My L.A. Times Op-Ed: In Defense of the Evidence-Based Nudge

By Michelle Meyer

The op-ed, which will appear in tomorrow’s print edition, is online here. It’s co-authored with Christopher Chabris (who happens to be my husband). Here—where I’m writing only for myself—I thought I’d say a bit about what motivated us and elaborate on a few points whose force may have been blunted by the process of condensing our thougts into our allottted 1,000 words.

The news hook for the article was an August memo leaked to Fox News in which the Obama administration announced that it is looking to hire behavioral scientists to help shape policy. Notwithstanding that the explicit model for this initiative is the U.K.’s “Behavioral Insights Team,” formed in 2010 by Conservative Prime Minister David Cameron, in the U.S., some on the right went completely off the rails about the Obama announcement.

A typical reaction was from Fox News’s Monica Crowley, who described the initiative as “really frightening,” “insane,” “outrageous,” “unconstitutional,” “an Orwellian horror show”—and all of the aforementioned mostly because, so far as I can tell, she believes that nudges constitute a form of “psychological warfare” akin to “what our military does to our enemies.” There are certainly legitimate criticisms of nudges to be made by both the right and the left, but that they are a form of Communist mind control is not among them. (For starters, even if nudges did rely on something like subliminal messages, those messages have been shown to have no effect on consumer behavior, much to the chagrin of marketers.)

The impetus for our piece, then, was to disabuse the Crowleys of the world (or at least that portion of them who are open to persuasion on this matter) of that notion, and then to offer some affirmative reasons why conservatives and libertarians should embrace the nudge (its preservation of all options in the choice set; its ability to incentivize personal responsibility; its efficiency), especially relative to its often perfectly viable alternative: the shove. (To that end, the piece was originally intended for a periodical with a right-of-center audience but wound up in the L.A. Times, where some of it may admittedly amount to preaching to the choir.)

In making our case…

…we tried to avoid overselling nudges, as some others who have defended Obama’s nudge unit have done, including the administration itself. The memo recruiting behavioral scientists says, for instance, that its nudges are designed to “help people to achieve their goals.” But not everything that has been characterized (perhaps wrongly) as a “nudge” aims primarily at helping the nudgee act in her own best interests, as seen by the nudgee’s own—or even the nudger’s—lights. Our example, touted as a nudge by David Brooks, is an opt-out default rule for organ donation. I myself am in favor of organ donation opt-out defaults, but falsely characterizing such defaults as libertarian paternalism can only play into the right’s paranoia about nudges and thereby undermine the whole effort. Better simply to acknowledge that arranging the choice architecture in this way promotes the state’s values, while noting that elections have consequences, and in urging its citizens to act in ways the state deems good, nudges should be preferable to shoves.

Even where a nudge does aim to make it easier for nudgees to act in ways that reflect the nudgee’s own good, as she herself sees it, no nudge policy will in fact have that effect on everyone, since we all have different visions of the good and find ourselves in different circumstances. As I’ve argued elsewhere (in the context of risk-benefit analysis by IRBs), central planners (1) cannot possibly know every individual citizen’s preferences and, in any event, (2) cannot enact a single policy that caters to those preferences, since human beings happily tend to be rather diverse. So it’s disingenuous to pitch nudges as helping everyone achieve their goals; they can’t, and they don’t. But when a central planner has to make some decision—someone, whether it’s the government or your boss, has to set the default for retirement savings plans on behalf of many diverse people, not all of whom, it must be conceded, decline to save out of irrationality—nudges (1) preserve the idiosyncratic citizen’s ability to make a different choice and (2) sensibly set the default to what the government has good reason to believe will serve most people.

We also try to highlight some advantages of nudges that have been given short shrift. For instance, Crowley is apparently alarmed by the fact that the government will be “experimenting” on citizens. (For her, as for so many others, the word “experimentation” seems to conjure images of vivisection, Frankenstein’s monster, and the like.) In our piece, we argue, to the contrary, that regulation is most appropriate only if it has first been tested on citizens in randomized, controlled trials (RCTs). Regulations have costs, and we ought to have some evidence that they will yield benefits that justify those costs. This is true even of nudges: what for the individual citizen is a gentle nudge will often be a very big, very expensive shove for business.

But on this score, nudges are at a considerable advantage over other forms of regulation. One time-honored way of the government incentivizing citizens to do what they want, for instance, is to amend the tax code. Before implementing them across the nation, could the government test proposed changes to the tax code to ensure that they have the intended effects on behavior? Maybe. But dealing with multiple versions of the tax code would be administratively difficult and would likely raise several legal (e.g., equal protection) objections. Because nudges by definition neither mandate nor forbid any choice, nor do they significantly alter the economic incentives to choose among options, they can more easily, ethically, and legally be subject to randomized experiments to test their efficacy. The Obama administration suggests that its Nudge Unit will only implement empirically tested nudges. But, as we discuss, the costly Obamacare rule requiring chain restaurants to display calories counts was not tested in advance, and evidence for its efficacy in reducing caloric intake is inconclusive, at best.

Our take-away, then, is that nudges have the potential to serve ends that people across the ideological spectrum should embrace. At the same time, we critique the administration for a somewhat wavering fidelity to best practices in imposing new regulations. In short, we say that nudges are good, especially compared to the alternatives, but only if they’re done right.

[Cross-posted at The Faculty Lounge]