• bsmswebsite

The Nudge Theory

Ever felt like you were not in control of your own choices or that you were influenced in your purchases? No? Well, that’s because Nudging works really well! In the field of behavioral economics, the term “nudging” refers to predictable methods of changing people’s behavior by modifying the choice context, without them being completely aware of it.

A nudge changes the presentation of choices in a way that makes people more likely to pick the option that benefits them. An example could be positioning healthier foods on shelves that are at eye-level, so as to decrease the possibility of making an effort to reach the highest ones which contain junk food.

It’s a process of choice architecture: changes in the environment can make a substantial difference in influencing behavior.

Nudges as an alternative to restrictions

Nudges are a valid alternative to restrictions and regulations, particularly in the field of public health. Throughout the world, societies face major challenges and massive governmental spending in the public health sector; most of these challenges could be largely preventable by reducing exposure to four main risk factors—tobacco smoking, unhealthful diet, physical inactivity, and excessive alcohol consumption.

All of these risks have one thing in common: they are closely associated with the consequences of modifiable individual-level behaviors, where people fail to perform rationally in their own declared self-interests. This is where nudges can play the fundamental role of redirecting the choices of consumption of tobacco and alcohol consumers, but also succeed in modifying unhealthy habits that traditional regulations failed to amend.

Nudges in Marketing

Our preferences can often be determined by our emotional states and it’s possible to leverage on these subconscious drivers to promote behaviors that are beneficial to enterprises by making the marketing more effective. In marketing, nudges allow us to make one choice unconsciously easier to select compared to an alternative path.

When the display of a store or a website looks familiar, easy to browse, and simple, customers will be more likely to purchase, since their brains perceive that environment as convenient to carry out their errands and satisfy their needs. Simplicity is key, and neuroscience studies proved this: when we are presented with an exaggerated variety of choices, we feel paralyzed. The vast range of options ​cripples users' decision-making, thus decreasing the feasibility of purchase.

Constructing a Nudge

Now the question is, how do we construct a nudge? The first step we have to undertake is mapping the context: it is pivotal to understand what kind of decision-making processes are involved in the phenomenon we are investigating and which are the incentives and motivations associated with that particular behavior. Then, we move onto the heart of the problem, deciding which nudge to apply by identifying the suitable ones. Finally, we will analyze the possible constraints and obstacles to the implementations of nudges and test the ones we think are the most appropriate. Nudges are characterized by an experimental nature and therefore require a trial phase in order to identify possible flows and carry out adjustments.

Final Remarks

Nudging is a powerful tool that has to be applied cautiously and following principles of fairness and transparency, avoiding misleading behaviors and manipulation. Nudges are policy instruments extensively used by lawmakers and organizations to impact our daily lives positively, but they’re also manipulation strategies exploited by private companies to increase sales by maneuvering our emotions and mental states.

Regulation on the application of such schemes might help to ensure the safety and lawfulness of their integration, as well as safeguarding the population from the potential threats they would be exposed to.

Written by: Benedetta Bove

Edited by: Nicola Curci

77 views0 comments