et al (2012). Nudge Ethics: Just a Game of Billiards? The American Journal of Bioethics, Volume 12, Issue 2.
John, P., (2018) "How Far to Nudge? Assessing Behavioural Public Policy", Elgar.
This book addresses the wave of innovation and reforms that has been called the nudge or behavioural public policy agenda, which has emerged in many countries since the mid-2000s. Nudge involves developing behavioural insights to solve complex policy problems, such as unemployment, obesity and the environment, as well as improving the delivery of policies by reforming standard operating procedures. It reviews the changes that have taken place, in particular the greater use of randomised evaluations, and discusses how far nudge can be used more generally in the policy process. The book argues that nudge has a radical future if it develops a more bottom up approach involving greater feedback and more engagement with citizens.
Kapsner & Sandfuchs (2015). Nudging as a Threat to Privacy. Review of Philosophy and Psychology
September 2015, Volume 6, Issue 3, pp 455-468.
Nudges can pose serious threats to citizens' privacy. The essay discusses several examples of nudges that must appear problematic to anyone valuing privacy. The paper also re-draws a well established connection between privacy and autonomy and argues that insofar as nudges incur too great a loss of privacy, they are incompatible with the libertarianism that libertarian paternalism is committed to by virtue of its very name.
Kelman, H. C. (1965). Manipulation of human behavior: An ethical dilemma for the social scientist. Journal of Social Issues, 21(2), 31-46.
The paper describes a 2-horned dilemma confronting social scientists: any manipulation of human behavior inherently violates a fundamental value of human freedom, but there is no formula for structuring an effective change situation so that such manipulation is totally absent. This dilemma has implications for practitioners, applied researchers, and basic researchers in the social sciences. In order to promote the enhancement of freedom of choice as a positive goal, research should focus on the conditions favoring a person's ability to exercise choice and to maximize his/her individual values.
Kendler, H. H. (1993). Psychology and the ethics of social policy. American Psychologist, 48(10), 1046-1053.
Psychology's ability to resolve or moderate social conflicts stemming from competing moral positions depends on whether psychology is conceptualized as a mental or behavioral science. Knowledge claims from the direct observation of consciousness cannot yield consensual agreement about valid ethical principles or correct social policies. As a behavioral science, psychology is unable to validate moral principles because of the logical impossibility of inferring ethical imperatives from empirical data. Behavioral evidence can nevertheless assist society in choosing among competing social policies by revealing their empirical consequences. To do this successfully, psychology must use natural science methodology with the aim of seeking empirical and theoretical truth, not political goals or ethical ideals.
Leggett (2012). The politics of behaviour change: nudge, neoliberalism and the state. Policy & Politics, Volume 42, Number 1, pp. 3-19(17).
Behaviour change is increasingly central to policy and politics. The exemplar of nudge, and its relationship to behavioural economics and psychology, is outlined. Nudge's claim to libertarian paternalism is evaluated in the context of the neoliberal state. A sociological critique of behavioural economic assumptions enables a still wider account of shifting state–citizen relations. Foucauldian analyses of such relations, as well as deliberative 'think' perspectives, are assessed. A more explicitly political, social-democratic model of the behaviour change state is advocated. This would be more attuned to the socioeconomic context of behaviour, and also be prepared to defend citizens against ubiquitous attempts to shape their subjectivity.
Lepenies & Małecka (2015). The Institutional Consequences of Nudging – Nudges, Politics, and the Law. Review of Philosophy and Psychology. Volume 6, Issue 3 , pp 427-437.
In this article we argue that a widespread adoption of nudging can alter legal and political institutions. Debates on nudges thus far have largely revolved around a set of philosophical theories that we call individualistic approaches. Our analysis concerns the ways in which adherents of nudging make use of the newest findings in the behavioral sciences for the purposes of policy-making. We emphasize the fact that most nudges proposed so far are not a part of the legal system and are also non-normative. We propose two ideal types: "law-as-normative" and "law-as-instrumental", that allow us to understand and evaluate the relation of nudges and the law. We stress the importance of law as a safeguard for the possible negative consequences of nudges and conclude with proposals that could complement nudging policies.
Lepenies R., Małecka M. (2018), Ethics of behavioural public policy, [in:] Poama A., Lever A., Routledge Handbook of Ethics and Public Policy, Routledge.
Public policy is increasingly informed by insights from the behavioural sciences. We highlight three aspects of behavioural public policy which can be incompatible with democratic ethics. First, policy-makers use behavioural instruments such as nudges to steer citizens' behaviour without giving reasons and by relying on non-participatory research methods. Second, behavioural public policy is frequently implemented in the form of administrative discretion by organizations which are not under direct democratic control. Third, behavioural public policy currently relies on a partial and narrow view of the behavioural sciences and is inattentive about value judgments already embedded in the research it draws upon.
Lodge & Wegrich (2016). The Rationality Paradox of Nudge: Rational Tools of Government in a World of Bounded Rationality. Law & Policy, Volume 38, Issue 3, pages 250–267, July 2016.
Nudge and the wider behavioral economics approach has become increasingly dominant in contemporary political and policy discourse. While much attention has been paid to the attractions and criticisms of nudge (such as liberal paternalism), this article argues that nudge is based on a rationality paradox in that it represents an approach that despite its emphasis on bounded rationality, does not reflect on its own limits to rationality. The article considers the implications of this paradox by considering mechanisms that influence government decision making and mechanisms that lead to unintended consequences in the context of policy interventions.
Loewenstein, G., Bryce, C., Hagmann, D., & Rajpal, S. (2015). Warning: You
are about to be nudged. Behavioral Science & Policy, 1(1), pp. 35–42.
Presenting a default option is known to influence important decisions. That includes decisions regarding advance medical directives, documents people prepare to convey which medical treatments they favor in the event that they are too ill to make their wishes clear. Some observers have argued that defaults are unethical because people are typically unaware that they are being nudged toward a decision. We informed people of the presence of default options before they completed a hypothetical advance directive, or after, then gave them the opportunity to revise their decisions. The effect of the defaults persisted, despite the disclosure, suggesting that their effectiveness may not depend on deceit. These findings may help address concerns that behavioral interventions are necessarily duplicitous or manipulative.
Lunze &, Paasche-Orlow (2013). Financial incentives for healthy behavior: ethical safeguards for behavioral economics.American Journal of Preventive Medicine, 44(6):659-65.
McCrudden & King (2015). The Dark Side of Nudging: The Ethics, Political Economy, and Law of Libertarian Paternalism. SSRN working paper.
McPherson & Smith (2008). Nudging for Liberty. Social Science Research Network.
