Nudge, Boost, or Design? Limitations of Behaviorally Informed Policy Under Social Interaction

Reijula, Samuli; Kuorikoski, Jaako; Ehrig, Timo; Katsikopoulos, Konstantinos V.; Sunder, Shyam

doi:10.2139/ssrn.3736298

Cited by 10 publications

(10 citation statements)

References 20 publications

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“…But can policymakers really assume that everybody wants to save for retirement, for example? In many cases, the assumption of preference homogeneity is questionable and thus undermines a nudge's goal of enhancing welfare (see Reijula et al, 2018).…”

Section: Preference Identificationmentioning

confidence: 99%

Self-nudging and the citizen choice architect

Reijula

Hertwig

2020

Behav. Public Policy

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This article argues that nudges can often be turned into self-nudges: empowering interventions that enable people to design and structure their own decision environments – that is, to act as citizen choice architects. Self-nudging applies insights from behavioral science in a way that is practicable and cost-effective, but that sidesteps concerns about paternalism or manipulation. It has the potential to expand the scope of application of behavioral insights from the public to the personal sphere (e.g., homes, offices, families). It is a tool for reducing failures of self-control and enhancing personal autonomy; specifically, self-nudging can mean designing one's proximate choice architecture to alleviate the effects of self-control problems, engaging in education to understand the nature and causes of self-control problems and employing simple educational nudges to improve goal attainment in various domains. It can even mean self-paternalistic interventions such as winnowing down one's choice set by, for instance, removing options. Policy-makers could promote self-nudging by sharing knowledge about nudges and how they work. The ultimate goal of the self-nudging approach is to enable citizen choice architects’ efficient self-governance, where reasonable, and the self-determined arbitration of conflicts between their mutually exclusive goals and preferences.

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Section: Preference Identificationmentioning

confidence: 99%

Self-nudging and the citizen choice architect

Reijula

Hertwig

2020

Behav. Public Policy

Self Cite

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“…It might be fruitless to attempt to nudge bankers toward being more efficient, without first understanding how they think and what their goals are. This is a known critique in situations of known risks (Reijula et al , 2018; Sugden, 2009), and it applies at least as much in situations of uncertainty, and possibly even more of strategic uncertainty. Nudging trading teams to “slow” thinking and “rational” deliberation might miss the point, if regulators, traders, investment and central bankers do not mutually understand the heuristics each of them use.…”

Section: Discussionmentioning

confidence: 99%

An exploratory study of heuristics for anticipating prices

Ehrig

Katsikopoulos

Jost

et al. 2021

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PurposeThis research explores how investment and central bankers cope with strategic uncertainty when they anticipate prices. The uncertainty originates from others' decisions and their consequences, and cannot be meaningfully reduced to risk. The authors postulate that, in order to cope with this type of uncertainty, bankers use simple rules, also called heuristics. This study aims to identify such heuristics and the psychological processes that underlie them.Design/methodology/approachThe authors interviewed 22 managers of teams tasked to anticipate prices, in two leading investment and central banks. The primary data came from in-depth, semi-structured interviews lasting 30–60 min, supplemented by our observations during the on-site visits, emails and phone calls when preparing the interviews, and reports published by the banks. Data were coded and heuristics were induced over multiple rounds by multiple researchers.FindingsBankers (1) construct simple game representations of markets, (2) make inferences to gauge opponents, (3) become alert when they see too much agreement and (4) communicate coherent narratives. Heuristics (1)–(3) are employed when the pace of decision-making is fast, whereas (4) is used for longer time scales. In sum, bankers exhibit reciprocal bounded rationality, wherein interaction partners are mutually aware of and adapted to the fundamental uncertainty of the task and their limited resources.Originality/valueHeuristics for anticipating prices have not been studied empirically outside the lab. The findings may help integrate conceptualizations of heuristics in the simple-rules and fast-and-frugal-heuristics research programs and improve market efficiency.

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“…We first consider the positive side effects of interventions. Nudging and heuristic boosting can have an impact on both individual and societal welfare (Reijula et al 2018). This holds true for TCI, which focus on consumer outcomes, but may have societal effects.…”

Section: Consequences Of Tcimentioning

confidence: 99%

“…At the same time, they do not fit all settings optimally. To understand the situations in which either intervention might be preferable, conceptual research is required (Gru ¨ne-Yanoff, Marchionni, and Feufel 2018;Reijula et al 2018). Neglecting the constructs' limitations results in a substantial risk of unintended consequences and value co-destruction (Jachimowicz et al 2019;Szaszi et al 2018).…”

Section: Nudgingmentioning

confidence: 99%

Enabling Cocreation With Transformative Interventions: An Interdisciplinary Conceptualization of Consumer Boosting

Bieler

Maas

Fischer

et al. 2021

Journal of Service Research

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Service research emphasizes the relevance of consumers’ participation in the cocreation of transformative outcomes like health and well-being. However, in complex services, consumers’ limited operant resources and lacking resource integration efficiency hinder transformative value cocreation. Service research on mechanisms that facilitate well-being through efficient resource integration is sparse, but several disciplines elaborate cognitive interventions with that target. These interventions have been validated in various contexts. Nevertheless, concerns persist that they can hurt, rather than help, individual consumers. Overcoming such limitations requires an interdisciplinary effort. The present article outlines the new research area “transformative consumer interventions” (TCI) by integrating interventions theory, consumer psychology, and transformative service research in a health context. TCI provide theory-driven principles for the selection and design of interventions that facilitate operant resource integration in complex services. Additionally, we conceptualize consumer boosting, the first TCI-based intervention construct. Consumer boosts are efficient, context-specific, and personalized interventions that enhance individuals’ operant resources. Consumer boosting provides a pathway to transformative cocreation and alleviates the risk of unintended consequences and value co-destruction. This research illustrates that the transformative service domain stands to benefit substantially from getting involved in the discussion on consumer interventions and offers a unique perspective for further conceptual elaboration.

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Nudge, Boost, or Design? Limitations of Behaviorally Informed Policy Under Social Interaction

Cited by 10 publications

References 20 publications

Self-nudging and the citizen choice architect

Self-nudging and the citizen choice architect

An exploratory study of heuristics for anticipating prices

Enabling Cocreation With Transformative Interventions: An Interdisciplinary Conceptualization of Consumer Boosting

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