Why Government ‘Nudges’ motivate good citizen behavior..

Article in HBSWK on Governments nudging:

Most governments aren’t subtle when they want citizens to do something. The United States spends close to $1 billion annually on advertising–trying to convince citizens to do everything from taking flu prevention shots to reporting unattended suitcases at the airport. But now agencies are finding that subtle “nudges” can motivate behavior much better than ads, fines, or deadlines.

Nudges, or small changes to the context in which decisions are made, are the subject of a new analysis by Harvard Business School Associate Professor John Beshears and colleagues, recently published in the journal Psychological Science. The paper, Should Governments Invest More in Nudges? answers its own question with a resounding “Yes.”

“We suspected that nudges on an impact-per-cost basis would be superior to traditional approaches such as a financial incentive or an educational campaign,” says Beshears. “But we were surprised to see the extent to which it is true.”

According to behavioral scientists, nudges are dollar for dollar a hugely cost-effective way of causing people to change behavior and do the kinds of things that government wants them to do, like save for retirement—which are both for the good of society and for their own good.

The idea is to make nudges complementary to existing incentives and try motivate System1 thinking:

Beshears attributes the effectiveness of nudges to the way they target our thought process. He takes a page from Princeton psychologist Daniel Kahneman, who identifies two types of thinking: System 1 decision-making is fast and intuitive, while System 2 decision-making is slow and deliberative.

As much as we might want to believe we are thoughtful, rational creatures, the truth is that humans spend most of their time in System 1 thinking. “Most of what we do day in and day out is act on autopilot as a way to conserve our cognitive resources,” Beshears says. “If we used System 2 the entire day, we’d get too tired.” Nudges tend to work with System 1 thinking, he says, because they make certain choices the more natural and convenient option.

That isn’t to say that nudges are always the most effective way for governments to make their citizens do the right thing. In cases like enforcing pollution regulations, for example, fines are likely more effective, in part because the decisions that go into building a factory are slow and deliberative, taking into account all of the incentives using System 2 thinking. For everyday decisions made by citizens, however, governments should at least consider nudges as a way to supplement—if not replace—traditional incentives.

“When governments are thinking about how to deploy scarce resources, it’s important to do this kind of cost-impact analysis to think about the merits of different policies,” Beshears says. “Doing so makes the case that nudges are often a particularly fruitful avenue to invest in.”

Nice bit…

2 Responses to “Why Government ‘Nudges’ motivate good citizen behavior..”

  1. vikramml Says:

    The govt shouldn’t be in the business of wanting people to do anything. It is beyond retarded to think that a bunch of bureaucrats should be deciding what people should or shouldn’t do. This is the crap that HBS puts out. And, this isn’t anything new. Govts have been nudging people into doing good or bad things since time immemorial. Anybody remember the nudging into the Iraq war? Why the asinine assumption that govt or govt agencies will always nudge people into “good” behavior?

    • vikramml Says:

      All state propaganda can be termed nudging as well. HBS is basically promoting the use of state propaganda under the usual garb of state knows best for the public, which starts out fine but we know where it can end. Here’s your elite business school today. Beyond ridiculous! Then people wonder why commoners are anti-elite?!!

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