Marteau, Theresa M. and Oliver, Adam and Ashcroft, Richard E. (2009) Changing behaviour through state intervention: when does an acceptable nudge become an unacceptable shove? British Medical Journal, 337 (a2543). 121-122. ISSN 0959-8138
Ménard (2010). A 'Nudge' for Public Health Ethics: Libertarian Paternalism as a Framework for Ethical Analysis of Public Health Interventions? Public Health Ethics, 3 (3): 229-238.
Is it possible to interfere with individual decision-making while preserving freedom of choice? The purpose of this article is to assess whether 'libertarian paternalism', a set of political and ethical principles derived from the observations of behavioural sciences, can form the basis of a viable framework for the ethical analysis of public health interventions. First, the article situates libertarian libertarianism within the broader context of the law and economics movement. The main tenets of the approach are then presented and particular attention is given to its operationalization through the notion of a 'nudge'. Essentially, a 'nudge' consists in an intervention, which aims to suggest one choice over another by gently steering individual choices in welfare-enhancing directions yet without imposing any significant limit on available choices. Finally, the article concludes that, while it fails as an overreaching framework of ethical analysis, libertarian paternalism nonetheless constitutes a valuable addition to the conceptual toolbox of public health ethics.
Meyer, M., (2018). "Ethical Considerations When Companies Study–and Fail to Study–Their Customers" The Cambridge Handbook of Consumer Privacy.
Experimentation has been a hallmark of science for 400 years, but only recently–since the
advents of the computer and the Internet–have relatively quick, inexpensive experiments at
scale become feasible for businesses. Today, the practice of companies studying their
customers is ubiquitous. In 2011, Google ran 100–200 experiments per day on its products,
services, algorithms, and designs. 1 By 2016, it was running over 10,000 experiments per
year. 2 If you are a Bing user, on any given day, you are participating in some fifteen
experiments out of the company's 200 or so concurrent daily experiments, each of which
exposes several million users to experimental conditions. 3 And if you are a Facebook user,
you are a subject in some ten experiments at any given time. 4 Yet frameworks for thinking
about the ethical conduct of research–long a mainstay of research throughout the …
Mills (2013). Why Nudges Matter: A Reply to Goodwin. Politics Volume 33, Issue 1, pages 28–36.
This article argues that, contrary to Goodwin's recent arguments, nudges are compatible with the coalition government's stated aspiration to further self-empowerment. This is because, despite its libertarian roots, nudging is compatible with the promotion of personal autonomy and thus can be used to promote self-empowerment in a non-paternalistic fashion. Further, I argue that nudging may play a valid role in tackling large-scale social problems in tandem with other traditional policy measures. Consequently, Goodwin is wrong to reject choice architecture for these reasons.
Mitchell (2005). Libertarian Paternalism Is an Oxymoron. FSU College of Law, Public Law Research Paper No. 136; FSU College of Law, Law and Economics Paper No. 05-02.
This essay considers the concept of libertarian paternalism recently advanced by Sunstein and Thaler and argues that, on close inspection, this attempt to reconcile the traditionally opposed concepts of libertarianism and paternalism fails to succeed. Most significantly, Sunstein and Thaler neglect alternative approaches to dealing with irrational choice behavior that are more consistent with libertarian principles and that make choice-framing paternalism evitable, they would subjugate the liberty of irrational individuals to a central planner's paternalistic welfare judgments, and they fail to deal with the redistributive consequences of libertarian paternalism. Libertarian paternalism, as currently formulated, is not designed to liberate individuals from their irrational tendencies but to capitalize on irrational tendencies to move citizens in directions that the paternalistic planner deems best. Libertarian paternalism does leave rational persons a way out of the central planner's paternalism, but often the exit will not be costless, as the paternalistic costs of trying to improve the welfare of irrational persons are shifted to the rational persons. While fidelity to libertarian principles leaves little room for the government to regulate irrational behavior, there are some forms of irrationality regulation more congenial to libertarian principles than Sunstein and Thaler's version of libertarian paternalism, examples of which are discussed here.
Moles (2015). Nudging for Liberals. Social Theory and Practice, Volume 41, Issue 4, October 2015.
In this article I argue that anti-perfectionist liberals can accept nudging in certain areas: in particular, they can accept nudges aimed at helping people to discharge their nonenforceable duties, and to secure personal autonomy. I claim that nudging is not disrespectful since it does not involve a comparative negative judgment on people's ability to pursue their plans, and that the judgments that motivate nudging are compatible with treating citizens as free and equal. I also claim that despite being sometimes manipulative, nudging is easy to resist and so it can be employed to pursue legitimate goals.
Mols et al (2015). Why a nudge is not enough: A social identity critique of governance by stealth. European Journal of Political Research, Volume 54, Issue 1, pages 81–98, February 2015.
Policy makers can use four different modes of governance: 'hierarchy', 'markets', 'networks' and 'persuasion'. In this article, it is argued that 'nudging' represents a distinct (fifth) mode of governance. The effectiveness of nudging as a means of bringing about lasting behaviour change is questioned and it is argued that evidence for its success ignores the facts that many successful nudges are not in fact nudges; that there are instances when nudges backfire; and that there may be ethical concerns associated with nudges. Instead, and in contrast to nudging, behaviour change is more likely to be enduring where it involves social identity change and norm internalisation. The article concludes by urging public policy scholars to engage with the social identity literature on 'social influence', and the idea that those promoting lasting behaviour change need to engage with people not as individual cognitive misers, but as members of groups whose norms they internalise and enact.
Nagatsu (2015). Social Nudges: Their Mechanisms and Justification. Review of Philosophy and Psychology, Volume 6, Issue 3, pp 481-494.
In this paper I argue that the use of social nudges, policy interventions to induce voluntary cooperation in social dilemma situations, can be defended against two ethical objections which I call objections from coherence and autonomy. Specifically I argue that the kind of preference change caused by social nudges is not a threat to agents' coherent preference structure, and that there is a way in which social nudges influence behavior while respecting agents' capacity to reason. I base my arguments on two mechanistic explanations of social nudges; the expectation-based and frame-based accounts. As a concrete example of social nudges I choose the "Don't Mess With Texas" anti-littering campaign and discuss in some detail how it worked.
Nys, Thomas RV and Bart Engelen, 2017, "Judging Nudging: Answering the Manipulation Objection", Political Studies, 65(1): 199–214. doi:10.1177/0032321716629487
Is it ever justified to 'nudge' people towards their own health? In this article, we argue that it is. We do so by arguing (1) that nudges are not necessarily – as is commonly thought – manipulative; (2) that even those nudges that are manipulative can be justified, for instance, when they preserve rather than violate people's autonomy; and (3) that even if nudges can be said to violate some people's autonomy, they can still be the legitimate outcome of genuinely democratic procedures. While we do not regard nudging as the solution to all or even most public health problems, we argue for a piecemeal approach that carefully considers its benefits and downsides in light of the various values involved and the alternatives at hand.
