The Power of Nudges, for Good and Bad - The New York Times - 1 views
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Nudges, small design changes that can markedly affect individual behavior, have been catching on. These techniques rely on insights from behavioral science
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when used ethically, they can be very helpful. But we need to be sure that they aren’t being employed to sway people to make bad decisions that they will later regret.
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Three principles should guide the use of nudges:■ All nudging should be transparent and never misleading.■ It should be as easy as possible to opt out of the nudge, preferably with as little as one mouse click.■ There should be good reason to believe that the behavior being encouraged will improve the welfare of those being nudged.
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the government teams in Britain and the United States that have focused on nudging have followed these guidelines scrupulously.
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Many companies are nudging purely for their own profit and not in customers’ best interests. In a recent column in The New York Times, Robert Shiller called such behavior “phishing.” Mr. Shiller and George Akerlof, both Nobel-winning economists, have written a book on the subject, “Phishing for Phools.”
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Some argue that phishing — or evil nudging — is more dangerous in government than in the private sector. The argument is that government is a monopoly with coercive power, while we have more choice in the private sector over which newspapers we read and which airlines we fly.
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I think this distinction is overstated. In a democracy, if a government creates bad policies, it can be voted out of office. Competition in the private sector, however, can easily work to encourage phishing rather than stifle it.
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One example is the mortgage industry in the early 2000s. Borrowers were encouraged to take out loans that they could not repay when real estate prices fell. Competition did not eliminate this practice, because it was hard for anyone to make money selling the advice “Don’t take that loan.”