There's a conference of legal experts in Ottawa (at which I'm speaking) in early September which may fly under the media radar. But it will deal with an interesting and very useful concept: the "nudge." The nudge is the brainchild of two American academics, economics professor Thaler and legal professor Sunstein. They've rolled out their ideas in nudge: Improving Decisions About Health, Wealth, and Happiness (2008). Subsequently Sunstein has elaborated these views in Simpler: The Future of Government (2013) and Why Nudge? (2014).
Thaler's and Sunstein's goal is to help people make better choices in a variety of areas without removing their right to choose. A central claim of theirs is that individuals select more wisely when provided with a clear set of options, which respond to various aspects of human judgment that is not always cool and rational. Instead we can act on impulse and be influenced by such elements as "status quo bias," which prompts individuals to go along with the default option when provided with various choices and the "planning fallacy" the tendency to be unrealistically optimistic about the time it takes to complete a project.
Thaler and Sunstein emphasize the larger contexts in which individuals make decisions; "choice architects" organize such broader circumstances. Pivotal to these ideas is the "nudge": elements of choice architecture that shapes individuals' behaviour in a predictable way without foreclosing options or substantially modifying economic incentives.
Nudge has lots to say about consumption and how to address issues of impaired control. It has suggestions for the suppression of smoking, intemperate drinking, and problem gambling. Consider one example: cigarettes and bank deposits. In one program an individual trying to stop smoking opens a bank account. For six months she deposits the amount of money she would otherwise spend on cigarettes into the account. After six months she takes a test that determines whether she has been smoking. If she hasn't she gets to keep the money in the account; if she has the account is closed and the money is donated to charity. There is evidence that participating is this bank program increases chance of quitting by over 50 percent giving this initiative a much higher success rate than many other cessation efforts.
Think about another example: Arrangements that permit those who are gambling to excess to agree to be excluded from casinos. Such arrangements authorize casinos to enforce the ban against these individuals should they attempt to re enter the premises.
There's lots of potential here for developing policies that promote health but that also respect freedom of choice and are mindful of the many costs that regulation can impose. But there are also tough issues. When are these nudges effective and under what circumstances? Experts on gambling suggest that self-exclusion agreements, cited above, are not nearly as effective as advocates might suggest. Among other weaknesses they do nothing to curb the use of video lottery terminals, which in several provinces can be found in many locations besides casinos, and which are closely associated with the development of problem gambling in many individuals.
And what are the links between nudges and other legal interventions? Of course, it is better (and cheaper) to have individuals and corporations be persuaded to protect the environment, respect human rights, and stop eating (and producing) so much junk food. The fact remains that environmental degradation, violation of human rights, and consumption and peddling of unhealthy food still occurs. What other regulatory initiatives, in conjunction with nudges, are philosophically justified and effective in addressing these nasty facts of life?
Governments elsewhere are taken with the nudge. The US, Britain, and Sweden, to name but three, all have official units focused on the role of nudges in developing a range of policies. The conference in Ottawa will examine their potential in this society. A promising initiative. Let`s see what happens.
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