Noggle, Robert, "The Ethics of Manipulation", The Stanford Encyclopedia of Philosophy (Summer 2018 Edition), Edward N. Zalta (ed.), forthcoming URL = <https://plato.stanford.edu/archives/sum2018/entries/ethics-manipulation/>.
Oliver, Adam (2015) Nudging, shoving and budging: behavioural economic-informed policy Public Administration, 93 (3). 700-714. ISSN 0033-3298
In recent years, behavioural economics has gained considerable traction in the policy discourse, with a particular conceptual framework called libertarian paternalism, which informs nudge policy, dominating. Libertarian paternalism requires policies to protect individual liberty, to be focused specifically upon improving the welfare of those towards whom the intervention is targeted, and to be informed by the findings of behavioural economics. In practice, however, many of the interventions that are being advocated as nudges do not meet all of these criteria. Moreover, libertarian paternalism is not the only framework in which behavioural economics can inform policy. Coercive paternalism and behavioural regulation, frameworks that respectively underpin shove and budge policies, both use behavioural economics to inform public policy, and both face their own set of limitations. This article attempts to bring a degree of intellectual clarity to the potentially important contribution that behavioural economics can make to public policy.
Pavey & Sparks (2009). Reactance, autonomy and paths to persuasion: Examining perceptions of threats to freedom and informational value. Motivation and Emotion, Volume 33, Issue 3, pp 277-290.
Autonomy, often associated with an open and reflective evaluation of experience, is sometimes confused with reactance, which indicates resistance to persuasion attempts. Two studies examined a path model in which autonomy and reactance predicted motivation following the provision of anonymous or source-identified health-risk information, via the mediation of perceived threat to decision-making freedom and of perceived informational value. Study 1 (N = 122) investigated alcohol consumption. The results showed that autonomy was positively related to autonomous motivation and intentions to drink responsibly. Reactance negatively predicted autonomous motivation in the source-identified information condition but positively predicted autonomous motivation and intentions in the anonymous information condition. Reactance negatively predicted attitudes through the mediation of perceived threat to decision-making freedom. Study 2 (N = 145) tested our hypothesized model for smoking behavior and replicated several of the Study 1 findings. Implications for our understanding of autonomy, reactance, and responses to risk-information are discussed.
Ploug et al (2012). To nudge or not to nudge: cancer screening programmes and the limits of libertarian paternalism. J Epidemiol Community Health 2012;66:1193-1196 doi:10.1136/jech-2012-201194
Potts et al (2012). When a Nudge Becomes a Shove. The American Journal of Bioethics, Volume 12, Issue 2.
Quigley (2014). Are health nudges coercive? Monash Bioethics Review March 2014, Volume 32, Issue 1, pp 141-158.
Governments and policy-makers have of late displayed renewed attention to behavioural research in an attempt to achieve a range of policy goals, including health promotion. In particular, approaches which could be labelled as 'nudges' have gained traction with policy-makers. A range of objections to nudging have been raised in the literature. These include claims that nudges undermine autonomy and liberty, may lead to a decrease in responsibility in decision-making, lack transparency, involve deception, and involve manipulation, potentially occasioning coercion. In this article I focus on claims of coercion, examining nudges within two of the main approaches to coercion—the pressure approach and the more recent enforcement approach. I argue that coercion entails an element of control over the behaviour of agents which is not plausibly displayed by the kinds of serious examples of nudges posited in the literature.
Quigley & Stokes (2015). Nudging and Evidence-Based Policy in Europe: Problems of Normative Legitimacy and Effectiveness. In Alemanno & Sibony (eds.) Nudge and the Law: A European Perspective. Bloomsbury.
Mills (2015). The Heteronomy of Choice Architecture. Review of Philosophy and Psychology,
Volume 6, Issue 3, pp 495-509.
Choice architecture is heralded as a policy approach that does not coercively reduce freedom of choice. Still we might worry that this approach fails to respect individual choice because it subversively manipulates individuals, thus contravening their personal autonomy. In this article I address two arguments to this effect. First, I deny that choice architecture is necessarily heteronomous. I explain the reasons we have for avoiding heteronomous policy-making and offer a set of four conditions for non-heteronomy. I then provide examples of nudges that meet these conditions. I argue that these policies are capable of respecting and promoting personal autonomy, and show this claim to be true across contrasting conceptions of autonomy. Second, I deny that choice architecture is disrespectful because it is epistemically paternalistic. This critique appears to loom large even against non-heteronomous nudges. However, I argue that while some of these policies may exhibit epistemically paternalistic tendencies, these tendencies do not necessarily undermine personal autonomy. Thus, if we are to find such policies objectionable, we cannot do so on the grounds of respect for autonomy.
Qizilbash (2009). Well-Being, Preference Formation and the Danger of Paternalism. Papers on Economics and Evolution, # 0918, Max Planck Institute of Economics.
Informed or rational desire, capability and prudential value list views of well-being - must
accommodate human limitations, as well as address issues about adaptation and paternalism. They
sometimes address adaptation by toughening the requirement(s) on those desires, satisfaction of which constitutes well-being. That exacerbates a concern that these accounts if adopted will encourage policies which override actual desires and enforce paternalistic restrictions. Sunstein, like Sen, invokes democratic deliberation to address the adaptation problem, and advocates autonomy
promoting paternalistic restrictions. Sunstein and Thaler's 'libertarian paternalism' extends this
flavour of argument to cover examples of irrationality from behavioural economics. Their variation of the informed desire account involves highly idealized preferences which cannot, in practical terms,
guide a paternalistic social planner, but lead to a potentially large range of cases where paternalistic
intervention might, in principle, be justified. I argue that the liberal paternalist policy agenda should
as currently conceived be resisted.
Quong (2010). Liberalism without Perfection. OUP.
