What is nudge economics

A behavioral economic perspective on the coronavirus: Nudges - Small measures with a big impact #WashYourHands

 

April 1st, 2020, by Ann-Kathrin Crede

In our first two posts on behavioral economics and the corona crisis, we dealt with #StayHome as a contribution to a public good and the psychology of hamster purchases (#VolleRegale). The following article deals with the major effects of small measures and how compliance with them can be promoted.

How politics can influence

If politicians want to influence the behavior of their people, they have various instruments at their disposal. For example, it can issue bans - such as a parking ban in a neighborhood street - and punish non-compliance with a fine. Or it can set positive and negative financial incentives: for example, by subsidizing the replacement of an old oil heating system with a district heating connection, or by charging high taxes on cigarettes. Compared to these classic instruments, the so-called Nudging (= Nudge) a different approach: The idea is to nudge people into “better” decisions by making small changes in the decision architecture (Thaler, Sunstein 2008). For example, cafeteria guests consume more fruit if it is placed at the beginning of the food service instead of at the end. Or customers of an electricity provider tend to choose green electricity if this is already selected by default. The central point is that no rules are given to people, but that they can still make their own decisions. It is also important to recognize that there is no such thing as a neutral decision-making architecture, i.e. people are always nudged in some way. After all, the food in the cafeteria cannot be arranged out of order. Research has shown that nudges can significantly influence behavior and have welfare-enhancing effects. Some governments, for example in Great Britain, have set up so-called nudge units, which advise and help shape economic policy.

In the current crisis, governments are using a variety of instruments to influence the behavior of their people and thus to help contain or slow down the spread of the coronavirus. While for some areas of public life only classic measures such as bans come into question in order to induce certain behavior (this includes the closure of daycare centers, schools and restaurants or bans on events and crowds of more than 5 people), are in other areas such strict measures are neither feasible nor desirable. One such area includes hygiene and behavioral regulations that currently shape everyday life in numerous countries. Nudges can be used there, which help people to implement the “right” behavior more easily and more sustainably (Sunstein 2014).

"This is how we protect ourselves"

The Federal Office of Public Health (BAG) has launched a comprehensive campaign under the motto “This is how we protect ourselves”, which explains the hygiene and behavioral regulations to be complied with with understandable information and attractively designed images and videos. The most important regulations include keeping your distance from other people and washing your hands regularly and thoroughly, which has been shown to reduce the transmission of diseases. Still, studies show that many people don't wash their hands often enough or thoroughly enough. Why is that? Reasons for this could be a lack of knowledge, self-regulation or motivation.

Which nudges can specifically be used to encourage the desired behavior?

  • Social norms: In a controlled field study (also randomized controlled trial called) it has been shown that hand washing by the nudge social norms can be promoted. For example, people washed their hands more frequently in a public toilet if a sign was attached to draw attention to other people's hand-washing behavior (compared to a control group) (Judah et al. 2009). Information about the behavior of others or about the social norm can have a decisive influence on behavior.
  • Simplicity / Ease of Use: To get rid of all pathogens, it is recommended to wash your hands for at least 20 seconds. Instead of counting to 20 in your head, singing Happy Birthday twice, a nudge called a nudge, while washing your hands may help simplicity or user friendliness. Certain behavior can be promoted if it is as easy to implement as possible.
  • memories: To make their customers aware of the applicable regulations, supermarkets show the regulations of the BAG (Nudge memory). It has been shown that certain behaviors can be evoked if people are reminded of them over and over again.
  • Visual aids / warnings: To ensure that customers keep the minimum distance of two meters, supermarkets have put markings on the floor. For example, lines show the two-meter distance (nudge visual aid), Warning signs, however, places where nobody should be (nudge warning). It is known that visually conspicuous notices or warnings can steer behavior in a desired direction.

 

Swell:

Richard H. Thaler, Cass R. Sunstein (2008). Nudge: Improving decisions about health, wealth, and happiness, Yale University Press, New Haven.

Sunstein, C. R. (2014). Nudging: a very short guide. Journal of Consumer Policy, 37 (4), 583-588.

Judah, G., Aunger, R., Schmidt, W. P., Michie, S., Granger, S., & Curtis, V. (2009). Experimental pretesting of hand-washing interventions in a natural setting. American Journal of Public Health, 99 (2), 405-411.

 

Do you have any feedback or questions? Please contact the author directly by email or like / comment / share on LinkedIn.

Back