Rethinking nudge: not one but three concepts

Abstract

Abstract‘Nudge’ is a concept of policy intervention that originates in Thaler and Sunstein's (2008) popular eponymous book. Following their own hints, we distinguish three properties of nudge interventions: they redirect individual choices by only slightly altering choice conditions (here ‘nudge 1’); they use rationality failures instrumentally (here ‘nudge 2’); and they alleviate the unfavourable effects of these failures (here ‘nudge 3’). We explore each property in semantic detail and show that no entailment relation holds between them. This calls into question the theoretical unity of nudge as intended by Thaler and Sunstein and most of their followers. We eventually recommend pursuing each property separately, both in policy research and at the foundational level. We particularly emphasise the need for reconsidering the respective roles of decision theory and behavioural economics to delineate nudge 2 correctly. The paper differs from most in the literature in focusing on the definitional rather than the normative problems of nudge.