“Nudging is everywhere, it surrounds us in everyday life. Even at the supermarket: putting fruit near the till gives us a nudge towards healthy eating.”
Professor Robert Baldwin teaches Regulation and Criminal Law at the London School of Economics and Political Science and over the course of a seminar at LUISS on October 31, 2014 he presented his latest work, published in November 2014 in the Modern Law Review. The study analyzes the use of the nudge, a tool for government influence that means “a subtle push” or “hint,” and is increasingly used in regulation by governments and companies all over the world.
The idea of the nudge is taken from the 2008 book by Richard Thaler and Cass Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness and includes strategies based on behavioral science, used to influence the so-called “architecture of decisions” of individuals. According to economic psychology, in fact, we are subject to a series of errors or biases (that is, cognitive distortions) and emotions that sometimes prevent us from making the best decisions for our well-being, including our economic well-being. It is precisely for this reason, explains Professor Baldwin, “that it is possible to steer people towards better decisions, without forcing them, simply by presenting choices in different ways."
“These strategies,” explains Baldwin, “are a modern alternative to traditional regulation. A number of issues regarding these techniques are still unexplored and a lot of decisions are made without recognizing that different types of nudges produce quite different sorts of issues of a policy as well as an ethical nature.” Referring to the study of Professor Fabiana Di Porto of the University of Salento, presented during the seminar, Professor Baldwin stressed the importance of “distinguishing between nudges that are empowering, that give targeted and selective information, and those that are much more controversial and manipulative, which have to be used with more caution in public policy.”
In this respect, the work of Professor Baldwin distinguishes between three different degrees of nudge, each with distinctive characteristics and effects. The first is that of simple, targeted information, such as the message “Smoking is bad for you” on cigarette packs. The second level involves action by the recipient, such as setting up a smoking area away from the workplace to make it more difficult to smoke. The third level aims at shocking the recipient to discourage a certain habit: this is the case with billboards that show graphic images of the effects of smoking.
Another aspect not to be overlooked, points out Baldwin, is the source of the nudge: “We are constantly subjected to marketing ‘pressures’; there is always someone who wants to sell us something, and people are not even aware of it. Instead, we are less inclined to accept suggestions from governments and public administrations.” The risk is that nudging will become just one of many tools of state control and that it will be perceived by citizens as a loss of liberty. If people are subjected to too many nudges, especially the third-level, more invasive ones, the danger is that people will automatically do the opposite of what is suggested to them.
Because of the effectiveness demonstrated in the experiments of the Cameron and Obama administrations and in other countries such as Denmark, Baldwin believes that “the nudge is destined to become increasingly successful,” in Europe and also in Italy. In our country it could be used, suggests the LSE professor, “to resolve problems of transparency and to raise awareness regarding important decisions more simply and directly. I hope that the way forward is to use nudge to provide not just more information, but more balanced information about the choices they’re making, reducing the transaction cost associated with making sensible decisions.”