Which article below do you like most? why?

Learning Goal: I’m working on a economics discussion question and need an explanation and answer to help me learn.

Dear All,

In 2017, the Nobel Prize in economics went to Richard Thaler who was once not considered an economist because of his heterodox approach. He then managed to open up a new field called behavioral economics. Over the years, many other scholars participated in his call of questioning key assumptions of conventional economics. I would like you to read the following two articles and reflect on the following questions:

• Which article below do you like most? why?
• (Why) do you think we need nudging?
• Generally speaking, Are you in favor of or against the use of nudging? why?
• Give one example from your personal life of how nudging helps you to do better in your life.
• Give one example of good nudging to bring a positive behavioral change in your workplace/society.

Article 1:

Get people to do what you want with a ‘nudge.’ Here’s how

CNN —

There has been a Bueller-like refrain to my life raising kids, and it wasn’t one I wanted to listen to. It went something like this: “Did you turn in your homework? Did you eat your lunch? Did you clean your room? Did you…?”

Of course, it wasn’t just the kids. My husband often heard these little ditties: “Did you pick up the dry cleaning? Did you stop at the store? Did you call the doctor? Did you…?”

I even sang a similar tune to myself, but with a twist: “Why didn’t you work out today? Why did you eat that ice cream? Why didn’t you go to sleep at a decent hour? Why did you…?”

What I would have given to know about nudge theory during those days! (My kids are all grown.)

Nudge theory, developed by Richard Thaler, a professor of economics and behavioral science at the University of Chicago, says that you can positively change other people’s behavior (or your own) by using motivational techniques most people respond to – such as the need to fit in with social norms. (Thaler won the 2017 Nobel Prize in Economic Sciences for his “contributions to behavioural economics.”)

What makes “nudges” different from laws, rules and overt manipulation is that people always have a choice – they can decide to do or not do the suggested behavior.

All this may sound abstract, but there are distinct ways we can harness the power of the nudge to encourage those we love to adopt healthier behaviors. We can even use it on ourselves.

To find out how, I had a chat with Katy Milkman, a behavioral scientist at the Wharton School of the University of Pennsylvania, who is a guest on CNN Chief Medical Correspondent Dr. Sanjay Gupta’s Chasing Life podcast this week. She has written a new book called “How to Change: The Science of Getting from Where You Are to Where You Want to Be.”

CNN: From your perspective as a scientist who studies how we can change behavior, what is a nudge?

Katy Milkman: My definition of a nudge is any tool used to influence someone’s behavior that doesn’t rely on a standard economic lever – that doesn’t use incentives or information to influence people. If I fine you for not doing it, if I restrict you, if I say it’s illegal to do it, or if I give you a free concert ticket if you do it, those are not nudges. Those are are good old-fashioned, traditional tools of economics.

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All sorts of persuasion tools are nudges. If I change the layout of a cafeteria to put healthy food up front, that’s a nudge. When I say to you, “Oh I’ve reserved a vaccine for you,” and then you want it and go get one, that’s a nudge. I haven’t changed the economic calculus of this decision in any way, but you feel like that dose belongs to you, and you certainly don’t want someone else to get your vaccine, so you act. When you emphasize actions the majority of people are taking, that’s a nudge. People are eager to follow social norms. They don’t want to be left out.

Once you recognize how these “nudges” work, they can become helpful tools for changing people’s behavior for the better – whether it’s your spouse or your neighbors or your employees or your customers.

CNN: What are some of the most effective nudges?

Milkman: There is one clear top tool, and that’s the default. It’s our behavioral science blockbuster. It almost always changes behavior, at times immensely. Employers often use default settings as a nudge: “We enrolled you in our 401k program, but you can opt out if you don’t want it by visiting this website and taking these actions.” Or they might say “We haven’t enrolled you in our 401k program, but here’s the website and you can go enroll if you want to.”

Default settings are a fairly blunt instrument, or nudge, that turns out to have a huge impact. In the case of auto-enrollment for retirement savings, a classic study shows that auto-enrolling people in a 401k plan but letting them opt out can produce nearly a 40% boost in enrollment rates.

But for the most part, which nudge to use depends on the behavior you’re hoping to change: Why isn’t this person interested in getting a flu shot? Why isn’t this person interested in recycling? Why doesn’t this person want to sign up for the gym? Why won’t your spouse cook dinner?

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Nudging each of these behaviors in a positive direction works best when you match your problem and solution. For example, if someone is just forgetting to recycle, then good old-fashioned reminders work well.

People generally underestimate how forgetful they are. They say, “Of course I’m not going to forget that – it’s important to me!” And then oops, life is busy, and they do. So as mundane as they are, reminders are highly effective in many situations, such as nudging medication adherence, boosting savings and even for encouraging vaccinations.

