Behavioral economics is the field that melds economics with psychology, and its basic mission is to persuade people to transfer the contents of their wallets into corporate bank accounts. The science also combines marketing with public policy, with mixed results.
The name of the game is shaping people’s behavior while providing them with the illusion that they exercise freedom of choice. The core purpose of choice architecture is to present options in a way that is advantageous to the presenter. It rests on the belief that people’s biases lead them to make bad choices. The other basic tenet is that government experts should be in charge of leading the people to better lives. (In the minds of critics, this presumption cuts off the possibility of debate over what a good life consists of.)
It comes as no surprise that actions which might be borderline unethical are nevertheless politically expedient. So how does this play out in the realm of choice architecture and nudging? There is a reason why in comic book lore, superheroes are warned to use their powers for good. Can the gentler, more altruistic branches of science gain useful knowledge from behavioral economists?
In some countries, making organ donation the default option has led to spectacular success with that program. When it comes to corporate retirement plans where people are enrolled unless they opt out, the concept has gained a lot of traction. Some people now save, who would not have otherwise done it — but some have lost money because other financial strategies would have been more advantageous for them.
Harvard behavioral economist Todd Rogers is a fan of the nudge, but warns that behavioral change is rarely extreme or lasting. Political scientist Frank Mols warns that when it comes to large issues like crime or climate change, nudging can change neither attitudes nor behavior. Social engineering has hidden costs.
Like medicine, nudges have side effects. Reporter Bruce Bower quotes Danish behavioral economist Mette Trier Damgaard:
I don’t want to get rid of nudges, but we’ve been a bit too optimistic in applying them to public policy.
The masters of the field have established that decisions are affected by framing, no matter how seemingly objective they may be, and at the end of the day, no decision setting is neutral. The technicians who do the framing have one job: to influence the consumer’s decision by creating bias toward one choice and away from another. But a poorly designed nudge can stir up guilt or shame, with a result the opposite of what was intended.
The dark arts of choice architecture are counterbalanced by the innate human tendency to resist being nudged. Often, people read nudging as coercion, of which it is supposed to be the exact opposite. They interpret it as trickery, and worse, as disrespect. This is because they sense the underlying message which is, as phrased by Deirdre Nansen McCloskey, “you are too stupid to be treated as a free adult.”
So whether the resistance is conscious or instinctive, it is a lot to surmount, and overcoming it is taken very seriously by politicians. If they mess up, the people are all over social media and out in the streets carrying signs that say, “Down with the Nanny State!”
Childhood Obesity News has attentively followed the United Kingdom’s lengthy struggle to pass a tax on sugar-sweetened beverages. There are plenty of choices on the supermarket shelves. Nobody makes anyone buy drinks with sugar, or without sugar. But if the price of the heavily sweetened drink is 10 cents more on every bottle, then what? It is of course a gigantic nudge, designed to recoup some of the money that the public spends on fizzy drinks, and channel it into health services dealing with the consequences of obesity.
In the U.K. a whole government department is devoted to messing with people’s heads, hopefully in a benign way. The Behavioural Insights Team is credited with being a pioneer. For one thing, it invented the “EAST” — shorthand for the rule that in order to cause behavior change the subjects must be presented with choices that are Easy, Attractive, Social and Timely.
The team also has branches in North America, Australia and Singapore. In the U.S., the White House has a Social and Behavioral Sciences Team.
Your responses and feedback are welcome!
Source: “Guiding Forces,” NYTimes.com, 08/22/08
Source: “Nudging people to make good choices can backfire,” ScienceNews.org, 03/08/17
Source: “The Applied Theory of Bossing People Around,” Reason.com, March 2018
Source: “Policymakers around the world are embracing behavioural science,” Economist.com, 05/18/17
Photo credit: Elena Micheals on Visualhunt/CC BY-ND