Nudging: How to Get People to Do the Right Thing

If companies offered just as many choices but went through the trouble of carefully devising a very good single default plan that requires no action, most people would succumb to inertia and go with it. This seems to have been the result in Sweden when that country revamped its retirement plans.

Consideration of the appropriate-choice architecture might very well help with the drafting of health care legislation. Structuring the immensely complex system is an extraordinarily difficult job that requires not only a free market (the mother of all nudges) but also a wise choice of extra-market incentives. In their book, Thaler and Sunstein consider a number of related problems.

Should the pricing of insurance policies be structured so that people who partially give up their right to sue because of negligence pay less for health care? What about inducements to lose weight, go to a gym, et cetera? Are there nudges that might increase organ donations?

Intelligent Nudging Vs. Stupid Fudging

Despite its appeal, providing nudges and sometimes even tricking people into doing the right thing, even when it's clear what "right" is, makes me very uncomfortable.

I've come to accept the necessity of this, however, because such tricks have been used for so long by more than a few politicians, advertisers, credit card companies, health insurers, lobbyists and others to tempt people into doing what is, by almost any reasonable standard, the wrong thing.

In fact, special interests often go beyond mere nudges into distracting spin, tendentious framing of issues and even bald-faced lies. It's telling, for example, that frightening talk about trillion-dollar health care reform and phony death panels rarely seemed to arise about the trillion-dollar Iraq War and the real deaths to which it did lead.

It's a sad fact that rhetoric convinces far more people than does logic. Given that it does, intelligent nudging, as long as it doesn't degenerate into stupid fudging, is to be cautiously welcomed.

John Allen Paulos, a professor of mathematics at Temple University in Philadelphia, is the author of the best-sellers, "Innumeracy" and "A Mathematician Reads the Newspaper," as well as (just out in paperback) "Irreligion: A Mathematician Explains Why the Arguments for God Just Don't Add Up." His "Who's Counting?" column on ABCNews.com appears the first weekend of every month.

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