But not everything is about forgetting. Many failures to get to the gym aren’t because people forgot – lots of people just don’t like going to the gym!

CNN: What’s the best way to use a reminder for myself or my family?

Milkman: Timely reminders are much better. There’s an older study I adore that used valets to remind people to buckle up before they drove off. If people were reminded as they hand off their ticket to the valet, they buckled up about half of the time – roughly as often as they buckled up without a reminder. But when they were reminded just as the valet opened the car door for them, they buckled up 80% of the time.

So, telling your partner in the morning to stop by the store in the afternoon will not be very effective, but sending them a text just as they get into their car after work will be.

Reminders that include planning prompts are even better. Research shows getting people to make concrete “when, where, and how you’ll get there” statements substantially increase follow-through on everything from getting a cancer screening to turning out to vote.

You can do that with your spouse or your child when you want to nudge a behavior, too. If your child keeps forgetting to return a library book, prompt them to tell you the date and time when they plan to return it, how they will get to the library, and, if you live in a city with many library branches like I do, ask them which location they’ll visit.

CNN: What’s a great nudge to help my family adopt healthier habits?

Milkman: Inviting people to make a choice that will take effect later is a powerful nudge. It turns out that when we’re deciding about this moment, we tend to make less healthy choices. We want that instant hit of gratification that isn’t so good for us in the long run.

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For instance, my husband just texted me while we were talking and asked me what I want for takeout for dinner tonight. I’ll probably say pizza, but I would make a very different choice if he asked me to choose what I wanted for dinner tomorrow. Or where do I want to go on vacation in six months or how do I want to spend money that just arrived in my paycheck versus money that will arrive next year when I get a raise.

We think much differently when we make choices for now versus later. We want the pizza now and the salad later. We want to sit on the couch and binge-watch lowbrow TV now, but the gym and a night at the opera sounds good next week. All the sorts of things that have long-term value and benefits, we want to do those, but later.

You can change that if you nudge people, even yourself, to make decisions in advance. If you invite people at work to order lunch for next week, they are more likely to make better choices. If you and your partner plan all the meals for next week, you’re nudging yourself toward healthier decisions.

Of course, you might veer off the plan and just order pizza, but there is some degree of cost that you incur when you throw that food away. There is also guilt about not keeping your commitment. So, you’re much more likely to eat that healthy food than you would have been if you hadn’t invested in meal planning up-front.

Making those kinds of advanced decisions is one way that we can nudge ourselves and others toward choices that are more aligned with our long-term goals.

CNN: Can nudge theory help me convince a skeptical loved one to consider my point of view on politics or vaccines?

Milkman: One of my favorite tools to change and influence other people’s behavior is to ask someone to advise, or coach, a third party with a different point of view than their own. A new research paper on this just came out showing that if you’re randomly assigned a debate position, it changes your opinion – you start to align more with whatever randomly assigned position you had to take. It’s called the advocacy effect: After you advocate for something you believe in it more, even if you were opposed to it in the past.

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Think about this in a work context. You have an employee who’s not super enthusiastic about a business decision that you believe is the right way to go. If you ask them to do the research and make a presentation advocating in favor of that position, they are likely to become more open to it.

If you have an employee who’s not getting their work done in timely fashion, ask that person to mentor someone else who is struggling with the same challenge. Mentoring will improve that individual’s own performance because of the advocacy effect and because being given that responsibility builds their confidence.

If you’re trying to get someone to open up their minds in this age of polarization, give them an opportunity to articulate the opinion opposite their own. If you can get people to take the opposite position, it can make them more open minded.

CNN: Can nudge theory be misused?

Milkman: Absolutely. Anytime you’re attempting to influence people, whether it’s with economics or psychology, there is a risk of nefarious or bad behavior. If something has an impact on you and you don’t know why, you can think of that as nefarious – I’m influencing you without your knowledge of what I’m doing and why it’s working.

For example, I do not want someone to sell me cigarettes. I don’t want them to want to sell my family cigarettes. But what if they tell me, “I have cigarettes reserved for you, for everyone in your family. Everyone in your neighborhood is smoking cigarettes right now.” That’s what I would say is “nudging for evil.” That’s a challenge with all influence tactics, and something I think we must be wary of as we use these tools for the public good.

However, one asset of nudges over other tools of influence like incentives, mandates and bans is that they preserve the freedom to choose: You have the choice to do what’s encouraged – or not – without incurring any sort of official cost. What I study most is encouraging healthy behaviors, or how to help people build up savings or help kids get better educational outcomes. When used in that way, I’d argue nudges are cost-effective tools that we can layer on top of traditional policy tools to improve people’s lives.

