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Nudge, Boost, or Design? Limitations of behaviorally informed policy under social interaction

Nudge, Boost, or Design? Limitations of behaviorally informed policy under social interaction
Nudge, Boost, or Design? Limitations of behaviorally informed policy under social interaction
Nudge and boost are two competing approaches to applying the psychology of reasoning and decision making to improve policy. Whereas nudges rely on manipulation of choice architecture to steer people towards better choices, the objective of boosts is to develop good decision-making competences. Proponents of both approaches claim capacity to enhance social welfare through better individual decisions. We suggest that such efforts should involve a more careful analysis of how individual and social welfare are related in the policy context. First, individual rationality is not always sufficient or necessary for improving collective outcomes. Second, collective outcomes of complex social interactions among individuals are largely ignored by the focus of both nudge and boost on individual decisions. We suggest that the design of mechanisms and social norms can sometimes lead to better collective outcomes than nudge and boost, and present conditions under which the three approaches (nudge, boost, and design) can be expected to enhance social welfare.
D04, D71, D78, D91, Z13, boost, mechanism design, nudge, social norm, social welfare
2572-8997
99-105
Reijula, Samuli
cdb1b913-e014-462b-a94c-486c795eb725
Kuorikoski, Jaakko
9a855747-f070-4cbd-87c9-942e0e5d91c8
Ehrig, Timo
77a7989b-f609-411d-aa26-8a162ab3eee8
Katsikopoulos, Konstantinos
b97c23d9-8b24-4225-8da4-be7ac2a14fba
Sunder, Shyam
24773ad2-59cd-4f9b-9a09-46709d466101
Reijula, Samuli
cdb1b913-e014-462b-a94c-486c795eb725
Kuorikoski, Jaakko
9a855747-f070-4cbd-87c9-942e0e5d91c8
Ehrig, Timo
77a7989b-f609-411d-aa26-8a162ab3eee8
Katsikopoulos, Konstantinos
b97c23d9-8b24-4225-8da4-be7ac2a14fba
Sunder, Shyam
24773ad2-59cd-4f9b-9a09-46709d466101

Reijula, Samuli, Kuorikoski, Jaakko, Ehrig, Timo, Katsikopoulos, Konstantinos and Sunder, Shyam (2018) Nudge, Boost, or Design? Limitations of behaviorally informed policy under social interaction. Journal of Behavioral Economics for Policy, 2 (1), 99-105. (doi:10.31235/osf.io/zh3qw).

Record type: Article

Abstract

Nudge and boost are two competing approaches to applying the psychology of reasoning and decision making to improve policy. Whereas nudges rely on manipulation of choice architecture to steer people towards better choices, the objective of boosts is to develop good decision-making competences. Proponents of both approaches claim capacity to enhance social welfare through better individual decisions. We suggest that such efforts should involve a more careful analysis of how individual and social welfare are related in the policy context. First, individual rationality is not always sufficient or necessary for improving collective outcomes. Second, collective outcomes of complex social interactions among individuals are largely ignored by the focus of both nudge and boost on individual decisions. We suggest that the design of mechanisms and social norms can sometimes lead to better collective outcomes than nudge and boost, and present conditions under which the three approaches (nudge, boost, and design) can be expected to enhance social welfare.

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More information

Published date: 20 March 2018
Keywords: D04, D71, D78, D91, Z13, boost, mechanism design, nudge, social norm, social welfare

Identifiers

Local EPrints ID: 445561
URI: http://eprints.soton.ac.uk/id/eprint/445561
ISSN: 2572-8997
PURE UUID: 3ea00958-92d2-4b7c-bfa8-64a9cbfe9549
ORCID for Konstantinos Katsikopoulos: ORCID iD orcid.org/0000-0002-9572-1980

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Date deposited: 16 Dec 2020 17:31
Last modified: 13 Dec 2021 03:21

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Contributors

Author: Samuli Reijula
Author: Jaakko Kuorikoski
Author: Timo Ehrig
Author: Shyam Sunder

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