Nudge theory is a concept in behavioral economics and psychology that proposes subtle interventions to influence people’s behavior without restricting their choices. The idea is to “nudge” individuals toward making decisions that are in their best interest or align with certain societal goals by altering the environment in which decisions are made. This could be as simple as changing the placement of items in a cafeteria to encourage healthier eating choices or adjusting the default options in a retirement savings plan to increase contributions.
The theory was popularized by Richard Thaler and Cass Sunstein in their 2008 book Nudge: Improving Decisions About Health, Wealth, and Happiness. Thaler, who won the Nobel Prize in Economic Sciences in 2017, argued that by understanding how people think and make decisions, small changes can lead to significant improvements in outcomes.
Nudges are generally meant to be non-coercive and maintain freedom of choice, which distinguishes them from mandates or bans. Critics, however, sometimes argue that nudging can be manipulative or paternalistic, depending on how it’s implemented.
