89. Behavioral Economics: Nudge Theory

Behavioral Economics is a field that combines insights from psychology and economics to explain why people sometimes make irrational decisions. A key concept within this field is Nudge Theory.

A nudge is any small feature in the environment that alters people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives. Essentially, it guides people toward a better outcome without forcing them.

Examples of Nudges:

Default Options: Automatically enrolling employees into a retirement savings plan (they can opt-out, but many won't), leading to higher savings rates.

Visual Cues: Painting a fly on the urinals in airports to improve aim and reduce cleaning costs (a famous example from Schiphol Airport).

Placement: Placing healthy food items at eye level in a cafeteria to encourage healthier choices.

Question:

Do you think using "nudges" by governments or corporations is an effective and ethical way to encourage positive public behavior (like saving money, recycling, or healthier eating), or do you view it as manipulative?