Nudges

In 2012, the then-mayor of New York City Michael Bloomberg announced an amendment to the city’s Health Code that would ban any soft drink larger than 16 ounces. The measure came out of a concern for public health but people were infuriated, railing against a “nanny state” that had overstepped its boundaries.¹ The amendment was repealed in 2015 after courts ruled that the city had exceeded its regulatory authority. Years later, however, researchers tested an intervention at McDonald’s stores, to see if they could get people to choose less sugary drink options simply by changing the order in which they appeared on the menu. Turns out they could: after 12 weeks, Coca-Cola consumption was down 8%, Coke Zero was up 30%, and nobody was mad.²

This intervention is an example of nudge theory, one of the most influential frameworks to come out of behavioral economics. As decades of research in this field have demonstrated, people are often irrational in their decision-making—but they also make errors in systematic, predictable ways.³ Nudges are interventions that capitalize on these biases, but they do so in a non-coercive way, without restricting people’s options or forcing their hand.