Nudge Policies

• What is a Nudge

  A subtle prompt designed to change our behaviour whilst preserving the illusion of liberty
• Nudge


  • Not a big financial incentive or punishment
  • Informed by behavioral science
• Choice architectureExamples


  • 2 meter markers outside supermarkets, pharmacies, schools, restaurants
  • Using chicken manure as fertilizer in Sweden to discourage crowding in central parks
• EAST framework for nudging


  • Easy
  • Attractive
  • Social
  • Timely
• Nudges using EAST framework

  • Increasing contactless payment limit
  • Easy COVID-19 testing design
  • Social testing with neighbors
  • Automatic hand sanitizer stations
• Nudging can be used to encourage more socially beneficial choices
• Behavioral economics


  Teachings that can be useful in overcoming market failures in society
• Behavioral economics policies


  • Focus on the choice architecture idea
  • Give a "nudge" to influence decision-making, but still allow freedom of choice
• Choice architecture

  The idea that individual decision-making can be biased or influenced based on the location, placement, or presentation of information
• Behavioral economics policies

  1. Influence decision-making

  2. Get people to do what the government wants

  3. Improve social welfare
• Nudge policies

  Behavioral economics policies that give a "nudge" to influence decision-making, but still allow freedom of choice
• Shove policies

  Traditional policies like taxes, subsidies, and regulations where people have no choice
• Choice architecture related policies

  • Framing
  • Default choice
  • Restricted choice
  • Mandated choice
• Framing


  The way in which information is presented to influence decision-making
• Framing policies

  • Improving labeling of low-fat, low-sugar, low-cholesterol products
  • Providing information on how recycled materials can be used
  • Displaying calorie content on menus
  • Presenting price information in a way that encourages use of gyms/leisure centers
• Default choice

  People are automatically enrolled in something unless they opt out
• Default choice policies

  • Organ donation
  • Pension enrollment
• Restricted choice


  Limiting the number of choices available to consumers
• Restricted choice policies


  • Public smoking bans
  • Limiting locations of takeaways near schools
  • Restricting food/drink options in schools
• Mandated choice


  People have to make a choice, either to do something or not
• Mandated choice policies


  • Organ donation (in some areas)
  • Recycling bin usage
• When evaluating behavioral economics policies


  Consider costs vs. benefits, likelihood of success, and whether they are too paternalistic or based on flawed assumptions about human behavior
• Alternatives to behavioral economics policies

  Information provision, traditional "shove" policies like taxes and regulations
• Behavioral economics policies may be useful alongside more targeted, direct approaches like taxes and regulations to address deep-rooted market failures