Rethinking Nudge: Not One But Three Concepts
Behavioural Public Policy, Forthcoming
19 Pages Posted: 16 Jan 2017 Last revised: 14 Nov 2017
Date Written: January 1, 2017
Nudge is a concept of policy intervention that originates in Thaler and Sunstein's (2008) popular eponymous book. Following their own hints, we distinguish three properties of nudge interventions: they redirect individual choices by only slightly altering choice conditions (here nudge 1), they use rationality failures instrumentally (here nudge 2), and they alleviate the unfavourable effects of these failures (here nudge 3). We explore each property in semantic detail and show that no entailment relation holds between them. This calls into question the theoretical unity of nudge, as intended by Thaler and Sunstein and most followers. We eventually recommend pursuing each property separately, both in policy research and at the foundational level. We particularly emphasize the need of reconsidering the respective roles of decision theory and behavioural economics to delineate nudge 2 correctly. The paper differs from most of the literature in focusing on the definitional rather than the normative problems of nudge.
Keywords: nudge, liberal paternalism, policy analysis, behavioural economics, decision theory, rationality, decision biases, Thaler and Sunstein, Kahneman and Tversky
JEL Classification: D03, D18, D70, K32, K39, M38
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