In a world that overloads us with information and temptation, it’s nice to get some help that steers us towards making better choices. That’s the idea behind nudges – a broad term for behavioral science techniques that aim to influence how we make decisions.
The underlying philosophy behind nudges is libertarian paternalism: people should be free to make the decisions they want, but policymakers can present these choices in ways that lead to desired outcomes. For instance, employees contribute significantly more to their savings plans when they are automatically enrolled in a 401(k) program compared to when they need to opt-in. These policies help individuals save more for retirement, a generally desired goal that many may not achieve otherwise.
Should we be concerned about the use of nudges?
Yet as noted by Cass Sunstein, one of the most prominent proponents of nudging, “there can be a thin line between a self-control problem and a legitimate focus on short-term pleasure.” Despite their cost-effectiveness and wide applicability, legitimate concerns remain about if, when, and how we should nudge.
Should policymakers be influencing how people make these kinds of decisions? Even though nudges don’t mandate behaviors like laws, are nudges manipulating people into decisions they would not endorse upon reflection?
Our answers to these types of questions depend on many factors. In particular, recent research from social psychology suggests that how nudges are presented, and who presents them, strongly impacts our perceptions of these policies.
Choice Architecture – Defaults Matter
Imagine you’re moving into a new apartment with basic amenities and are given an opportunity to purchase premium upgrades. Now, imagine that you’re moving into a new apartment with already upgraded amenities and are given the chance to opt-out of the upgrades for the basic package.
These two scenarios offer exactly the same decision outcomes, but they differ in the default option (basic vs. premium amenities). The way that choices are framed for decision-makers is called choice architecture, and changing the choice architecture of a given scenario can significantly impact the decisions people make.
For instance, research from Mary Steffel and her colleagues found that participants in the opt-out (premium default) condition kept more premium amenities than those in the opt-in (basic default) condition choose to purchase. Similar results emerged when environementally-friendly, “green” amenities were substituted for premium options.
Transparency and Motives of Choice Architecture
Interestingly, unlike many studies on default effects, Steffel also disclosed why the apartment options had been presented to the participants in a specific way.
The “green” amenities were framed as benefitting society while the premium amenities were framed as benefitting the apartment complex owner. Participants were told about how the set defaults may influence their decision-making as well. Each participant then rated the opt-in or opt-out scenario they were given on how ethical they thought it was.
The opt-out was perceived as less ethical than the opt-in for the premium amenities, but participants thought the opt-out and opt-in were equally ethical for the “green” packages. These results suggest that the perceived motives of the choice architect play a significant role in whether people approve of nudges. Perhaps unsurprisingly, nudges benefitting society are seen as more ethical than nudges benefitting a single business or person.
Nevertheless, nudges perceived as unethical are still effective. In the aforementioned study, the nudge still prompted people to buy more premium items even when it was disclosed and perceived to be unethical. Given the subtle power of even transparent nudges, businesses and policymakers will need to be trusted – and held accountable – to use these behavioral tools ethically.
Thus, those advocating for the wider use of nudges must overcome citizens’ current lack of trust in institutions and the divisive polarization of partisan politics. The ethical use of these techniques will often require bipartisan agreement on desired outcomes, a state of affairs that rarely exists and is even psychologically avoided.
The Inconsistent Politics of Nudges
Established in 2010 under conservative Prime Minister David Cameron, the Behavioral Insights Team was the first “nudge unit” developed to utilize behavioral science techniques in government policy. The Social and Behavioral Sciences Team established under President Obama followed suit in 2015 and has also produced many successful interventions over the last few years.
It’s notable that a UK conservative and a US liberal championed these teams. Yet principled critiques of these nudge units have come from across the political spectrum.
Why are there such political discrepancies in support for nudges? Researcher David Tannenbaum and his colleagues suggest that partisanship itself is the problem.
Partisan Nudge Bias
To examine these partisan biases, Tannenbaum showed participants legislation that proposed automatic enrolment defaults to encourage retirement savings behavior. This provision, part of the 2006 Pension Protection Act (PPA), was presented as an example of a behavioral tool that could be implemented “across a wide range of policies beyond the illustration above.” This provision was approved by both Presidents George W. Bush and Barack Obama, but participants were told that only one of the presidents, or a vague description of “lawmakers,” enacted the policy.
When asked how they felt about nudges as a general policy tool, liberals and conservatives generally approved of nudges in the “lawmakers” approved condition. Predictably, partisans’ feelings towards nudges as a tool – not just their feelings for the specific policy – shifted as a function of the President they thought approved the legislation. Liberals liked nudges more when Obama approved the PPA and disliked them when Bush approved it. Conservatives displayed the opposite effect.
In subsequent studies, Tannenbaum demonstrated that these partisan nudge biases are not limited to regular citizens. State and local bureaucrats, and even a group of mayors, exhibited similar biased evaluations. Policymakers liked automatic enrolment defaults significantly more when they were illustrated by an example that aligned with their politics. Even for professional policymakers, much of the opposition to nudges seemingly takes the form of partisan antipathy.