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College students gain a considerable amount of weight by consuming unhealthy food. Many universities adopt costly programs to alleviate this problem. We study the effect of a simple, inexpensive option: moving unhealthy items out of sight. The opportunity to investigate this intervention comes from the decision of a dining hall in the University of New Hampshire that relocated cookies from a main section in plain sight to an out-of-the way corner. The cost of cookies did not change, since the dining hall operates as an “all that you can eat” restaurant. Relative to pizza, a product that did not change location, the consumption of cookies dropped by up to 22% relative to their predicted level had the relocation not taken place. We see this as evidence that simple changes in design can nudge students towards healthy eating.
For all their differences, the two rival theories of human behavior have many unfortunate similarities. Standard rational choice theory posits that individuals use rational techniques to pick ends that meet their set of private preferences. Modern theories of behavioral economics point to systematic deviations from those principles. Both approaches assume that all preferences are individually based. However, the evolutionary principle of inclusive fitness insists that in family situations, it is the welfare of the unit, not of any of single individual, that explains various forms of natural love and affection that arise because of the interdependence of − and the redistribution of − wealth it requires. Likewise, both standard theories ignore variations in tastes and in competence levels that allow for gains from trade across competence levels. This paper then reinterprets the common treatment of nudges and the various legal doctrines dealing with disabilities, product liability, and firm structure where the standard assumptions of uniform behavior miss the salient features of human behavior and social interactions.
We present a large scale study where a nationally representative sample of 1000 participants were asked to make real purchases within an online supermarket platform. The study captured the effect of price changes, and of the signposting of such changes, for breakfast cereals and soft drinks. We find that such taxes are an effective means of altering food purchasing, with a 20% rate being sufficient to make a significant impact if (and only if) the tax is signposted. Signposting represents a complementary “nudge” policy that could enhance the impact of the tax, though its effectiveness depends on the product category.
In this chapter, we first provide a general overview of energy and climate policy goals and their main instruments. We underline the common goals between energy and climate policy, as well as possible conflicts in objectives. In the next part, we illustrate monetary market-based instruments such as pollution taxes, product taxes, and energy taxes, as well as subsidies and pollution permit trading systems. We also discuss, using figures, the implications of behavioural anomalies on the effectiveness of these types of policy instruments. At the end of the chapter, we introduce non-monetary market-based instruments, giving some weight to nudges. At the end of the chapter, we discuss issues in developing countries related to the topics discussed in the chapter.
Traditionally, corruption is seen as a rational pursuit of profit, focusing on personal gain. However, this view overlooks other influences. This paper focuses on the behavioral aspects of corruption, providing a deeper understanding of its complexities, and addressing the factors overlooked by conventional approaches. Reviewing some of the literature, we highlight how researchers have approached corruption from the perspective of behavioral sciences. Additionally, we examine how the emerging discipline of Behavioral Public Policy (BPP) employs innovative methods to reduce corrupt practices, offering new strategies that transcend traditional perspectives. Our paper innovates by demonstrating how corruption can be reduced by substituting traditional regulations with nonregulatory tools like nudges and sludge audits, or by leveraging digital choice architectures to minimize human-to-human interactions, known corruption enablers. By reducing regulations and administrative red tape, and introducing digital frameworks, these tools simplify processes minimizing opportunities for corrupt behavior. In this paper, we aim to infuse corruption research with a behavioral twist, a digital approach, and a deregulatory perspective, offering policymakers an alternative path to foster transparency, accountability and ethical governance. While this approach will not completely eradicate corruption, it strives to show how BPP can reduce its occurrences.
To what extent can the harms of misinformation be mitigated by relying on nudges? Prior research has demonstrated that non-intrusive ‘accuracy nudges’ can reduce the sharing of misinformation. We investigate an alternative approach. Rather than subtly reminding people about accuracy, our intervention, indebted to research on the bystander effect, explicitly appeals to individuals' capacity to help solve the misinformation challenge. Our results are mixed. On the one hand, our intervention reduces the willingness to share and believe in misinformation fact-checked as false. On the other hand, it also reduces participants' willingness to share information that has been fact-checked as true and innocuous, as well as non-fact-checked information. Experiment 1 offers proof of concept; Experiment 2 tests our intervention with a more realistic mix of true and false social media posts; Experiment 3 tests our interventions alongside an accuracy nudge. The effectiveness of our intervention at reducing willingness to share misinformation remains consistent across experiments; meta-analysis reveals that our treatment reduced willingness to share false content across experiments by 20% of a scale point on a six-point scale. We do not observe the accuracy nudge reducing willingness to share false content. Taken together, these results highlight the advantages and disadvantages of accuracy nudges and our more confrontational approach.
In this final chapter, we explore different techniques of regulatory intervention, including regulatory alternatives, taxes, behavioral nudges and such, that can be profitably used to tackle the wicked problems described in the previous chapter, and other problems that may emerge and persist in the modern U.S.
