Legal Commentary

The Science of Nudging and Why Barack Obama Might Be Elected President of the United States : Improving Decisions About Health, Wealth, and Happiness

By Andis Kaulins

Behavioural economics might tell us.

According to its theories, the election might then well go to the candidate who best masters "the science of nudging", and at the moment that candidate might well be Barack Obama, whose vision of change is what a behavioural economist might call an exercise in "choice architecture" - a classic nudge.

Aditya Chakrabortty writes about the nudge as follows at The Guardian, Saturday July 12, 2008, in From Obama to Cameron, why do so many politicians want a piece of Richard Thaler?

"What is the big idea of Richard Thaler, the economist quoted by David Cameron and Barack Obama? It comes down to this: you're not as smart as you think. Humans, he believes, are less rational and more influenced by peer pressure and suggestion than governments and economists reckon.

"Economists assume people have brains like supercomputers that can solve anything," says Thaler. "But human minds are more like really old Apple Macs with slow processing speeds and prone to frequent crashes."

According to this view, voters are less Mr Spock than Homer Simpson and they could do with a bit of help - what Thaler terms a "nudge" - to save more, eat more healthily and do all the other things that they know they should.

Cameron is so interested in the idea that in a speech last month he mentioned Thaler, his co-author Cass Sunstein and even the fact they had a new book out, Nudge. He then summed up their argument: "One of the most important influences on people's behaviour is what other people do ... with the right prompting we'll change our behaviour to fit in with what we see around us." It was surely the best plug two Chicago academics with a book about the obscure discipline of behavioural economics could hope for." [emphasis added by LawPundit]

Read the whole article here.

Nudge co-authors Richard Thaler and Cass Sunstein are interviewed at the Amazon.com page of their book, providing us with an introduction to the science of nudging and "Improving Decisions About Health, Wealth, and Happiness":

"Amazon.com: What do you mean by "nudge" and why do people sometimes need to be nudged?

Thaler and Sunstein: By a nudge we mean anything that influences our choices. A school cafeteria might try to nudge kids toward good diets by putting the healthiest foods at front. We think that it's time for institutions, including government, to become much more user-friendly by enlisting the science of choice to make life easier for people and by gentling nudging them in directions that will make their lives better.

Amazon.com: What are some of the situations where nudges can make a difference?

Thaler and Sunstein: Well, to name just a few: better investments for everyone, more savings for retirement, less obesity, more charitable giving, a cleaner planet, and an improved educational system. We could easily make people both wealthier and healthier by devising friendlier choice environments, or architectures....

Amazon.com: What is "choice architecture" and how does it affect the average person's daily life?

Thaler and Sunstein: Choice architecture is the context in which you make your choice. Suppose you go into a cafeteria. What do you see first, the salad bar or the burger and fries stand? Where's the chocolate cake? Where's the fruit? These features influence what you will choose to eat, so the person who decides how to display the food is the choice architect of the cafeteria. All of our choices are similarly influenced by choice architects. The architecture includes rules deciding what happens if you do nothing; what's said and what isn't said; what you see and what you don't. Doctors, employers, credit card companies, banks, and even parents are choice architects. [emphasis added by LawPundit]

We show that by carefully designing the choice architecture, we can make dramatic improvements in the decisions people make, without forcing anyone to do anything. For example, we can help people save more and invest better in their retirement plans, make better choices when picking a mortgage, save on their utility bills, and improve the environment simultaneously. Good choice architecture can even improve the process of getting a divorce--or (a happier thought) getting married in the first place!

...

Amazon.com: Are we humans just poorly adapted for making sound judgments in an increasingly fast-paced and complex world? What can we do to position ourselves better?