1.2.4.1. The United States

In 2009, the Obama Administration appointed Cass Sunstein (President Obama’s friend and former colleague from the University of Chicago Law School) as the head of the Office of Information and Regulatory Affairs (OIRA). OIRA was established in 1980 and is, among other roles, responsible for reviewing the writing of regulations as well as developing and overseeing their implementation. Sunstein used his knowledge of behavioral and social sciences – particularly of nudging – to improve the effectiveness of policies. Sunstein worked with several national agencies to write rules that are clear and generate a consensus based on facts and evidence. The book Simpler [SUN 13] describes his experience during the four years he served in the Obama Administration and his vision of regulation based on a realistic, informed view (rather than a fanciful conception) on how people behave, to reduce complexity and increase effectiveness. Recognizing the benefits of this process, in 2015 President Obama established the White House Social and Behavioral Sciences Team and signed an executive order to make federal government agencies apply behavioral science insights to improve the effectiveness of their policies and to benefit the people.

1.2.4.2. The United Kingdom

In 2010, David Cameron established the Behavioural Insights Team (unofficially known as the Nudge Unit) led by David Halpern, which has been promoting initiatives related to public health, energy, financial fraud, and charitable contributions. “Since its formation, it has successfully designed several interventions” and, in 2012, it was estimated that the Nudge Unit would save over GBP 300 million in the next five years [BEH 11]. The Behavioural Insights Team is now independent of the UK government and works in partnership with local authorities, businesses, charities and governments in 31 countries. Areas of intervention cover a broad range, including education, equality, health, wellbeing, energy, environmentalism and sustainability [BEH 18].

1.2.4.3. The European Union

The European Union has also used behavioral insights in policy initiatives. The European Commission first used such insights to inform policymaking back in 2009 when it acknowledged the impact of default options. It approved a Directive on Consumer Rights that included a clause to limit the use of default options in consumer contracts. Thereafter, behavioral insights have been explored in several policy fields and, in 2014, the European Commission created the Foresight and Behavioural Insights Unit within its Joint Research Centre [LOU 16]. Several countries in the European Union, such as the Netherlands and Germany, have also developed and implemented national policy initiatives based on behavioral insights.

1.2.4.4. The Organization for Economic Co-operation and Development

The Organization for Economic Co-operation and Development (OECD) also highlights how behavioral economics can be applied to regulatory policy across the world. In 2014, the OECD classified this understanding as critical for businesses and governments, presented the description of several successful behaviorally-informed policies, and urged their broader dissemination [PET 14].

1.2.4.5. The World Bank

In 2015, the World Bank addressed the need to understand human behavior and apply that understanding to economic development, early childhood development, household finance, productivity, health and climate change [WOR 15]. The World Bank pursues better solutions in policymaking to achieve development, particularly for those who are in regions of extreme poverty. Understanding the context of the regions is considered critical for successful interventions for behavioral change.

1.2.4.6. The United Arab Emirates

In 2016, the United Arab Emirates (UAE) appointed a Minister of State for Happiness and Wellbeing who supervised plans, programs and policies to achieve a happier society. The responsibility of this office is to align and drive government policy to create social good and satisfaction². The program consists of five pillars: the science of happiness and positivity, mindfulness, leading a happy team, happiness and policies in government work, and measuring happiness. The minister’s goal is to make the country among the top five happiest in the world by 2021 by harmonizing all government plans, programs and policies. In 2019, as per the United Nations World Happiness Report, the UAE ranked 21st among 157 countries. Interestingly, one factor that influences the classification is the freedom to make life choices, in which the UAE was ranked fourth.

1.2.4.7. Other initiatives worldwide

Nudging has also gained increased relevance among companies and micro-initiatives that, based on individual insight, generate behavioral change toward healthier, wealthier, or more sustainable choices. Companies and governments are widely taking advantage of behavioral science. Those designing nudging interventions can draw on apparently trivial clues and characteristics of the environment, which people are often not aware of. By adjusting the social context, emotions, mental shortcuts and automatic responses jointly with small stimuli, nudges can keep people on a better path. Protecting individuals from themselves and others, while maintaining freedom of choice, is a puzzle that introduces new challenges and ethical concerns.

