Title: Nudges - Economics Help
Headings: Nudges
Nudges
Examples of nudges
Examples of nudges
Commercial nudges
Evaluation of nudges
Nudge theory
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Content: Nudges - Economics Help
Nudges
Nudge theory suggests consumer behaviour can be influenced by small suggestions and positive reinforcements. Proponents of nudge theory suggest that well-placed ‘nudges’ can reduce market failure, save the government money, encourage desirable actions and help increase the efficiency of resource use. Critics argue nudges can be misused and become a form of social engineering or way to encourage consumers to buy goods they don’t really need. With Richard Thaler being awarded the Nobel Prize in economics for his work on behavioural economics, nudges are likely to become increasingly common in everyday life. In the UK, the Behavioural Insights Unit was set up to use behavioural economics in order to improve choices. Their remit includes: making public services more cost-effective and easier for citizens to use; improving outcomes by introducing a more realistic model of human behaviour to policy, and wherever possible,
enabling people to make ‘better choices for themselves’. Behavioural Insights Unit
Examples of nudges
Up-sell. If you go to a fast-food restaurant, servers are trained to ‘up-sell’ – this means they offer extra options to go with the meal.