What's in a Nudge?
18 Pages Posted: 24 Feb 2017
Date Written: February 23, 2017
Abstract
This Essay is an invited response to Prof. Sunstein’s “Do People Like Nudges?,” a thoughtful survey of public opinion on nudges and their rival policy options. I try to situate the survey in the larger context of Sunstein’s pathbreaking work, and then to reflect on the power and limits of both. I suggest that researchers have come to use the term “nudge” as a shorthand for a wide set of policies, many of which do not meet Thaler & Sunstein’s criterion that nudges be both essentially costless as well as “surprising” from a rational-choice perspective. This definitional confusion produces analytic confusion, as well.
My view, however, is that other researchers are right not to limit themselves to the scope of what Thaler & Sunstein have been inclined to defend. The zero-cost restriction is unnecessary to a convincing defense of regulation, even “paternalistic” regulation. Further, describing some policies as zero cost tends to lead us to neglect opportunity costs or interactions with other policies, as I show with the example of disclosure rules. I therefore close by proposing a more careful analytic taxonomy of modern regulation.
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