1.3.1.1. Heuristics-based nudging

Heuristics-based nudging acts mainly in automatic S1 for fast, everyday decisions where people rely on rules of thumb. Interventions to promote behavioral change can be designed to trigger or cease specific heuristics. It optimizes fast thinking and unconscious behavior.

1.3.1.2. Information-based nudging

Information-based nudging acts throughout conscious S2, creating awareness and encouraging reflexive thinking for better choices and behavior. It promotes information, learning and rational thinking in the decision-making process, to form true preferences.

Behavioral change and nudging initiatives can use both types of behavioral insights, despite their different nature.

1.3.2.1. Simplification

Simplification is always the first step in the decision-making process. If you want to make someone do something, make it simple and easy. The message or action should be short and focused on improving efficiency.

Simplification heuristics are generally used due to constraints of cognitive resources, attention, processing capacity, and memory [HIR 01]. Individuals often ignore information and create intentional selective barriers to focus only on some relevant features of the decision process [GOL 99].

Nudging initiatives based on simplification must be easy but reliable. For instance, Newell and Siikamäki [NEW 14] demonstrate that simple information, such as on energy efficiency labels, is the most important element pointing to cost-efficient energy investments. Even when there are several relevant elements, individuals tend to use an aggregator indicator to make their decisions. For example, energy companies often provide indicators of energy consumption to encourage better usage. To be effective, information should be simple and the recommended action should also be easy to follow.

1.3.2.2. Environment or context

Slight changes in the environment may have a significant impact on the final choice. Tversky and Kahneman [TVE 74] claim that availability is an important heuristic for determining choice. People do not have access to the same information to the same degree and the more accessible the information, the more frequently it is considered. Collecting information occurs mostly at the unconscious level. However, decisions on how to use information with different levels of accessibility are made at the conscious level [GOL 99]. Depending on how important a decision is and how much a person wants to avoid bias and error, an individual will decide whether to access layers of information stored at less accessible levels. In this way, the term cognitive availability arises to refer to the information that is potentially accessible to the individual, but not currently available [TVE 73].

The information available currently defines the decision environment. Small changes in the disclosed information may encourage better behavior. This knowledge can be used in several areas to highlight features in order to improve consumer behavior, such as environmentally sensitive production practices, nonanimal testing, or sustainability consciousness.

1.3.2.3. Framing and salience

When deciding on options, the choice architecture frames the features an individual should pay attention to, or make salient, and those an individual should disregard. This is another form of simplification that was identified by Kahneman and Tversky [KAH 79] as the isolation effect. According to this, in order to simplify alternatives, people often ignore the characteristics that the alternatives share and decide by comparing the components that differentiate them. This form of choice can produce inconsistent preferences because a pair of possibilities can be decomposed into common or different characteristics in many ways, and different decompositions may lead to different preferences; therefore, framing is critical in driving preference.

Tversky and Kahneman [TVE 86] present a paradigmatic example of how framing and salience may influence decision-making. In an experiment³, patients with lung cancer were presented with two different frames of the same treatment options. In one group, patients received a “survival frame” and were told that through surgical treatment, of 100 people, 90 individuals who had the surgery lived through the post-operative period, 68 were alive at the end of the first year, and 34 were alive at the end of five years; alternatively, through radiation therapy, of 100 people, 77 were alive at the end of one year and 22 were alive at the end of five years. Patients in the second group received the same figures in a “mortality frame” and were told that through surgical treatment, of 100 people, 10 died (instead of saying that 90 were alive) during surgery or within the post-operative period, 32 died by the end of the first year and 66 died by the end of five years; however, through radiation therapy, of 100 people, none died during treatment, 23 died by the end of one year, and 78 died by the end of five years. The seemingly inconsequential difference in the presentation of the procedures produced a marked effect. The preference for radiation therapy was 18% in the survival frame and 44% in the mortality frame. The same effect was also identified with physicians and business students. The terminology is critical: while the survival frame is centered in hope, the mortality frame is centered in fear. People in both cases receive the same information and should logically show the same preferences, despite the wording. This violates the principle of invariance because different representations of the same choice problem produced different preferences and it can easily be used in nudging interventions by simply choosing the wording carefully.

