The Amazing World of 'Nudging'

When I was five years old, my mother used to give me a glass of milk every day. I hated drinking it. My mother knew that I liked sweet things so she would show me a spoonful of sugar and then put it in the milk saying "finish the milk and you can get the sugar". I would hurriedly drink the milk to be rewarded with sugar and I still remember it tasted really nice. 

Little did I know that mum was using some advanced techniques in Behavioural Economics and Marketing. I say advanced because in 2017 the Nobel prize for Economics was given to Richard Thaler, a professor at the Colombia University, for his work in behavioural economics around a concept called 'nudging'. Nudging refers to subtle changes in the environment allowing people to take decisions in their larger self interest. The key thing here is that people are not forced to take a certain decision; rather the choice sets are designed to 'nudge' them towards the best decision.

Now a child may need to be nudged but why adults, you may ask? Surely adults can think rationally and take the right decision. That is until you see images of garbage thrown across streets, people texting while driving, and obesity being declared an epidemic.

I don't mean to say that people doing such actions are evil. The problem is that good-natured human beings do things which may not be in the best of interest of the society or themselves. For example people (including me sometimes) who leave the tap running while brushing their teeth don't really mean to destroy fresh water reserves, or those who heat up the kettle twice in the morning for a single cup of coffee don't really mean to waste energy.

https://www.pinterest.co.uk/pin/134122895135706690/

Question is then why do human beings do such things? The issue lies in our way of decision making. We do not always think through all the consequences of our actions and typically rely on the short sighted method of decisions (this is the subject of another post).

This is where Prof Thaler's concept of 'nudging' comes in. It can help correct our decisions and help us do the right thing. Some images below show how litter was reduced on the streets of Denmark by 45%, people were encouraged to take

https://www.cleaneuropenetwork.eu/es/blog/nudging-from-denmark-with-love/agf/

the stairs instead of elevator, smaller cans of soft drinks containing less calories were preferred etc. 

But the most fascinating example of nudging was helping low income families save more money.
Through a field study done with construction workers in India, experimenters applied the 'partition effect' and changed the way wages were paid out. Published in the Journal of Marketing and Research, Dilip Soman and Amar Cheema write that in a controlled experiment, workers were paid their weekly wages in four envelopes instead of lump sum.

The important thing here is that their incomes did not change, only the way money was paid was different. Objective was to see whether the poorest of the poor, people with meagre incomes, could be nudged towards saving money. The results were incredible. Partitioning significantly increased workers' savings. 

I recently applied nudging on myself. I was concerned about the amount of time I was spending in sifting through news feeds on Facebook and other sites. I didn't want to delete my Facebook account as it still had value for me in social connections, but I felt that the main issue was having access to it via mobile. I had formed the habit of using it anywhere, anytime. I therefore decided to remove the Facebook app from my mobile but continued using it on my laptop or desktop. This fixed the issue because the PCs don't have the same ease of access as a mobile and the extra bit of effort creates an automatic barrier.

I think nudging has tremendous potential in improving our lives. We can get really creative in using this concept, and easily nudge our way towards a better future.