A growing number of political philosophers favour a view called liberal perfectionism. According to this view, liberal political morality is characterised by a commitment to helping individuals lead autonomous lives and making other valuable choices. In this book Jonathan Quong rejects this widely held view and offers an alternative account of liberal political morality. Quong argues that the liberal state should not be engaged in determining what constitutes a valuable or worthwhile life nor trying to make sure that individuals live up to this ideal. Instead, it should remain neutral on the issue of the good life, and restrict itself to establishing the fair terms within which individuals can pursue their own beliefs about what gives value to their lives. The book thus defends a position known as political liberalism. The first part of the book subjects the liberal perfectionist position to critical scrutiny, advancing three major objections that raise serious doubts about the liberal perfectionist position with regard to autonomy, paternalism, and political legitimacy. The latter chapters then present and defend a distinctive version of political liberalism. In particular, Quong clarifies and develops political liberalism's central thesis: that political principles, in order to be legitimate, must be publicly justifiable to reasonable people. Drawing on the work of John Rawls, Quong offers his own interpretation of this idea, and rebuts some of the main objections that have been pressed against it. In doing so, the book offers novel arguments regarding the nature of an overlapping consensus, the structure of political justification, the idea of public reason, and the status of unreasonable persons.
Raz, J. (1986) The Morality of Freedom. Oxford: Clarendon Press.
Raihani (2015). Nudge politics: efficacy and ethics. Frontiers in Psychology, 4: 972.
Rebonato (2012). Taking Liberties: A Critical Examination of Libertarian Paternalism. Palgrave Macmillan.
Libertarian Paternalism has been hailed by its proponents as the 'true Third Way'. It attempts to reconcile paternalism and libertarianism, and claims to provide freedom-preserving solutions to some of the most intractable problems faced by contemporary Western societies. The bounded rationality of voters is not ignored, but is exploited for their greater good. The approach is cheap to implement, and, its proponents claim, often very effective. What is there to dislike?
In Taking Liberties, Rebonato examines whether the freedom-preserving claims of libertarian paternalism truly stand up to scrutiny; questions the degree of effective decisional autonomy it affords; and raises concerns about the transparency deficit of the programme and about its supposed value-neutrality. Taking Liberties argues that libertarian paternalism fails to respect decisional autonomy exactly if individuals truly are as cognitively impaired as libertarian paternalists claim. If this is the case, exploiting the citizens' decisional deficiencies (even for the own good) poses difficult moral and political issues, which are largely ignored in the libertarian paternalistic literature. If, on the other hand, the cognitive shortcomings of individuals are not as pervasive and 'hard-wired' as the behavioural finance literature seems to suggest – and Rebonato reports convincing evidence to this effect – a completely different programme, aimed at improving the quality of the whole decision process, not just of the outcomes, becomes more desirable and defensible.
If we accept that some degree of paternalistic intervention by the state is desirable, Rebonato argues that, paradoxically, a hard, transparent and highly visible form of paternalism may be more desirable – if for no other reason than for the ability it gives voters to reject it. As they engage in this process of acceptance or rejection, Rebonato claims, citizens and voters make use of their critical faculties, engaging in a process that has value over and above a narrow evaluation of the outcomes. The libertarian paternalistic alternative is not attractive: by accepting the supposed cognitive limitations of individuals as inevitable, and by attempting to systematically exploit them, libertarian paternalism can dull our critical faculties, and, in the end, the programme can become a self-fulfilling prophecy. This is not a perspective than any true libertarian should cherish. 'The slumber of reason generates monsters', Goya wrote. Turning these monsters into pleasant dreams without waking up the sleeper may be possible. But is it desirable? In Taking Liberties, Rebonato argues that it is not.
Saghai (2013). Salvaging the concept of nudge. J Med Ethics, 39:487-493
In recent years, 'nudge' theory has gained increasing attention for the design of population-wide health interventions. The concept of nudge puts a label on efficacious influences that preserve freedom of choice without engaging the influencees' deliberative capacities. Given disagreements over what it takes genuinely to preserve freedom of choice, the question is whether health influences relying on automatic cognitive processes may preserve freedom of choice in a sufficiently robust sense to be serviceable for the moral evaluation of actions and policies. In this article, I offer an argument to this effect, explicating preservation of freedom of choice in terms of choice-set preservation and noncontrol. I also briefly explore the healthcare contexts in which nudges may have priority over more controlling influences.
Sawicki (2016). Ethical Limitations on the State's Use of Arational Persuasion. Law & Policy
Volume 38, Issue 3, pages 211–233, July 2016.
Policy makers frequently use arational appeals and nudges—such as those relying on emotion, cognitive biases, and subliminal messaging—to persuade citizens to adopt behaviors that support public goals. However, these communication tactics have been widely criticized for relying on arational triggers rather than reasoned argument. This article develops a fuller account of the nonconsequentialist objection to arational persuasion by state actors, focusing on theories of decisional autonomy and metadecisional voluntariness. The article concludes by proposing ethically justifiable limitations on state communications that should be compelling to both critics and advocates of arational persuasion.
Schnellenbach, J. (2016). A constitutional economics perspective on soft paternalism. Kyklos, 69(1), 135-156.
Using a framework that distinguishes short‐term consumer preferences, individual reflective preferences and political preferences, we discuss from a constitutional economics perspective whether individuals find it in their common constitutional interest to endow representatives and bureaucrats with the competence to impose soft paternalist policies. The focus is specifically on soft paternalist policies, because these often work with non‐transparent "nudges" that are considered as manipulative in some contributions to the literature. We show that those soft paternalist policies that are manipulative indeed collide with three criteria of consumer sovereignty, reflective sovereignty, and citizen sovereignty that can be argued to represent common constitutional interest of citizens. On the other hand, we argue that the set of paternalist policies that is deemed acceptable on the constitutional level is restricted to non‐manipulative instruments, and their application as government policies is limited to cases with stable and very homogenous preferences. However, we also argue that competitive markets are capable of supplying many mechanisms that allow individuals to cope with problems in their decision‐making processes on a private level.
Schubert (2015). On the ethics of public nudging: Autonomy and Agency. Joint Discussion Paper Series in Economics by the Universities of Aachen · Gießen · Göttingen Kassel · Marburg · Siegen
Nudges, i.e., low-cost interventions that steer people's behavior without compromising their freedom of choice, are the key contribution of 'Libertarian Paternalism' (LP) to public policy. They typically work through either harnessing or responding to people's cognitive biases and heuristics – which is why they have been criticized for being manipulative and for compromising personal autonomy. We argue, though, that (i) nudging hardly compromises autonomy, properly understood, and that (ii) it rather risks undermining people's agency, i.e., their ability to engage in creative self-constitution over time. This reorientation has farranging implications for the ethics of behavioral policies in general and LP in particular.
Schubert, C., (2017) "Green nudges: Do they work? Are they ethical?". Ecological Economics
Volume 132, February 2017, Pages 329-342
Environmental policies are increasingly informed by behavioral economics insights. 'Green nudges' in particular have been suggested as a promising new tool to encourage consumers to act in an environmentally benign way, such as choosing renewable energy sources or saving energy. While there is an emerging literature on the instrumental effectiveness of behavioral policy tools such as these, their ethical assessment has largely been neglected. This paper attempts to fill this gap by, first, providing a structured overview of the most important contributions to the literature on pro-environmental nudges and, second, offering some critical considerations that may help the practitioner come to an ethically informed assessment of nudges.
