Nudge theory is a concept in behavioral economics, decision making, behavioral policy, social psychology, consumer behavior, and related behavioral sciences that proposes adaptive designs of the decision environment (choice architecture) as ways to influence the behavior and decision-making of groups or individuals. Nudging contrasts with other ways to achieve compliance, such as education, legislation or enforcement.
The nudge concept was popularized in the 2008 book Nudge: Improving Decisions About Health, Wealth, and Happiness, by behavioral economist Richard Thaler and legal scholar Cass Sunstein, two American scholars at the University of Chicago. It has influenced British and American politicians. Several nudge units exist around the world at the national level (UK, Germany, Japan, and others) as well as at the international level (e.g. World Bank, UN, and the European Commission). There is ongoing debate over whether "nudge theory" is a recent novel development in behavioral economics or merely a new term for one of many methods for influencing behavior.
The effectiveness of nudges is controversial. Maier et al. wrote that, after correcting the publication bias found by Mertens et al. (2021), there is no evidence that nudging has any effect.
"Nudging" is an umbrella term referring to many techniques. Skeptics believe some nudges (e.g. default effect) can be highly effective while others have little to no effect. They call for studies that focus on moderators and shift away from investigating average effects. A meta-analysis of all unpublished nudging studies carried by nudge units with over 23 million individuals in the United Kingdom and United States found effectiveness in some nudges, but with substantially weaker effects than published studies indicate. Moreover, some researchers criticized the "one-nudge-for-all" approach and advocated for more studies, with a more robust and consistent evidence base. Implementations of personalized nudging (based on individual differences) appear to be more effective.
Nudges Definition The first formulation of the term nudge and associated principles was developed in cybernetics by James Wilk before 1995 and described by Brunel University academic D. J. Stewart as "the art of the nudge" (sometimes referred to as micronudges). It also drew on methodological influences from clinical psychotherapy tracing back to Gregory Bateson, including contributions from Milton Erickson, Watzlawick, Weakland and Fisch, and Bill O'Hanlon. In this variant, a nudge is a microtargeted design geared toward a specific group of people, irrespective of the scale of intended intervention.
In 2008, Richard Thaler and Cass Sunstein's book Nudge: Improving Decisions About Health, Wealth, and Happiness brought nudge theory to prominence. The authors refer to the influencing of behaviour without coercion as libertarian paternalism and the influencers as choice architects.
Thaler and Sunstein defined their concept as the following:
In this form, drawing on behavioral economics, the nudge is more generally applied in order to influence behaviour. One of the most frequently cited examples of a nudge is the etching of the image of a housefly into the men's room urinals at Amsterdam's Schiphol Airport, which is intended to "improve the aim".
The book gained a following among US and UK politicians, as well as in the private sector and in public health.See: Dr. Jennifer Lunt and Malcolm Staves
Overview A nudge attempts to make it more likely that an individual will make a particular choice, or behave in a particular way, by altering the environment so that automatic cognitive processes are triggered to favour the desired outcome.
An individual's behaviour is not always in alignment with their intentions (a discrepancy known as a value-action gap). It is common knowledge that humans are not fully rational beings; that is, people will often do something that is not in their own self-interest, even when they are aware that their actions are not in their best interest. As an example, when hungry, people who diet often underestimate their ability to lose weight, and their intentions to eat healthy can be temporarily weakened until they are satiated.
Nobel Laureate Daniel Kahneman describes two distinct systems for processing information as to why people sometimes act against their own self-interest: System 1 is fast, automatic, and highly susceptible to environmental influences; System 2 processing is slow, reflective, and takes into account explicit goals and intentions. When situations are overly complex or overwhelming for an individual's cognitive capacity, or when an individual is faced with time-constraints or other pressures, System 1 processing takes over decision-making. System 1 processing relies on various judgmental heuristics to make decisions, resulting in faster decisions. Unfortunately, this can also lead to suboptimal decisions. In fact, Thaler and Sunstein trace maladaptive behaviour to situations in which System 1 processing overrides an individual's explicit values and goals. It is well documented that habitual behaviour is resistant to change without a disruption to the environmental cues that trigger that behaviour.
Nudging techniques aim to use judgmental heuristics to the advantage of the party that is creating the set of choices. In other words, a nudge alters the environment so that when heuristic, or System 1, decision-making is used, the resulting choice will be the most positive or desired outcome. An example of such a nudge is switching the placement of junk food in a store, so that fruit and other healthy options are located next to the cash register, while junk food is relocated to another part of the store.
