Which Way to Nudge? Uncovering Preferences in the Behavioral Age
43 Pages Posted: 28 Feb 2015 Last revised: 11 Sep 2015
Date Written: August 25, 2015
Behavioral Law and Economics has created a dilemma for policymakers. On the one hand, research from the field suggests a wide range of unconventional policy instruments (“nudges”) may be used to shape people’s voluntary choices in order to lead them to the option they most prefer. On the other hand, the very nature of these new instruments precludes researchers from measuring people’s preferences in the traditional way, i.e., by looking to see which option people choose from the set of available choices. As a result, policymakers often lack the information they need to design nudges that will make people better off.
To tackle this dilemma, I propose a new framework that focuses on the distinction between those decision-makers who respond to nudges and those who do not. The framework highlights that existing methods for designing nudges come up short—none accounts for what I argue is the crucial piece of information: the preferences of the nudge-sensitive decision-makers. After exploring this dilemma, the Essay describes two new approaches for uncovering the preferences of this group and argues that they hold promise for informing the design of nudges in a wide range of policy settings.
Keywords: Behavioral Law and Economics, Nudges
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