Essay by Stuart Mills: “Nudging, now more than a decade old as an intervention tool, has become something of a poster child for the behavioral sciences. We know that people don’t always act in their own best interest—sometimes spectacularly so—and nudges have emerged as a noncoercive way to live better in a world shaped by our behavioral foibles.
But with nudging’s maturity, we’ve also begun to understand some of the ways that it falls short. Take, for instance, research by Linda Thunström and her colleagues. They found that “successful” nudges can actually harm subgroups of a population. In their research, spendthrifts (those who spend freely) spent less when nudged, bringing them closer to optimal spending. But when given the same nudge, tightwads also spent less, taking them further from the optimal.
While a nudge might appear effective because a population benefited on average, at the individual level the story could be different. Should nudging penalize people that differ from the average just because, on the whole, a policy would benefit the population? Though individual versus population trade-offs are part and parcel to policymaking, as our ability to personalize advances, through technology and data, these trade-offs seem less and less appealing….(More)”.