Techniques Nudges are small changes in the environment that are easy and inexpensive to implement. In head-to-head comparisons, randomized experiments have found that nudges can sometimes motivate behavior change more effectively than paying people. Several different techniques exist for nudging, including defaults, social-proof heuristics, and increasing the salience of the desired option.
A default option is the option that a person automatically receives for doing nothing. People are more likely to choose a particular option if it is the default option. For example, Pichert and Katsikopoulos (2008) found that a greater number of consumers chose the renewable energy option for electricity when it was offered as the default option. Similarly, the default options given to mobile apps developers in advertising networks can significantly impact consumers' privacy.
A social-proof heuristic refers to the tendency of people to look at the behavior of others to help guide their own behavior. Studies have found some success in using social-proof heuristics to nudge people to make healthier food choices.
When people's attention is drawn toward a particular option, that option will become more salient and they will be more likely to choose it. As an example, in snack shops at train stations in the Netherlands, consumers purchased more fruit and healthy snack options when they were relocated next to the cash register. Since then, other similar studies have been made regarding the placement of healthier food options close to the checkout counter and the effect on the consuming behavior of the customers, and this is now considered an effective and well-accepted nudge.
Application Behavioral insights and nudges are currently used in many countries around the world.
Government
There are various notable examples of government applications of nudge theory.
During their terms, both U.K. Prime Minister David Cameron and U.S. President Barack Obama may have sought to employ nudge theory to advance domestic policy goals in their respective countries. In 2009, Cass Sunstein, who helped develop the theory, was appointed as administrator of the Office of Information and Regulatory Affairs. In 2010, the British Behavioural Insights Team, or "Nudge Unit," was established at the British Cabinet Office and headed by psychologist David Halpern.
In Australia, the state Government of New South Wales established a Nudge Unit of its own in 2012. In 2016, the federal government followed suit, forming the Behavioural Economics Team of Australia (BETA) as the "central unit for applying behavioural insights...to public policy."
In 2016, Canada decided to copy the British Behavioural Insights Team, creating the Innovation Hub within the Privy Council (i.e. within the Prime Minister's office), and later changed the name to the Impact and Innovation Unit. During the covid crisis, the IIU played a major role in convincing people to behave according to government dictates. "Tasked to advise the Public Health Agency of Canada on securing vaccination compliance, the IIU applied behavioural-science research and extensive message-testing to craft a national communications strategy, according to the Justice Centre for Constitutional Freedoms."Nigel Hannaford (2025) Manufacturing Consent: Government behavioural engineering of Canadians
In 2020, the British government of Boris Johnson decided to rely on nudge theory to fight the coronavirus pandemic, with Chief Scientific Adviser Patrick Vallance seeking to encourage "herd immunity" with this strategy.
Business Nudge theory has also been applied to business management and corporate culture.
For instance, nudge is applied to health, safety, and environment (HSE) with the primary goals of achieving a "zero accident culture." The concept is also used as a key component in a lot of human-resources software.
Particular forerunners in the application of nudge theory in corporate settings are top Silicon Valley companies. These companies are using nudges in various forms to increase productivity and happiness of employees. Recently, more companies are gaining interest in using what is called "nudge management" to improve the productivity of their white-collar workers.
Healthcare Nudge theory has also been used in different ways in healthcare. For example, researchers have tested different nudges to encourage people to get vaccinated. People have also used nudges to help healthcare professionals make more deliberate decisions, such as improving hand hygiene among healthcare workers to decrease the number of healthcare-associated infections. It has also been used as a way to make fluid administration a more thought-out decision in intensive care units, with the intention of reducing well-known complications of fluid overload.
Mandatory display of inspector reports of eatery hygiene as a public 'nudge', have received mixed responses in different countries. A recent meta-analytic review of the hygiene ratings across North America, Europe, Asia, and Oceania has shown that inspector ratings (usually a smiley or a letter grade) is useful at times, but not informative enough for consumers.
Fundraising Nudge theory can also be applied to fundraising, helping to increase donor contributions and increase continuous donations from the same individual, as well as to entice new donors to give.Behavioural Insights Team. 2013 May 24. "Applying behavioural insights to charitable giving." London: Cabinet Office and Charities Aid Foundation. pp. 1-25.