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It probably won't come as much of a shock to folks here, but this article has a misleading title. In the third paragraph, "Nudges hardly help" softens all the

It probably won't come as much of a shock to folks here, but this article has a misleading title. In the third paragraph, "Nudges hardly help" softens all the way to "nudging sometimes... isn’t effective". I've come across three groups of reactions to "Nudging": 1) Yay! Let's use science for good! 2) Yeah but it's not a silver bullet 3) I think they're brainwashing us Camp 1 is sensible, and has room for discussion about ethics, rigour, etc. Camp 2 is arguing against a straw man. Camp 3 is a reasonable position to hold if you have government trust issues and don't understand what's happening, so is an education and operational transparency problem more than anything. Edit: disclaimer, I've worked closely with a nudge unit but am not an employee of one

nickff 11y ago
I have issues with nudging, but am unsure of whether I fit in one of your categories. My issues are: a) When a few people make de-facto decisions for everyone else, those decisions are prone to causing black swans because of a lack of (real) diversification of risk. One example of this would be if 20 countries used the default retirement portfolio scheme (that is often used to support nudges), and in one country, the portfolio was not diversified against a type of risk (i.e. interest rate or mortgage default), that could cause severe malinvestment and economic calamity in one country. It would have been much better for 1 in 20 people to make the mistake than 1 in 20 countries. b) People's decision making abilities are like any other skill (i.e. language, writing, arithmetic), in that they atrophy over time if they are not used. If the people have no reason to look out for themselves, they may not realize when the nudgers are abdicating their responsibilities. In addition to that, financial decisions give clear feedback and have good incentives for the individual, which allows and requires people to exercise their decision making abilities, that will be useful in other areas of life. Perhaps I fit in to your 'group 3', but either way, I'd be interested to hear your thoughts (if you would be interested in giving any) on these two objections.
- richmarr 11y ago
  Good points all. Point (a) is a potentially a huge problem, I agree. An entire country suffering from poor pension investments all at once could have disasterous consequences. My understanding of the typical pension opt-in change is that it opts you in to your company's default pension rather than a state default pension, so the nation as a whole would have diversification even if customers of some pension providers are at risk (unless that nation didn't have diverse pension providers, in which case they already have a problem). Could be wrong, not my area. Issue (b) is interesting too. I'd say it fell into my third group because it seems to rest on people being lulled into a false sense of security and then taken advantage of. There are a couple of reasons why I don't think it'd be a problem... one applies to "good" nudge units and the other is more general. Firstly, at a 'good' nudge unit they operate transparently, both at the point of intervention and when publishing findings after the fact. If you look at Richard Thaler's work, he uses 3 'laws' to define 'good' nudges that make it hard for abuse to seem possible: http://www.nytimes.com/2015/11/01/upshot/the-power-of-nudges-for-good-and-bad.html http://www.nytimes.com/2015/11/01/upshot/the-power-of-nudges... Secondly, a more general point. Nudge units on the whole use a tiny subset of the psychological arsenal that companies use daily. They only use the stuff there's clear scientific evidence for ploughing on layers of gamification, incentives, information assymetry, etc. Yet companies do not feel bound by Richard Thalers "3 laws of nudging", they rarely follow more than 1. That's fair enough, as it's harder to switch to a different government and governments have more power over us, but it does raise the question... if our decision making skills atrophy over time then that would have already happened with companies, and I'm not sure I've seen evidence to support that view. Again, could be wrong.
woody223 11y ago
The author seems to have fallen into the 2nd camp. His criticism seems to be based on nudges that haven't resolved an underlying problem. Which should not be a surprise. Nudge (the book) did not argue that structuring default choices with an awareness of behaviour and psychology would immediately resolve the core issue. Only that it would be better starting point than not thinking intelligently about defaults and the decision making process.

nickff 11y ago

I have issues with nudging, but am unsure of whether I fit in one of your categories. My issues are: a) When a few people make de-facto decisions for everyone else, those decisions are prone to causing black swans because of a lack of (real) diversification of risk. One example of this would be if 20 countries used the default retirement portfolio scheme (that is often used to support nudges), and in one country, the portfolio was not diversified against a type of risk (i.e. interest rate or mortgage default), that could cause severe malinvestment and economic calamity in one country. It would have been much better for 1 in 20 people to make the mistake than 1 in 20 countries. b) People's decision making abilities are like any other skill (i.e. language, writing, arithmetic), in that they atrophy over time if they are not used. If the people have no reason to look out for themselves, they may not realize when the nudgers are abdicating their responsibilities. In addition to that, financial decisions give clear feedback and have good incentives for the individual, which allows and requires people to exercise their decision making abilities, that will be useful in other areas of life. Perhaps I fit in to your 'group 3', but either way, I'd be interested to hear your thoughts (if you would be interested in giving any) on these two objections.

richmarr 11y ago
Good points all. Point (a) is a potentially a huge problem, I agree. An entire country suffering from poor pension investments all at once could have disasterous consequences. My understanding of the typical pension opt-in change is that it opts you in to your company's default pension rather than a state default pension, so the nation as a whole would have diversification even if customers of some pension providers are at risk (unless that nation didn't have diverse pension providers, in which case they already have a problem). Could be wrong, not my area. Issue (b) is interesting too. I'd say it fell into my third group because it seems to rest on people being lulled into a false sense of security and then taken advantage of. There are a couple of reasons why I don't think it'd be a problem... one applies to "good" nudge units and the other is more general. Firstly, at a 'good' nudge unit they operate transparently, both at the point of intervention and when publishing findings after the fact. If you look at Richard Thaler's work, he uses 3 'laws' to define 'good' nudges that make it hard for abuse to seem possible: http://www.nytimes.com/2015/11/01/upshot/the-power-of-nudges-for-good-and-bad.html http://www.nytimes.com/2015/11/01/upshot/the-power-of-nudges... Secondly, a more general point. Nudge units on the whole use a tiny subset of the psychological arsenal that companies use daily. They only use the stuff there's clear scientific evidence for ploughing on layers of gamification, incentives, information assymetry, etc. Yet companies do not feel bound by Richard Thalers "3 laws of nudging", they rarely follow more than 1. That's fair enough, as it's harder to switch to a different government and governments have more power over us, but it does raise the question... if our decision making skills atrophy over time then that would have already happened with companies, and I'm not sure I've seen evidence to support that view. Again, could be wrong.

woody223 11y ago

The author seems to have fallen into the 2nd camp. His criticism seems to be based on nudges that haven't resolved an underlying problem. Which should not be a surprise. Nudge (the book) did not argue that structuring default choices with an awareness of behaviour and psychology would immediately resolve the core issue. Only that it would be better starting point than not thinking intelligently about defaults and the decision making process.