Scrinis & Parker (2016). Front-of-Pack Food Labeling and the Politics of Nutritional Nudges. Law & Policy, Volume 38, Issue 3, pages 234–249, July 2016.
This article examines the potential for new front-of-pack (FOP) nutrition labeling initiatives to nudge consumers toward healthier food choices. The libertarian-paternalist approach to policy known as nudge initially developed by Thaler and Sunstein is discussed, with its emphasis on designing spaces (including the space of the food label) to shape the behavior of individuals while not restricting consumer choice or imposing restrictions or penalties on producers. In the context of concerns over diet-related chronic diseases and obesity, new FOP interpretive nutrition labels have been proposed or implemented in an attempt to shift consumer dietary choices, including the Multiple Traffic Light labeling system in the United Kingdom and the Health Star Rating system in Australia. We identify some of the characteristics, the underlying nutritional philosophies, and the limitations of these FOP labeling schemes. We suggest that the potential of these schemes is compromised by the coexistence on the food label of many other forms of nutrition information and food marketing. Some alternative ways of labeling and communicating the nutritional quality of foods are also discussed.
Sher, Shlomo, 2011, "A Framework for Assessing Immorally Manipulative Marketing Tactics", Journal of Business Ethics, 102(1): 97–118. doi:10.1007/s10551-011-0802-4
A longstanding debate exists in both academic literature and popular culture about whether non-informative marketing tactics are manipulative. However, given that we tend to believe that some marketing tactics are manipulative and some are not, the question that marketers, their critics, and consumers need to ask themselves is that of how to actually determine whether any particular marketing tactic is manipulative and whether a given manipulative tactic is, in fact, immoral. This article proposes to operationalize criteria that can be used by marketers for making such determinations and attempts to provide some clarification toward our under- standing of the concept of manipulation and the conditions for the moral acceptability of manipulative marketing practices. It argues that a marketing tactic is manipulative if it is intended to motivate by undermining what the marketer believes is his/her audience's normal decision-making process either by deception or by playing on a vulnerability that the marketer believes exists in his/her audience's normal decision-making process. Such a tactic is morally objectionable on several grounds, which make it morally impermissible unless outweighed by sufficient "redemptive" moral considerations.
Selinger & Whyte (2011). Is There a Right Way to Nudge? The Practice and Ethics of Choice Architecture. Sociology Compass, Volume 5, Issue 10, pages 923–935.
Cass Sunstein and Richard Thaler's Nudge: Improving Decisions about Health, Wealth, and Happiness presents an influential account of why 'choice architecture' should be used to 'nudge' people into making better decisions than they would otherwise make. In this essay we: (1) explain the main concepts that Thaler and Sunstein rely upon to defend their project; (2) clarify the main conceptual problems that have arisen in discussions about nudges; (3) clarify practical difficulties that can arise during nudge practice; (4) review the main ethical and political objections that have been raised against nudging; and (5) clarify why issues related to meaning can pose methodological problems for creating effective choice architecture.
Smith, N. C., Goldstein, D. G., & Johnson, E. J. (2013). Choice without awareness: Ethical and policy implications of defaults. Journal of Public Policy & Marketing, 32(2), 159-172.
Defaults have such powerful and pervasive effects on consumer behavior that they could be considered "hidden persuaders" in some settings. Ignoring defaults is not a sound option for marketers or consumer policy makers. The authors identify three theoretical causes of default effects—implied endorsement, cognitive biases, and effort—to guide thought on the appropriate marketer and policy maker responses to the issues posed for consumer welfare and consumer autonomy, including proposals for benign "nudges" of behavior. Defaults can be a preferred form of decision architecture; that is, other nonconscious influences on choice and an absence of established preferences can mean that active choice is not always the better alternative. The authors propose "smart defaults" as welfare-enhancing and market-oriented alternatives to the current practice of generally ignoring default effects. Their analysis highlights the importance of considering the process as well as the outcomes of consumer decision making and taking responsibility for consumers' mistakes arising from misuse of defaults. The authors conclude by reflecting on the ethical and policy implications of techniques that influence consumer choice without awareness.
Sugden (2008). Why incoherent preferences do not justify paternalism. Constitutional Political Economy, Volume 19, Issue 3, pp 226-248.
A variety of recent arguments emerging from behavioural economics claim to undermine the credibility, and even the conceptual coherence, of the economist's traditional rejection of paternalism. Indeed, some suggest that the incoherent nature of preferences inevitably implies a form of paternalism, since some basis for officiating between expressed preferences is required, and some preferences will be over-ridden in favour of others. This paper reviews and contests these arguments. It argues that markets operate according to a normatively defensible and non-paternalistic principle of mutual advantage, and that this principle does not require preferences to be coherent.
Sunstein (2006). Preferences, Paternalism, and Liberty. Royal Institute of Philosophy Supplement, Volume 59, December 2006, pp 233-264.
Our goal in this chapter is to draw on empirical work about preference formation and welfare to propose a distinctive form of paternalism, libertarian in spirit, one that should be acceptable to those who are firmly committed to freedom of choice on grounds of either autonomy or welfare. Indeed, we urge that a kind of 'libertarian paternalism' provides a basis for both understanding and rethinking many social practices, including those that deal with worker welfare, consumer protection, and the family.
Sunstein (2015). Why Nudge?: The Politics of Libertarian Paternalism. Yale University Press.
Based on a series of pathbreaking lectures given at Yale University in 2012, this powerful, thought-provoking work by national best-selling author Cass R. Sunstein combines legal theory with behavioral economics to make a fresh argument about the legitimate scope of government, bearing on obesity, smoking, distracted driving, health care, food safety, and other highly volatile, high-profile public issues. Behavioral economists have established that people often make decisions that run counter to their best interests—producing what Sunstein describes as "behavioral market failures." Sometimes we disregard the long term; sometimes we are unrealistically optimistic; sometimes we do not see what is in front of us. With this evidence in mind, Sunstein argues for a new form of paternalism, one that protects people against serious errors but also recognizes the risk of government overreaching and usually preserves freedom of choice.
Against those who reject paternalism of any kind, Sunstein shows that "choice architecture"—government-imposed structures that affect our choices—is inevitable, and hence that a form of paternalism cannot be avoided. He urges that there are profoundly moral reasons to ensure that choice architecture is helpful rather than harmful—and that it makes people's lives better and longer.