In the philosophy of mind and cognitive science, there is a pronounced paradigm shift associated with the transition from internalism to externalism. The externalist paradigm views cognitive processes as not isolated in the brain, but as interrelated with external artefacts and structures. The paper focuses on one of the leading externalist approaches – extended cognition. Despite the dominance of internalism in economics, in its main schools, there is an emerging trend towards extended cognition ideas. In my opinion, economists might develop the most advanced version of the extended cognition approach: socially extended cognition based on cognitive institutions. This paper analyses extended cognition ideas in institutional, Austrian, and behavioural economics and identifies numerous overlapping approaches and complementary research areas. I argue that the economics of cognitive institutions is a promising field for all economic schools and propose a preliminary research agenda.
Green nudges are used to promote conservation and pro-environmental behavior. This study examines the lasting effectiveness of a green default nudge in paper conservation, where price incentives are absent. At a private college in New York City, the default print setting was changed from single-sided to double-sided in Spring 2019, accompanied by a salient pop-up window that asked students to print double-sided. Analyzing student-level data over four semesters (Spring 2018 and Fall 2018 as control, Spring 2019 and Fall 2019 as treatment), this research contributes to the literature as it studies the effect of the nudge in the absence of pecuniary incentives. The findings support the hypothesis that this green default nudge was effective in promoting paper conservation and increasing resource efficiency. Results show that double-sided printing increased while single-sided printing decreased, leading to an overall reduction in paper usage. Employing a panel regression model with student fixed effects, this study finds that the nudge had a statistically significant effect in reducing the sheets per page ratio, and it improved the efficient use of paper by 19 percent. This inexpensive behavioral intervention proves successful in promoting environmental behavior and reducing paper consumption, which reduces greenhouse gas emissions.
Early in the pandemic, the public accepted considerable state intervention to stop the spread of COVID-19. This was a puzzle of sorts, given the prevailing wisdom that people prefer to be nudged and avoid restrictions and financial costs. We revisit and update the evidence presented in an earlier study that explored the factors that explain public preferences for ‘soft’ (nudge) versus ‘hard’ (laws, bans) policies. We report that public support for ‘hard’ policies appears to have steadily declined since mid-2020. New insights reflect the importance of partisanship and risk perceptions for individual preferences for ‘hard’ or ‘soft’ policies. We find little evidence of spillover effects from COVID-19 policy preferences to environmental policy preferences, but also no evidence of crowding out in terms of policy agendas. We conclude with a series of questions that shape the future research agenda, where much is still to be learned about how and why policy preferences evolve over time.
In this chapter, we first review factors that may either produce vaccine hesitancy or lead people with favourable attitudes towards a vaccine to not get vaccinated soon enough. Then we propose behavioural science strategies for tackling these barriers to vaccine uptake and demonstrate that effective solutions vary based on individuals’ existing motivation to get vaccinated. This chapter ultimately seeks to synthesise behavioural science insights about promoting vaccinations and to highlight that aligning the intervention to the cause of individuals’ vaccination problem is key for effectively moving the needle for everyone.
The diversity of knowledge surrounding behavioural insights (BI) means in the policy sciences, although visible, remains under-theorized with scant comparative and generalizable explorations of the procedural prerequisites for their effective design, both as stand-alone tools and as part of dedicated policy 'toolkits'. While comparative analyses of the content of BI tools has proliferated, the knowledge gap about the procedural needs of BI policy design is growing recognizably, as the range of BI responses grows in practice necessitating specific capabilities, processes and institutional frameworks to be in place for their design. This Element draws on the literature on policy design and innovation adoption to explore the administrative, institutional and capacity endowments of governments for the successful and appropriate integration of BI in existing policy frameworks. Further, we present three illustrative cases with respect to their experience of essential procedural endowments facilitating for the effective integration of BI in policy design.
Chapter 3 links context-dependent choice with what has recently been called in economics the “reconciliation problem” between positive and normative economics, and argues that efforts to solve that problem have led to a number of different strategies for reconstructing economics’ individual conception. It first reviews the mainstream’s “inner rational agent” attempt to preserve Homo economicus and then contrasts two broad strategies for reconstructing economics’ individual conception based on opposing views of individual autonomy: an “internalist” view that makes it depend on private subjectivity, and an “externalist” view that makes it depend on economic and social institutions. The chapter reviews four, recent strategies in the literature which take the “externalist” view and move toward a socially embedded individual conception. All four make ability to adjust part of what people are, but all four remain attached to the idea that individuals are only made up of preferences. Thus, I argue they fail to explain how people are autonomous individuals able to choose and act freely.
Three theoretical traditions dominate our understanding of decision-making. The rational actor model assumes individuals are self-interested and maximize their utility subject to budget and time constraints. When outcomes depend on the decisions of others, as in the problem of common pool resources, trust and norms can avoid support sustainability. Social psychological models examine the role of values, especially altruism and self-interest, beliefs, norms, identity, emotions, empathy and trust in decision-making. The heuristics and biases literature shows that decisions are often based on mental shortcuts that deviate from the rational actor model. Our tendency towards biased uptake of new information and communicating mostly with those similar to us can lead to polarization. The three theories can be viewed as complementary: each yields important insights into decision-making.