1.3.2.4. Defaults: automatic enrolment and presumed consent policies

People are frequently passive and tend to maintain the status quo, particularly when a decision is difficult and produces permanent or lasting results. The psychological phenomenon known as conservatism or status quo was identified by Edwards [EDW 68]. Conservatism or the status quo is observed in many decision problems in which individuals demonstrate a predisposition to what has already been established. The status quo can result from a decision, delaying a decision, or simply the inability to decide – also referred to as decision paralysis. The theory of choice under conflict by Tversky and Shafir [TVE 92] argues that the decision to postpone action or to take no action becomes more frequent when several attractive options exist. An individual is more likely to delay a decision or search for new alternatives when the conflict between alternatives is high because the alternatives are difficult to contrast (for instance, one alternative may have simultaneously more advantages but also more disadvantages when compared to the alternative options). The more alternatives there are to consider, the more difficult it will be to rank choice preferences, and the longer a decision is delayed, the more likely a person is to continue to hesitate, therefore maintaining the status quo.

Defaults work well for passive individuals who struggle to make a decision. Using defaults as the status quo makes people adhere simply because they do not need to take any action. Automatic enrolment works well for retirement planning, automatic saving planning, immediate bill charging or credit card payment. By the same order of ideas, presumed consent removes the burden of the decision. Organ donation is one example of presumed consent that does not require any action and also yields substantial results.

Despite the benefits of defaults, many people defend the importance of active decision-making because it ensures that they will be responsible for their choices. For instance, the banning of pre-ticked boxes on websites tends to become the rule. In 2009, the European Union Directive on Consumer Rights prohibited pre-ticking for charging extra payments. Additionally, in 2019, the Court of Justice of the European Union determined that active consent is required for a website to store cookies on user devices. A pre-ticked box, that users can actively deselect to opt-out, is not considered a valid form of consent; instead, affirmative (opt-in) consent is required. However, in general, active consent is often obtained in a routine and distracted way by ticking a box on a form. It is a slightly different way to drive the same result, where there is tenuous involvement of the individual. Personal data protection policies require active consent, and although ticking a box on a form is considered active consent, it does not genuinely engage the individual. It assumes awareness but is mainly based on presumed trust and routine clicking (namely, the unread rules of data protection).

1.3.2.5. Reminders and deadlines

Reminders, gentle reminders and deadlines create urgency for action. Digital nudging often uses these strategies and helps people accomplish their tasks and obligations on time.

Government institutions and corporations actively use reminders and deadlines to nudge people. Taxpayers receive recurrent reminders about tax payment deadlines and information on simple steps to complete their taxes, such as pre-completed tax declarations, bank transfer codes and automatic debit (or credit) payments from their bank account. Likewise, Gmail users are nudged in several ways. By default, Gmail accounts have a nudge option activated to remind users to reply to important emails (as classified by the Gmail account) and follow up on emails sent for which no response was received (again, Gmail classifies emails to which a response would be desirable). It uses artificial intelligence to scan and identify which emails should come to the top of the inbox. Being nudged can be helpful but also annoying if it occurs too frequently. If users prefer, they can manage their nudges by turning off the nudge feature and using the snooze feature to create a custom reminder; alternatively, both options can be used. Additional productivity tools offered by Gmail include “Smart Reply” and “Smart Compose”. When reading an email, Gmail suggests an answer that is just one click away (this is not offered with every email as Gmail needs some context to generate a reply). Such features drive people’s actions and sometimes cause users to feel guilty if they do not act in accordance. And, guilt avoidance is a strong incentive for action.

1.3.2.6. Social norms

Emphasizing what most people do is a strong cue to make others engage in the same desirable behavior. Highlighting positive behavior, recognizing accepted social norms and cultural dynamics may influence people’s actions accordingly. Educators know that reinforcing good behavior is far more effective than calling attention to and correcting bad behavior. Policymakers use this insight frequently and are often criticized for creating a nanny state. Nevertheless, the results may justify the intervention.

The Behavioural Insights Team in the UK proved to be very efficient when it informed taxpayers that 9 out of 10 people in their area had already paid their taxes. The more personal and focused on their residential area the message, the more effective the nudge proved to be. Moreover, positively reinforcing taxpayers’ good behavior could eventually also be used as a cue. It has not been tested, but one could argue that if the government added a sentence stating that a taxpayer was one of the 9 out of 10 who paid their taxes on time, their motivation to continue to comply would increase.