Sunstein (2015). Nudging and Choice Architecture: Ethical Considerations. Yale Journal on Regulation.
Is nudging unethical? Is choice architecture a problem for a free society? This essay defends seven propositions: (1) It is pointless to object to choice architecture or nudging as such. Choice architecture cannot be avoided. Nature itself nudges; so does the weather; so do customs and traditions; so do spontaneous orders and invisible hands. The private sector inevitably nudges, as does the government. It is reasonable to worry about nudges by government and to object to particular nudges, but not to nudging in general. (2) In this context, ethical abstractions (for example, about autonomy, dignity, manipulation, and democratic self-government) can create serious confusion. To make progress, those abstractions must be brought into contact with concrete practices. Nudging and choice architecture take highly diverse forms, and the force of an ethical objection depends on the specific form. (3) If welfare is our guide, much nudging is actually required on ethical grounds, even if it comes from government. (4) If autonomy is our guide, much nudging is also required on ethical grounds, in part because some nudges actually promote autonomy, in part because some nudges enable people to devote their limited time and attention to their most important concerns. (5) Choice architecture should not, and need not, compromise either dignity or self-government, but it is important to see that imaginable forms could do both. It follows that when they come from government, choice architecture and nudges should not be immune from a burden of justification, which they might not be able to overcome. (6) Some nudges are objectionable because the choice architect has illicit ends. When the ends are legitimate, and when nudges are fully transparent and subject to public scrutiny, a convincing ethical objection is less likely to be available. (7) There is ample room for ethical objections in the case of well-motivated but manipulative interventions, certainly if people have not consented to them; such nudges can undermine autonomy and dignity. It follows that both the concept and the practice of manipulation deserve careful attention. The concept of manipulation has a core and a periphery; some interventions fit within the core, others within the periphery, and others outside of both.
Sunstein (2015). Nudges, Agency, and Abstraction: A Reply to Critics. Review of Philosophy and Psychology, Volume 6, Issue 3, pp 511-529.
This essay has three general themes. The first involves the claim that nudging threatens human agency. My basic response is that human agency is fully retained (because nudges do not compromise freedom of choice) and that agency is always exercised in the context of some kind of choice architecture. The second theme involves the importance of having a sufficiently capacious sense of the category of nudges, and a full appreciation of the differences among them. Some nudges either enlist or combat behavioral biases but others do not, and even among those that do enlist or combat such biases, there are significant differences. The third general theme is the need to bring various concerns (including ethical ones) in close contact with particular examples. A legitimate point about default rules may not apply to warnings or reminders. An ethical objection to the use of social norms may not apply to information disclosure. Here as elsewhere, abstraction can be a trap. We continue to learn about the relevant ethical issues, about likely public reactions to nudging, and about differences across cultures and nations. Future progress will depend on a high level of concreteness, perhaps especially in dealing with the vexing problem of time-inconsistency.
Sunstein (2015). Nudges Do Not Undermine Human Agency. Journal of Consumer Policy, Volume 38, Issue 3, pp 207-210.
Some people believe that nudges undermine human agency, but with appropriate nudges, neither agency nor consumer freedom is at risk. On the contrary, nudges can promote both goals. In some contexts, they are indispensable. There is no opposition between education on the one hand and nudges on the other. Many nudges are educative. Even when they are not, they can complement, and not displace, consumer education.
Sunstein (2014). The Ethics of Nudging. SSRN Working Paper.
This essay defends the following propositions. (1) It is pointless to object to choice architecture or nudging as such. Choice architecture cannot be avoided. Nature itself nudges; so does the weather; so do spontaneous orders and invisible hands. The private sector inevitably nudges, as does the government. It is reasonable to object to particular nudges, but not to nudging in general. (2) In this context, ethical abstractions (for example, about autonomy, dignity, and manipulation) can create serious confusion. To make progress, those abstractions must be brought into contact with concrete practices. Nudging and choice architecture take diverse forms, and the force of an ethical objection depends on the specific form. (3) If welfare is our guide, much nudging is actually required on ethical grounds. (4) If autonomy is our guide, much nudging is also required on ethical grounds. (5) Choice architecture should not, and need not, compromise either dignity or self-government, though imaginable forms could do both. (6) Some nudges are objectionable because the choice architect has illicit ends. When the ends are legitimate, and when nudges are fully transparent and subject to public scrutiny, a convincing ethical objection is less likely to be available. (7) There is, however, room for ethical objections in the case of well-motivated but manipulative interventions, certainly if people have not consented to them; such nudges can undermine autonomy and dignity. It follows that both the concept and the practice of manipulation deserve careful attention. The concept of manipulation has a core and a periphery; some interventions fit within the core, others within the periphery, and others outside of both.
Sunstein (2014). Choosing Not to Choose. Harvard Public Law Working Paper No. 14-07.
Choice can be an extraordinary benefit or an immense burden. In some contexts, people choose not to choose, or would do so if they were asked. For example, many people prefer not to make choices about their health or retirement plans; they want to delegate those choices to a private or public institution that they trust (and may well be willing to pay a considerable amount for such delegations). This point suggests that however well-accepted, the line between active choosing and paternalism is often illusory. When private or public institutions override people's desire not to choose, and insist on active choosing, they may well be behaving paternalistically, through a form of choice-requiring paternalism. Active choosing can be seen as a form of libertarian paternalism, and a frequently attractive one, if people are permitted to opt out of choosing in favor of a default (and in that sense not to choose); it is a form of nonlibertarian paternalism insofar as people are required to choose. For both ordinary people and private or public institutions, the ultimate judgment in favor of active choosing, or in favor of choosing not to choose, depends largely on the costs of decisions and the costs of errors. But the value of learning, and of developing one's own preferences and values, is also important, and may argue on behalf of active choosing, and against the choice not to choose. For law and policy, these points raise intriguing puzzles about the idea of "predictive shopping," which is increasingly feasible with the rise of large data sets containing information about people's previous choices. Some empirical results are presented about people's reactions to predictive shopping; the central message is that most (but not all) people reject predictive shopping in favor of active choosing.
Swindell et al (2010). Beneficent Persuasion: Techniques and Ethical Guidelines to Improve Patients' Decisions. Annals of Family Medicine, vol. 8 no. 3 260-264.