I think the benefits of nudging are clear. These are methods that expand our toolkit for changing other people’s behavior, hopefully for the better. The more tools at your disposal the better if you’re a government and you want to improve outcomes for citizens, or if you’re a coach and you want to improve outcomes for your team, or you are parents and want to improve outcomes for your child.

source: https://edition.cnn.com/2021/10/12/health/nudge-healthy-behavior-wellness/index.html

Article 2:

Nudges and sludge – ways to influence behaviour in business

NEWSDAY

THURSDAY 3 FEBRUARY 2022Source: scholarlykitchen.sspnet.org –

Purposeful business uses behavioural techniques such as nudges to move people to make choices themselves which are to their benefit.

Purposeful businesses also work to remove sludge – any aspect shaping people’s choices that makes it harder for them to end up better off (in their own conception of better).

Nudge emerges out of one of the social science disciplines, behavioural economics, within which there has been a lot of progress. Richard Thaler and Cass Sunstein, influential behavioural economists, wrote the book, Nudge – improving decisions about health, wealth, and happiness in 2008. That book became hugely influential and “nudge units” were set up by governments around the world to support public policy – the first one in the UK.

In 2017, Richard Thaler received a Nobel prize in economics for his contribution to behavioural economics – particularly the inclusion of three psychological factors: the tendency not to behave completely rationally, notions of fairness and reasonableness, and lack of self-control.

In August 2021, Thaler and Sunstein published the second, and “final” edition. They revised their successful book because of the change and experience accumulated since then – to illustrate that extent of change. In the intervening period, think how different iPhone 1 is from iPhone 13.

The covid19 pandemic has shown how difficult it is to agree on collective societal action: to take the vaccine, even when people are facing mortal risks in the short term, the science is clear, and the vaccine is free for individuals to take.

When it comes to climate change, the challenge is even larger and Thaler & Sunstein refer to the nature of the challenge as a perfect storm. The climate change challenge requires humans to act against many known decision making biases and on top of that poses the challenge of overcoming temptation to free-ride (not contributing but benefiting from the value generated by actions and efforts of others).

Natural science will remain critical for understanding what is happening around and within us and to create new and effective solutions. Social science will also remain critical – because the realities we experience are socially constructed and we need to find ways of effectively transforming them.

The ongoing pandemic has exacerbated inequalities and tensions in societies across the world – including the Caribbean. The rich have gotten richer, the poor poorer, and social tensions and anger are rising.

Examples from very different parts of the world illustrate how deep underlying tensions can lead to massive breaks in society based on relatively small triggers linked to reforms such as energy related subsidy systems. In Chile, the trigger was an increase in public transportation costs; in Kazakhstan an increase in fuel price; in France the yellow vest protests were triggered by rising crude oil and fuel prices.

The recently released annual survey of global risk perceptions by the World Economic Forum’s (WEF) has shown that all around the world people are worried: climate and sustainability related risks have settled to take the top three spots, though for the next two or five years, livelihood crises and erosion of social cohesion, societal inequity risks are seen to be even more serious.

Given the collective view on what the risks are, there is consensus that business-as-usual cannot be sustained even in the short and medium terms. What is required is systemic transformation that allows us to adapt to the climate and other biosphere related crises that are already with us and that will only intensify for the foreseeable future. Even while we are seeking to actively stop doing harm, for example by achieving net-zero greenhouse gases, we need to also try to restore nature, one cannot be achieved without the other.

Fragile economies have been and continue to be rattled by the pandemic. Those that are seeing any kind of economic activity coming back are glad for the financial lifelines that these bring.

Economic interests are entrenched in the traditional sectors and ways of doing business. Social contracts are already hanging on a thread. Most people can imagine a better future, but not seeing credible signs that we are transforming in a way that enables us to adapt to the unavoidable climatic changes and transform to restore and thrive.

To succeed we need to strengthen our social contracts and build up enough political capital that allows us to transform our ways of doing business in fundamental ways. We need to live and work within our planetary boundaries. The world has already agreed on specific sustainable development goals to be achieved by 2030. We are within the decade of action, and are facing the last hope of staying within a 1.5 Celsius temperature rise – but only if we scale up our efforts and effectiveness by multiple orders of magnitude during the next five years.

Ernst Fehr and Simon Gächter, also behavioural economists, have shown that people are “conditionally cooperative.” We can construct cooperative agreements with a chance of success if we enable agreement partners to punish non-co-operators at their own expense. In addition to that, policies need to ensure that economic incentives created through tax regimes for undesirable consequences – eg carbon emission – are aligned with the results we are seeking.

Legislation and regulation that requires organisations to disclose their greenhouse gas emissions and align with science-based targets as currently implemented in several parts of the world have been shown to be powerful and effective.

Behavioural economics shows that it is possible to design the choice architecture in such a way that we are more likely to make decisions that are in our own best interest. Behavioural economics should therefore be in the competence and toolbox of organisations, public policymakers and legislators.