Thaler Nudges the Brits (and the Swedes?)

by on September 30, 2010 at 2:16 pm in Current Affairs, Economics | Permalink

Guardian.co.uk: A "nudge unit" set up by David Cameron in the Cabinet Office is working on how to use behavioural economics and market signals to persuade citizens to behave in a more socially integrated way.

The unit, formally known as the Behavioural Insight Team, is being run by David Halpern, a former adviser in Tony Blair's strategy unit, and is taking advice from Richard Thaler, the Chicago professor generally recognised as popularising "nudge" theory – the idea that governments can design environments that make it easier for people to choose what is best for themselves and society.

Thaler is a good bet for the Nobel.  Hat tip Martin Ryan at Geary.

1 fishsticks September 30, 2010 at 2:50 pm

With the implicit assumption that the government knows what is best for all individuals.

2 Bill September 30, 2010 at 3:15 pm

Not creeped out at all. We elect governments as part of a consensual process. This stuff is all public–things like ways to avoid government costs from people littering the highway. Anything they do is public.

You might want to go to Thaler’s website and look at what really is involved and the kinds of projects that are often mentioned. Here is the link: http://nudges.org/

And, by the way, do you not think that advertisers and other business motivators do the same thing. If you think not, then they have succeeded in hiding it from you while still nevertheless influencing you. Ever not opt out of something? Continue a subscription based on an offer of free goods? Upsize to something you didn’t really want but it looked like a good deal relative to the initial offering?

3 Andrew September 30, 2010 at 3:53 pm

No Bill, advertisers and other business motivators don’t tax me to fund nudging me. And if you are letting them, stop it.

4 Jim September 30, 2010 at 4:10 pm

Nice to see the Brits setting up a Nudge Unit.

Next up: the Wink Unit.

5 Andrew September 30, 2010 at 4:34 pm

The French are setting up the Frottage Unit. Or Unit Frottage as the case may be.

6 Bill September 30, 2010 at 5:43 pm

@Sean. Agree with you. Plott got screwed. He is a great experimentalists and a very good and objective economist.

@Andrew, Last time I checked, Cameron wasn’t a lefty. This nudge stuff is all public stuff. Basically is a substitute for Ad council campaigns.

But, I think you are greatly missing the point, big time.

We enact laws like don’t litter on the sidewalk. We spend money trying to enforce these laws, advertising that it is illegal to litter on the sidewalk. Public programs to enforce the law–effective ones which do not require much public expenditure as to other methods of enforcement–should be persued first. They are less intrusive than a cop. Less intrusive than a fine. And, some things we do actually encourage people to violate the law, when structuring it a different way would obtain voluntary compliance. In other case, we write laws that in gory detail require stupid disclosures–fine print if you will–that people ignore, but wiser nudge approaches have less verbiage and result in consumer awareness–and they still get to make a decision on what they want to do. (Ever wonder why industry lobbyists lobby for the type of disclosure that is given to consumers, at what time and what form it is given?)

Prof. Robert Cialidini gave a lecture on this at Oxford or LSE last year. It turns out you don’t have to spend as much enforcing the law when you use some nudge techniques.

What concerns me more is someone like Dick Cheney who would take away your privacy rights in a blink of an eye. And not tell you about it.

7 Roy September 30, 2010 at 7:25 pm

If someone consistently nudged you, I believe you could charge them with battery. I don’t see why this is seen as so benign.

8 Wimivo September 30, 2010 at 9:26 pm

If someone consistently nudged you, I believe you could charge them with battery. I don’t see why this is seen as so benign.

*facepalm*

9 BPO September 30, 2010 at 10:30 pm

“What concerns me more is someone like Dick Cheney who would take away your privacy rights in a blink of an eye. And not tell you about it.”

How very blindered and selective of your obviously deep concern over the issue.

10 Bill September 30, 2010 at 11:45 pm

BPO, My comment is clear: publicly disclosed nudging is different than secret evesdropping without judicial supervision. Got a problem with it.

11 Andrew October 1, 2010 at 7:35 am

Bill,

I don’t think I’m missing the point. You’ve never seen me say a good word about Cheney, but I’m not sure he was more secretive about things than Obama. Barry’s putting up a pretty vigorous fight to keep his shenanigans out of court. Cheney didn’t seem embarrassed in the least.

Anyway, sure there are laws against littering. But there aren’t as yet laws forcing you to jog or put a socially normative amount in 401(k).

And Charlie Munger said that probably the biggest impact of Cialdini’s work was all the salesmen who bought the book to figure out how to manipulate people.

12 Andrew October 1, 2010 at 7:59 am

Straw Man?

How so? Bill says it’s the same for government as for business. They are not the same. I know that Bill and other lefties think “the government is us.” If they don’t really mean it, they why do they keep saying it.

I could come up with a thousand obvious distinctions to make the “government R us” meme obviously tripe, but the fact that I can abstain from a business is the relevant one here.

13 Andrew October 1, 2010 at 8:46 am

Bill,

I’m not talking about the people who come up with these schemes. I’m talking about the people who allow them to happen. As in why aren’t lefties suspicious of libertarian nudgers? They’d be suspicious of libertarians anywhere else.

I use labels like “lefty” because it saves a lot of time and because since we aren’t trying to tar and feather eachother we can use short hand. Nobody reading here really cares who is a lefty or a right-wing nut. It’s not an insult to smart people.

14 Rich Berger October 1, 2010 at 8:59 am

I thought Andrew’s use of the word “nonplussed” was incorrect, but I see that there are two contradictory definitions – bewildered, stunned and unimpressed, unfazed.

I remain nonplussed.

15 Document Scanning Services October 1, 2010 at 10:16 am

This is disturbing,
The Tory government is more interested in the maintenance of the wealth of the richest in society and thus cannot be acting towards what is good for society at large.

16 Ghost of Mises October 1, 2010 at 2:08 pm

And how can we “nudge” governments to do what’s best for society? How can we “nudge” economists to stop coming up with rehashed socialistic and police state ideas?

17 Andrew October 2, 2010 at 12:06 pm

Bill,

Actually I don’t think you did. You equate openness with justice. I’m saying some transaction costs are a good thing. I prefer cops over traffic cameras and their automated fines by mail for example. I’m not a big fan of predator drones.

There are also costs involved with democratic oversite of the government. The government is not even the voters. Openness doesn’t necessarily mean it is easier for voters to change the government if all the nudges are on one side. Just because people know of evil doesn’t mean they will or can do something about it. In fact, what is automated is probably more dangerous than a CIA guy who actually has to hold some terrorist under the water.

Automated Kafkaesque bureaucracy is a nightmare in my view.

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