Physicians frequently encounter patients who make decisions that contravene their long-term goals. Behavioral economists have shown that irrationalities and self-thwarting tendencies pervade human decision making, and they have identified a number of specific heuristics (rules of thumb) and biases that help explain why patients sometimes make such counterproductive decisions. In this essay, we use clinical examples to describe the many ways in which these heuristics and biases influence patients' decisions. We argue that physicians should develop their understanding of these potentially counterproductive decisional biases and, in many cases, use this knowledge to rebias their patients in ways that promote patients' health or other values. Using knowledge of decision-making psychology to persuade patients to engage in healthy behaviors or to make treatment decisions that foster their long-term goals is ethically justified by physicians' duties to promote their patients' interests and will often enhance, rather than limit, their patients' autonomy. We describe techniques that physicians may use to frame health decisions to patients in ways that are more likely to motivate patients to make choices that are less biased and more conducive to their long-term goals. Marketers have been using these methods for decades to get patients to engage in unhealthy behaviors; employers and policy makers are beginning to consider the use of similar approaches to influence healthy choices. It is time for clinicians also to make use of behavioral psychology in their interactions with patients.
Tannenbaum, Fox & Rogers. On the misplaced politics of behavioral policy interventions. Working Paper.
One common criticism of policy tools derived from behavioral science that can be applied to a range of policy objectives (commonly referred to as nudges) is that such interventions are manipulative and coercive. We show that such criticism sometimes reflects a partisan nudge bias, whereby partisans conflate their attitudes toward policy tools with their attitudes toward policy objectives. Across five experiments we find that partisans evaluate policy nudges as relatively unethical when applied to policy objectives they oppose or by policymakers they distrust, but evaluate the same policy tools more favorably when applied to political objectives they support or by policymakers they trust. Both politically liberal and conservative partisans exhibited partisan nudge bias, as did practicing policymakers. However, these partisan differences disappear when behavioral policy interventions are described without a specific policy application or sponsor. Thus, explicitly setting aside particular policy objectives and endorsements may facilitate less prejudiced discussion about the appropriateness of deploying behavioral policy tools.
Vallgarda (2012). Nudge—A new and better way to improve health? Health Policy Volume 104, Issue 2, Pages 200–203.
Nudging, or libertarian paternalism, is presented as a new and ethically justified way of improving people's health. It has proved influential and is currently taken up by the governments in the US, the UK and France. One may question the claim that the approach is new, in any case it has many similarities with the idea of "making healthy choices easier". Whether the approach is better from an ethical perspective depends on the ethical principles one holds. From a paternalistic perspective there could be no objections, but from a libertarian, there are several. Contrary to what the authors state, libertarian paternalism is an oxymoron.
Wertheimer (2012). Should Nudge be salvaged? J Med Ethics doi:10.1136/medethics-2012-101061
Whitman & Rizzo (2015). The Problematic Welfare Standards of Behavioral Paternalism. Review of Philosophy and Psychology, Volume 6, Issue 3, pp 409-425.
Behavioral paternalism raises deep concerns that do not arise in traditional welfare economics. These concerns stem from behavioral paternalism's acceptance of the defining axioms of neoclassical rationality for normative purposes, despite having rejected them as positive descriptions of reality. We argue (1) that behavioral paternalists have indeed accepted neoclassical rationality axioms as a welfare standard; (2) that economists historically adopted these axioms not for their normative plausibility, but for their usefulness in formal and theoretical modeling; (3) that broadly rational individuals might fail to satisfy the axioms for various reasons, making them unpersuasive as normative criteria; and (4) that even if their violation did constitute irrationality, that would not justify paternalists' choosing among inconsistent preferences to define an individual's "true" preferences.
Whyte et al (2012). Nudge, Nudge or Shove, Shove—The Right Way for Nudges to Increase the Supply of Donated Cadaver Organs. The American Journal of Bioethics, Volume 12, Issue 2.
Richard Thaler and Cass Sunstein (2008) contend that mandated choice is the most practical nudge for increasing organ donation. We argue that they are wrong, and their mistake results from failing to appreciate how perceptions of meaning can influence people's responses to nudges. We favor a policy of default to donation that is subject to immediate family veto power, includes options for people to opt out (and be educated on how to do so), and emphasizes the role of organ procurement organizations and in-house transplant donation coordinators creating better environments for increasing the supply of organs and tissues obtained from cadavers. This policy will provide better opportunities for offering nudges in contexts where in-house coordinators work with families. We conclude by arguing that nudges can be introduced ethically and effectively into these contexts only if nudge designers collaborate with in-house coordinators and stakeholders.
Wikler & Eyal (2013). Nudges and Noodges: The Ethics of Health Promotion—New York Style. Public Health Ethics (2013) 6 (3): 233-234.
Michael Bloomberg's three terms in New York City's mayoral office are coming to a close. His model of governance for public health influenced cities and governments around the world. What should we make of that model? This essay introduces a symposium in which ethicists Sarah Conly, Roger Brownsword and Alex Rajczi discuss that legacy.
Wilkinson (2013). Nudging and Manipulation. Political Studies, Volume 61, Issue 2, pages 341–355.
Behavioural economics and social psychology have shown that humans have all sorts of psychological quirks. Policy makers have become enthusiastic about taking advantage of these quirks through what Thaler and Sunstein call 'nudges'. This article asks: when would nudging be manipulative? The article has six parts: (1) publicity and transparency, which claims that Thaler and Sunstein's own attempt to deal with evil nudges is inadequate; (2) manipulation and autonomy, where the nature and wrongness of manipulation is connected to a conception of autonomy; (3) the perversion of the decision-making process – a piecemeal approach, which sorts nudges into easy and hard cases and assesses attempts to pick out certain methods, such as temptation, as manipulative; (4) the perversion of the decision-making process – general accounts, which shows why we do not have a clear, complete and correct account of what such perversion is; (5) intentions and nudging's escape clause, where it is shown that governments that nudge as Thaler and Sunstein would wish do not manipulate because they do not have the intention to manipulate; and (6) consensual manipulation, where it is claimed that manipulation can, with the right consent, be consistent with autonomy.
White (2013). The Manipulation of Choice: Ethics and Libertarian Paternalism. Palgrave Macmillan.
Dr. Mark D. White explains the informational, ethical, and practical problems faced by libertarian paternalism and 'nudges,' by which the government subtly influences people's choices for their own good, in his exciting new volume The Manipulation of Choice. In a lighthearted manner, the author points out critical flaws in the way economists model decision-making, how behavioral economics failed to correct them, and how they led to the problems with libertarian paternalism and nudges. Sprinkled throughout with anecdotes, examples, and references to a wide range of scholarly literature, this new volume argues against the use of paternalistic nudges by the government and makes a positive case for individual choice and autonomy.
Wright & Ginsberg (2012). Behavioral Law and Economics: Its Origins, Fatal Flaws, and Implications for Liberty. Northwestern University Law Review, Vol. 106, No. 3.