Joan Costa-Font, London School of Economics and Political Science,Tony Hockley, London School of Economics and Political Science,Caroline Rudisill, University of South Carolina
This chapter goes over the decision to purchase health insurance (or not). The way information is presented to individuals has a significant impact on their decision to purchase insurance to protect themselves from the financial consequences of health risks. Eliminating minor inconvenience costs or simplifying the insurance selection process can influence whether or not people purchase insurance. This chapter examines the roles of adverse selection and moral hazard in insurance-related behaviour, as well as the barriers to insurance uptake for individuals ranging from affordability to unobservable quality and information/choice overload. The chapter investigates the role of various nudges in increasing health insurance uptake.
Since advice is central to what we are discussing here, it might be worthwhile to spend some time simply thinking about what advice is, what are the different types of advice we might come upon in our daily lives, and how advice is treated by different academic disciplines. That is what we do here. We ... first define what advice is, then categorize advice into some common-sense categories without expecting our categories to be either exhaustive or mutually exclusive. Finally, we discuss the way advice is treated in the economics and psychology literature, and contrast their approaches to the topic. In our next chapter, we turn our attention to conventions of behavior and the intergenerational games determining them.
To serve as reference comparators to the political economy of behavioural public policy that I will present in the rest of the book, I will review the principal alternative (partial) frameworks that have been introduced into the field of behavioural public policy. I present the conceptual requirements of the most influential approach to date - i.e. libertarian paternalism, applications of which are known as nudges. I move on to several of the alternative frameworks that have been developed to meet major criticisms that have been waged against nudges - namely coercive paternalism (or shove policy), and the nudge-plus and boost strategies. All of these approaches aim at correcting perceived behavioural limitations on the demand side. I then introduce a framework that instead attempts to tackle the egoistic exploitation of the behavioural influences from the supply side - i.e. behavioural regulation, or the so-called budge approach. However, since budges are one of the two main arms of my political economy of behavioural public policy, a large part of a whole chapter (Chapter 9) is devoted to them, and thus their consideration in this chapter is quite brief.
Policy makers should understand people’s attitudes towards opt-out nudges to smoothly promote and implement the policies. Our research compares people’s perceptions of opt-in and three improved versions of opt-out (transparency, emphasis on the low-cost opt-out option, education) in pro-social and pro-self policy domains, e.g., organ donation (N=610), carbon emission offset (N=613), and retirement saving (N=602). We found that people acknowledged more practical and societal benefits of opt-out than opt-in in organ donation and retirement saving but less so in carbon emission offset. Improved opt-out policies failed to address ethical concerns and most emotional discomfort concerns in organ donation whereas opt-out transparency and emphasis on low-cost opt-out were more successful than education at addressing concerns in retirement saving and carbon emission offset. Nonetheless, transparency and education may raise consciousness of policies’ aims. The results suggest that 1) acceptability of opt-out approaches may be more difficult to enhance in some domains than others; 2) policy makers should ensure the public understands that opt-out is a convenient choice and may consider combining all forms of improvement to increase people’s acceptance of opt-out nudges.
To successfully select and implement nudges, policy makers need a psychological understanding of who opposes nudges, how they are perceived, and when alternative methods (e.g., forced choice) might work better. Using two representative samples, we examined four factors that influence U.S. attitudes toward nudges – types of nudges, individual dispositions, nudge perceptions, and nudge frames. Most nudges were supported, although opt-out defaults for organ donations were opposed in both samples. “System 1” nudges (e.g., defaults and sequential orderings) were viewed less favorably than “System 2” nudges (e.g., educational opportunities or reminders). System 1 nudges were perceived as more autonomy threatening, whereas System 2 nudges were viewed as more effective for better decision making and more necessary for changing behavior. People with greater empathetic concern tended to support both types of nudges and viewed them as the “right” kind of goals to have. Individualists opposed both types of nudges, and conservatives tended to oppose both types. Reactant people and those with a strong desire for control opposed System 1 nudges. To see whether framing could influence attitudes, we varied the description of the nudge in terms of the target (Personal vs. Societal) and the reference point for the nudge (Costs vs. Benefits). Empathetic people were more supportive when framing highlighted societal costs or benefits, and reactant people were more opposed to nudges when frames highlighted the personal costs of rejection.
In recent years, many governments have shown a keen interest in “nudges” — approaches to law and policy that maintain freedom of choice, but that steer people in certain directions. Yet to date, there has been little evidence on whether citizens of various societies support nudges and nudging. We report the results of nationally representative surveys in six European nations: Denmark, France, Germany, Hungary, Italy, and the United Kingdom. We find strong majority support for nudges of the sort that have been adopted, or under serious consideration, in democratic nations. Despite the general European consensus, we find markedly lower levels of support for nudges in two nations: Hungary and Denmark. We are not, in general, able to connect support for nudges with distinct party affiliations.