{"id":15740,"date":"2020-10-03T08:10:55","date_gmt":"2020-10-03T12:10:55","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=15740"},"modified":"2020-10-13T18:10:03","modified_gmt":"2020-10-13T22:10:03","slug":"nudge-decision-making","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/nudge-decision-making\/","title":{"rendered":"Nudge Decision Making: Setting Up Meaningful Choice"},"content":{"rendered":"\n<p>What is <em>Nudge<\/em> <a href=\"https:\/\/www.shortform.com\/blog\/integrative-decision-making\/\">decision making<\/a>? How does it work and how can it help people <a href=\"https:\/\/www.shortform.com\/blog\/make-better-decisions\/\">make better decisions<\/a>?<\/p>\n\n\n\n<p><em>Nudge<\/em> helps people <a href=\"https:\/\/www.shortform.com\/blog\/making-better-decisions-2\/\">make good choices<\/a>. You gently push them towards better options, benefitting that person and those around them. <\/p>\n\n\n\n<p>Read more about <em>Nudge<\/em>, decision making, and more.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\">What Is Nudge Decision Making?<\/h2>\n\n\n\n<p><a href=\"https:\/\/www.shortform.com\/blog\/libertarian-paternalism\/\">Libertarian paternalism<\/a> seeks to direct individuals to the choices they would otherwise make themselves without constraining their ability to choose. <em>Nudge <\/em>decision making is about guiding, not forcing.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Addressing Conflicts<\/strong><\/h3>\n\n\n\n<p><strong>Better choice architecture can also help in school systems where <a href=\"https:\/\/www.shortform.com\/blog\/what-is-information-asymmetry\/\">asymmetrical information<\/a> can create conflicting incentives\u2014for example, where advantaged parents can game the system to the detriment of disadvantaged parents<\/strong>.<\/p>\n\n\n\n<p>A \u201cschool choice\u201d alternative to a voucher program is \u201ccontrolled choice,\u201d a system wherein students have priority at a local school or a school a sibling attends but can apply anywhere. Boston, for example, from 1988 through the early 2000s, employed an algorithm to try to accommodate students\u2019 first-choice schools while giving students priority at their local schools.&nbsp;<\/p>\n\n\n\n<p>The problem with the Boston system is that, once you intuit (or simply know) the algorithm, you can work it in your favor. For example, say your first choice is your local school. If you understand the algorithm, you know that you have priority at your local school, so you would never list it as a first choice (because you wouldn\u2019t need the \u201cpriority boost\u201d of listing it first); by the same token, if your first choice was a distant, high-demand school, you would never list it second, because then you\u2019d lose out to both the local students <em>and <\/em>the students listing it first.<\/p>\n\n\n\n<p>Better educated and more affluent parents were able to recognize the rules of the game sooner, relegating students with less-educated or lower-income parents to less desirable schools. It wasn\u2019t until a team of Harvard economists pointed out these flaws and suggested a strategy-proof mechanism that Boston reformed its system.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Better Incentives<\/strong><\/h3>\n\n\n\n<p><strong>The best mechanism for harnessing the power of <a href=\"https:\/\/www.shortform.com\/blog\/what-are-economic-incentives\/\">market incentives<\/a> to reduce environmental damage is so-called \u201ccap-and-trade.\u201d<\/strong><\/p>\n\n\n\n<p>In a cap-and-trade system, the government sets a ceiling on a certain pollutant\u2014say, atmospheric carbon\u2014and confers on industries and firms \u201crights\u201d to pollute up to that amount (the \u201ccap\u201d). If a firm chooses to reduce its emissions, it can trade its \u201cright to pollute\u201d to another company for cash. <strong>This system conforms to libertarian paternalism because it preserves choice while \u201cnudging\u201d firms\u2014through economic incentives\u2014to clean up their operations<\/strong>.<\/p>\n\n\n\n<p><strong>A cap-and-trade system has been enormously effective in curbing acid rain<\/strong>. In 1990, George H.W. Bush amended the Clean Air Act to allow companies to (1) pollute in certain amounts and (2) trade those allowances in a market. With a clear economic <a href=\"https:\/\/www.shortform.com\/blog\/what-is-incentive-meaning-and-definition-economics\/\">incentive<\/a> in place\u2014cash for less pollution\u2014companies began reforming their operations on their own, to reduce emissions and reap the benefits of cleared-out cap space. The program has resulted in benefits of between $12 billion and $78 billion, amounts which include a reduction of 10,000 premature deaths and over 14,500 cases of chronic bronchitis.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is Nudge decision making? How does it work and how can it help people make better decisions? Nudge helps people make good choices. You gently push them towards better options, benefitting that person and those around them. Read more about Nudge, decision making, and more.<\/p>\n","protected":false},"author":6,"featured_media":15932,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,9,24],"tags":[132],"class_list":["post-15740","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management","category-psychology","category-society","tag-nudge","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Nudge Decision Making: Setting Up Meaningful Choice - Shortform Books<\/title>\n<meta name=\"description\" content=\"What is nudge decision making? Nudging is when people make restricted choices with policies in place. 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