Behavioral economics combines economics and psychology to produce a body of evidence that individual choice behavior departs from that predicted by neoclassical economics in a number of decision-making situations. Emerging close on the heels of behavioral economics over the past thirty years has been the "behavioral law and economics" movement and its philosophical foundation — so-called "libertarian paternalism." Even the least paternalistic version of behavioral law and economics makes two central claims about government regulation of seemingly irrational behavior: (1) the behavioral regulatory approach, by manipulating the way in which choices are framed for consumers, will increase welfare as measured by each individual's own preferences and (2) a central planner can and will implement the behavioral law and economics policy program in a manner that respects liberty and does not limit the choices available to individuals. This Article draws attention to the second and less scrutinized of the behaviorists' claims, viz., that behavioral law and economics poses no significant threat to liberty and individual autonomy. The behaviorists' libertarian claims fail on their own terms. So long as behavioral law and economics continues to ignore the value to economic welfare and individual liberty of leaving individuals the freedom to choose and hence to err in making important decisions, "libertarian paternalism" will not only fail to fulfill its promise of increasing welfare while doing no harm to liberty, it will pose a significant risk of reducing both.
Yeung (2012). Nudge as Fudge. The Modern Law Review, Volume 75, Issue 1, pages 122–148.
Yeung (2016). The Forms and Limits of Choice Architecture as a Tool of Government. Law & Policy
Although the use of design-based control techniques, broadly understood as the purposeful shaping of the environment and the things and beings within it toward particular ends, have been used throughout human history, until the publication of Thaler and Sunstein's Nudge, they have remained relatively neglected as a focus of regulatory scholarship. Nudge can be understood as a design-based regulatory technique because it provides the means by which a choice architect intentionally seeks to influence another's behavior through the conscious design of the choice environment. But there are other forms of choice architecture besides nudge. The gunman who offers his victim "your money or your life?" is as much a choice architect as the cafeteria manager who places the fruit at eye level while placing the chocolate cake further back to encourage patrons to make healthier dietary choices and the supermarket owner who slashes grocery prices on their use by date to stimulate sales. This article focuses on three forms of choice architecture—coercion, inducements, and nudge—employed by the state in order to influence the behavior of others. It seeks to evaluate whether each form of choice architecture coheres with the fundamental values and premises upon which liberal democratic states rest and can therefore be properly characterized as libertarian. Chief among these values is the importance of individual liberty and freedom and the concomitant special status accorded to individual choice in liberal democratic communities. In so doing, it highlights different ways in which these techniques may be regarded as an interference with individual freedom, and the conditions under which such interferences might be rendered acceptable or otherwise justified.
Some articles and websites:
Nudging can also be used for dark purposes, Tim Harford in the FT
Waldron (2014). It's All for Your Own Good. The New York Review of Books. October 9th Issue.
The Behavioral Scientist's Ethics Checklist By Jon Jachimowicz, Sandra Matz, and Vyacheslav Polonski in the Behavioral Scientist
The Power of Nudges for Good or Bad - Richard Thaler in the NYT
How Uber Uses Psychological Tricks to Push Its Drivers Buttons - Noam Scheiber in the NYT
Invisible Manipulators of Your Mind - Tasmin Shaw in the New York Review of Books
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The purpose of this blog is to provide a forum for discussing research in microeconomics, behavioural economics and cognate areas. The blog is moderated by Liam Delaney
Introduction to Behavioural Economics
Background Readings and MSc Overview
Rationality, Utility and Value
Judgement, Heuristics and Biases
Intertemporal Choice
Identity, Motivation and Incentives
Emotion and Decisions
Personality and Economics
Well-Being and Economics
Measuring Preferences and Subjective Quantitites
Behavioural Policy Readings
Behavioural Economics, Law and Regulation
Ethics and Integrity in Research
Stata resources
Resources for margins & marginsplot
Regression Models for Categorical Dependent Variables using Stata by Long & Freese (3rd ed)
Examples of the 4 main capabilities of margins
Life-satisfaction in 15 European countries
Nudge Database: List of empirical 'nudges' & their sources
A case for nationalizing pensions
Bleeding Heart Libertarians
Voting as Conspicuous Caring
Germany sticks with opt-in donation for deceased donor organs for transplants
What Does it Take to Open a Private School in Delhi?
NYT > The Upshot
American Causal Inference May 2020 Austin Texas
BPS Research Digest
Most People Who Share "Fake News" Do Care About The Accuracy Of News Items — They're Just Distracted
The Opioid Tragedy, Part 1: "We've Addicted an Entire Generation" (Ep. 402)
PISA 2018 suggests gender gaps in reading are closing. But I am not celebrating
Criticism and praise in the run up to the 2020 General Election
Decision Science News
Annual Interdisciplinary Symposium on Decision Neuroscience (ISDN), Philadelphia, June 5-6, 2020
ideas42
CityNudge Accelerator Update: What We've Learned, Where We're Going
Ask Ariely: On Team Tragedy, Airport Anxiety, and Grumpy Gift-wrapping
Peter Ubel
A Shameful American Fact: Enormous Racial Disparities In Death Rates From Lupus
Turbulence Ahead
Hypnotic States of Hibernia
The Behavioural Insights Team
How to build stronger friendships in 2019
Cultural Cognition Blog
Weekend update: Tedx restored to youtube
Confessions of a Supply-Side Liberal
Vincent Del Giudice and Wei Lu: America's Best and Brightest Are Headed to Boulder
The Growth Economics Blog
The Simplest Growth Model
Follow @econpsypol
StirBSC YouTube channel
Behavioural Science and Public Policy
List of 19 Natural Experiments
Resources on Noncognitive Skills
The 15 Best Behavioural Science Graphs 2010-13
List of Behavioural Economics Masters Programs
Most cited papers in Behavioural Economics
Behavioural Economics & Public Policy
Internal & External Funding Possibilities
Cornell's list of social science datasets
UCLA's list of psychological datasets
List of Behavioural Blogs
Alex Wood's Guide to a Psychology PhD
Resources for microeconometrics
Advanced Econometric Research Design
List of jobs in BE
BBC In Our Time
Centre for Economic Performance
City Journal Podcasts
Financial Markets with Robert Shiller
Kahneman Lectures
Kenneth Train: Discrete Choice Methods With Simulation
MIT World
Mark Thoma's Introductory Econometrics Course
NBER Field Experiments
NBER Micro-Econometrics Mini-Course
NobelPrize.org Economics Interviews
Philosophy Talk
RSA Vision
Talks@Google
The Economist Videos
The Research Channel
VOX Audio