Banks use this kind of message to help improve payment time, and companies use this idea with bill recurrent payments. For instance, when sending a bill letter, a company could reinforce that other customers pay on time or that the customer always paid on time. It can also be very effective to reinforce good behavior in areas such as recycling, energy-saving, and reducing plastic use. Demonstrating that others have sustainable behaviors encourages individuals to develop these same behaviors.

1.3.2.7. Information: generate awareness and empower people for better decision-making

Generating awareness to help people make informed decisions is much more powerful than using soft persuasion by turning on or off some heuristics. People who make active decisions and commit to sustainable behavior generate real and lasting behavior changes.

Educational campaigns can be very effective. Financial literacy campaigns and programs have been used to promote financial knowledge and help people improve their financial decisions. They facilitate responsible and sustainable financial behavior and give people confidence in making financial choices, engaging in long-term financial planning and saving and investing. It is always better for individuals to feel in control of their choices instead of feeling that a policy designed their choices for them.

Individuals may avoid judgment bias and consequent decision errors as they learn from their own mistakes. Learning by experience enhances decision-making if individuals receive disclosure, proper information and feedback. In the long run, educated people taking control of their own decisions eliminate ethical concerns about excessive intervention in policy design. Behavioral change based on information and disclosure generates conscious, diverse behavior based on participation and true active choice.

1.3.2.8. Self-nudging and self-regulation

People often realize that they are biased or make poor decisions and seek mechanisms to overcome these shortcomings. In general, people want to save more, be more conscious of their consumption and be more productive at work.

Individuals can use self-nudging to regulate their behavior when they recognize systematic self-control failures. Examining the larger picture, enhancing education and data-driven decisions, planning for the long run, and defining rules a priori increases individual autonomy to create an environment architecture that encourages better choices. Individual self-nudging may be self-motivated or promoted by policymakers through education, information disclosure and programs.

To save more and invest better, individuals can set up automatic savings plans by defining an amount to save monthly or saving with a pension scheme. Planning a priori for the long-term, and considering tax efficiency, is a key feature for success in saving and investing. Individuals can also nudge themselves to control consumption by paying off credit cards in full each month (avoiding high penalty interest rates of 20–30%) and can avoid overconsumption by reducing credit card debt. For more sustainable consumption choices, it is possible to subscribe and receive local, seasonal and organic fresh food boxes (for example, weekly boxes catered to household size) or to subscribe for recurrent supply needs. Individuals stay on track to make better choices when they are in control of defining simpler choices or suitable defaults.

Individuals can likewise define a priori rules to reduce temptation. For instance, to develop self-discipline in deep work, people can use apps that reduce distraction, such as access to social media or recreational websites. Many free apps set rules of productivity a priori, such as blocking certain websites completely or at specific dates and times (e.g. from Monday to Friday, from 9 a.m. to 5 p.m., no more than 30 minutes per day). Once set, some apps require the user to wait up to 24 hours before changing the settings. Obviously, it is possible to get around these limits, but the goal of self-nudging is not to block access but to filter negative impulses, improve self-regulation and facilitate self-determination.

1.3.2.9. Reducing sludge

Nudging can also come in the form of reducing sludging, that is, eliminating the barriers that make otherwise good decisions difficult. Nudging and sludging are the good and evil sides, respectively, to the architecture of choice and use the same behavioral insights.

Legislation has been issued to reduce the risk of misleading information and enhance the consistency and comparability of the information provided. However, the same behavioral insights that are used in nudging can also be used to make judgments based on disadvantage. In March 2020, during the coronavirus disease (COVID-19) pandemic, some UK patients with life-limiting conditions (such as heart disease, cystic fibrosis, terminal cancer and neurological conditions) received letters from their local doctors requesting them to complete “do not resuscitate” forms in case they contracted COVID-19 and their health deteriorated. They were also advised not to call emergency services if they had symptoms or contracted COVID-19 and were urged to leave scarce health resources such as ventilators and hospital services to care for younger and fitter patients who are more likely to survive. The National Health Service apologized after a viral reaction on social media called the letter cruel and criticized the idea that some lives are not worth saving. This is just one example of how sludging uses the same insights as nudging. In this case, local doctors facilitated certain behaviors in an attempt to establish a social norm that favored others’ interests over the individual’s self-interest. While nudging can be pro-society, it must primarily be pro-individual.