The goal of this project is to introduce the Behavioral Economic tool “Nudging,” which, given the right conditions, can be used to optimize and guide people’s decision making. The first section outlines Nudge theory, which has the goal of using psychology to identify and change human behavior, especially in economic models. The next section describes how it accomplishes this goal by introducing the core concepts and providing solid examples of nudge theory in action, specifically using the epitomes nudge itself. This is followed by an outline of general situations in which nudging is beneficial, harmful, or outclassed by other methods. The final section addresses any loose ends that could not be addressed in the previous three papers, or otherwise interesting topics that may have come up.
The most commonly sited example of a nudge in practice is the famous Amsterdam Airport Urinal experiment. In the early 1990s, the cleaning manager at the Schiphol Airport placed a small sticker of a fly near the drain of the urinals, with the intention being to encourage patrons to aim for it when using the facility. This small, indirect change resulted in an 8 percent reduction in total bathroom cleaning cost at the airport, as reported by Aad Kieboom, the facility manager. Why did this work? The answer is that it played on one of modern behavioral economics most core concepts: Dual processing.
When you have a hammer, everything begins to look like a nail. However, there is never a tool that is just right for every job, and this holds true for nudging. There is a time and a place to utilize nudge theory and its methods. Generally, nudge theory works as intended for small, specific issues that can be applied easily to systems. For the most part, nudging can be effective by working with minutia. If a situation has elements of the six axioms of choice architecture, it is likely that nudging can make an impact. It begins to falter as issues become more nebulous, when issues become large, such as climate change.
Plan was essentially a full time job, and I remember working hard every day. The goal of my Plan is to give the reader a skill, not just inform them. It provides clear instruction that can be lifted directly and applied to every day life, even if they are not in the field of behavioral economics. I hope to go to graduate school for public administration, where these real world and human-centric ideas can be applied to very non-human systems.
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