Communication Nudges and Behavioural Economics

… a core concept used in Implementation and Delivery and Atlas107

Concept description

Leslie Pal (reference below) discusses how policy communication can utilize behavioural economics to nudge people to act in a particular manner.

Pal writes (p. 366-367):

“New findings on human cognitive systems are generally agreeing that there are at least two systems: Thaler and Sunstein use the terms “automatic system” and “reflective system,” similar to the distinctions made by Kahneman (2011) and Haidt (2012). The automatic system is quick and feels instinctive, whereas the reflective system is more self-conscious and calculating. One is about gut feelings and the other, about conscious thought. Sometimes we make important decisions based on our gut feelings, and sometimes we labour with careful calculations.

“What psychology has revealed is that human beings make systematic errors as they reason. For example, we tend to be biased toward the status quo, the present over the future, and we often anchor our perceptions and, hence, decisions on arbitrary facts. This is where the tool of policy communication comes in: Thaler and Sunstein and other “choice architects” often recommend using communications mechanisms that will reduce some of these biases and allow people to make more effective decisions. For example, if people are given the choice of donating when the amounts on offer are $100, $200, and $300, they will tend to donate more than if the choice is $50, $75, or $100. Advertising (as an informational policy tool) is, of course, everywhere, from antidrinking and driving campaigns to the instructions on how to fill out a tax form.

“What Thaler and Sunstein and others have encouraged is thinking about the right design of messages based on psychological principles. As they put it: “If you indirectly influence the choices other people make, you are a choice architect. And since the choices you are influencing are going to be made by Humans, you will want your architecture to reflect a good understanding of how humans behave. In particular, you will want to ensure that the Automatic System doesn’t get all confused” (Thaler & Sunstein, 2008, p. 83). One simple point that they make is that since human beings make errors, there should be feedback mechanisms to let them know something is going wrong (one example is how laptops automatically tell their owners when the battery is low). Other examples are the use of default options (e.g., automatic enrolment in a savings plan, with an option to withdraw), peer pressure (e.g., reducing energy consumption by giving households information about community usage rates), and provision of comparable information (e.g., different types of bank accounts, their features and costs). These are all “nudges” in Thaler and Sunstein’s scheme, but they are communication nudges.”

Atlas topic, subject, and course

Consulting and Communicating on Policy (core topic) in Implementation and Delivery and Atlas107.

Sources

Leslie Pal (2014), Beyond Policy Analysis – Public Issue Management in Turbulent Times, Fifth Edition, Nelson Education, Toronto. See Beyond Policy Analysis – Book Highlights.

Kahneman, D. (2011). Thinking, fast and slow. New York, NY: Farrar, Straus, and Giroux.

Haidt, J. (2012). The righteous mind: Why good people are divided by politics and religion. New York, NY: Pantheon.

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

Page created by: Ian Clark, last modified 8 April 2017.

Image: Nudges.org, at http://nudges.org/tag/behavioral-economics/, accessed 8 April 2017.