The nudge theory

The nudge theory

Behavioral economists show that when humans make quick decisions under pressure, it is based mostly on intuition. They are unconsciously guided by biases and psychological fallacies.

The nudge theory suggests making subtle interventions to nudge people to make certain choices without restricting them. Putting the fruit at eye level counts as a nudge.

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medium.com

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Japanese train stations use nudge theory.

  • Blue lights improve the mood of commuters and reduce suicide attempts.
  • The door closing jingle lighten the highly stressed peak hour commute.
  • A high-frequency tone at station entrances reduce teenage loitering as the 17kHz can only be heard by people under 25 years.

Biases are hardwired and difficult to change. To change behavior, attention is not paid to countering the problematic thoughts, judgments, or predictions. Instead, it has been directed to changing the behavior in the form of incentives or "nudges."

xample, employers have been able to nudge employees into contributing to retirement plans by making saving the default option; you have to actively take steps to not participate. _

The task of a choice architect is to organize the context in which people make decisions.

Changing the context in which people make choices can make desired behaviors easier to accept.

  • Intuitive and automatic: This kind of thinking is quick and feels instinctive. You duck when a ball is thrown at you unexpectedly.
  • Reflective and rational: This thinking is deliberate and self-conscious. You use this system when you have to decide which route to take for a trip.

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RELATED IDEAS

Position of products influences our decision of buying
We don't just buy products because of what they are, but we often buy them because of where they are. For example, items on store shelves that are at eye level tend to be purchased more than items on less visible shelves.
Default choices

90% of your daily decisions happen automatically, many shaped by your environment. Thus, most decisions are a habit, not a deliberate choice.

To make smarter choices, design smarter defaults. And habits can be developed by shaping the invisible defaults of your life.

Think about vulnerable employees when choosing the default option

If one option is better for rich and experienced people while another is better for vulnerable individuals, use smart defaults, which pre-select different options for different people to try to benefit all people.

When that is not possible, always choose the option that benefits vulnerable employees, because they are typically more likely to keep default options.

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