Nudges That Should Fail?

Abstract

Professor Sunstein (2017) discusses possible causes for and policy implications of the failure of nudges, with a special attention to defaults. Though he focuses on nudges that fail when they should succeed, Sunstein recognizes that some failures reveal that a nudge should not have been attempted to begin with. Nudges that fail, however, does not consider fully the relationship between the outcomes of nudging and their likely welfare effects, most notably neglecting the troubling case of nudges that succeed when they should fail. Hence, after clarifying the boundaries of legitimate nudging and noting the fourfold relationship between the efficacy of nudging and its normative desirability, this article evaluates more fully the case of failed nudges and examines the hitherto unaddressed problem of successful yet undesirable nudges. This analysis shows that the failure of nudging bears only limited diagnostic value while the success of a nudge is even less indicative of its normative status. The article concludes with recommendations for policy makers who wish to employ nudges that are not only efficacious but also likely to advance the subjective well-being of the individuals they target.

Keywords: behavioral law and economics, behavioral public policy, rationality, welfare, judgment, decision making