Behavioral economists tout examples of how small changes in the way options are presented can have large effects on the decisions people make. The term “nudging” refers to such “choice architecture” modifications that help, but do not force, people to behave more in line with how they wish they could. To count as a nudge, the behavioral intervention should be easy and inexpensive to disregard. So, for example, putting fruit at eye level is a nudge; banning junk food is not.
Large-scale experiments, both by academics and by governments, have shown that nudging can help people eat better, reduce their energy consumption, or save more for retirement. These are relatively straightforward applications, though. Others raise harder questions about who ultimately benefits, who loses, and by how much. For example, do people like being nudged? Should people like being nudged? All things considered, when does nudging actually make society better off? Does it matter much if people know they are being nudged?
This grant funds a series of experiments by University of Chicago economist John List to examine these and related issues. List’s team has designed two large randomized controlled trials with almost 50,000 subjects in total, one focused on energy conservation and another on food choices. Along with measuring the direct effects of nudges, List will rigorously examine participants’ decisions to opt in or out of being nudged, allowing him to estimate any associated welfare losses experienced by consumers.