The Nudge

What Is The Nudge?

A nudge is any feature of the way choices are presented that predictably steers people's behavior without forbidding options or significantly changing their economic incentives. The idea was popularized by Richard Thaler and Cass Sunstein in their 2008 book Nudge, along with the term libertarian paternalism, the notion that choice environments can be designed to help people while still leaving them free to choose. Setting a helpful default, rearranging how options are ordered, or simplifying information are all nudges. Because people rely on rules of thumb and are influenced by framing and defaults, small changes in how a decision is structured can have large effects on what they choose.

Why It Matters

The nudge idea has had unusually direct influence on public policy. Governments established behavioral units to apply it, redesigning everything from retirement savings enrollment to tax reminders and organ-donation registration by changing defaults rather than mandates. Automatically enrolling workers into pension plans, for example, sharply raises participation while preserving the right to opt out. Supporters argue nudges can improve outcomes cheaply and without coercion; critics question the paternalism involved and who decides which direction to nudge. The approach grew directly out of behavioral economics, and it contributed to Richard Thaler's 2017 economics prize for building psychologically realistic assumptions into the analysis of economic decision-making.