In practice, a “nudge” has come to mean:
An intervention that gently steers individuals towards a desired action.
In the words of Richard Thaler and Cass Sunstein, authors of the influential 2008 book Nudge:
“A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting fruit at eye level counts as a nudge. Banning junk food does not.”
| That’s a Nudge | Not a Nudge |
| 1) Home energy reports that tell you how much energy you use compared to your neighbors. | 1) Adding a tax or financial penalty on excessive household energy use. |
| 2) Asking citizens to make a plan to vote, asking when, where, and how they will get to their polling station. | 2) Making voting mandatory. |
| 3) Auto enrollment in your company retirement plan using payroll deduction. | 3) A campaign for employee awareness of retirement savings options. |
Why Use Nudges In Your Organization?
Every organization attempts to shape the behavior of its constituents. Think about your employee handbooks (rules & mandates), annual bonuses (financial incentives), or signage around your campus (awareness campaigns). Each is designed with the goal of influencing your choices in a particular way.
“Nudge Units” within government agencies have proven that simple nudges can reduce law violations without using heavy handed penalties. When applied thoughtfully, nudges can be more effective than mandates, financial incentives, or awareness campaigns alone.
It’s often possible to put Nudges to the test. Quantifiable results from A/B testing can uncover surprising quick-wins and improved performance in your programs. Nudges are also generally popular, because they maintain freedom of choice and are low-cost interventions by design.
Additional Reading:
Nudging: A Very Short Guide – Cass R. Sunstein provides a brief overview of concepts. Starting on P.3 Sunstein lists “Ten Important Nudges” which are a great jumping off point for discussions about testing nudges in your organization.
Nudge (book) – Nudge: Improving Decisions about Health, Wealth, and Happiness – published in 2008 by University of Chicago economist Richard H. Thaler and Harvard Law School Professor Cass R. Sunstein.
Thinking, Fast and Slow (book) – published in 2011 by Nobel Memorial Prize in Economic Sciences laureate Daniel Kahneman.
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