National Economic Panel

 


 

ESA National Economic Panel Polls


 

About

Polls

Panellists

Got an Idea?

Behavioural economics - September 2016

Part 1: "Behavioural economics provides new and useful insights into individual behaviour."

Part 2: "It is unethical for governments to use behavioural economics to "nudge" citizens."

Overview of poll results by Professor Lionel Page

In 2016, both the most recent Presidents of the American Economic Association are behavioural economists, and in the USA, UK and now Australia, governments are looking to harness insights from behavioural economics when designing policies. The result of this poll reflects this evolution.


Responses (66)


 

Peter Abelson

PART 1 - Uncertain (neither agree nor disagree)

8

It depends. Some nudging (advertising) is highly appropriate (tobacco consumption, drugs, gambling etc) but nudging like advertising can be abused by governments, sometimes badly so.


 

PART 1 - Uncertain (neither agree nor disagree)

8

It depends. Some nudging (advertising) is highly appropriate (tobacco consumption, drugs, gambling etc) but nudging like advertising can be abused by governments, sometimes badly so.


 

Gary Banks

PART 1 - Disagree

8

Compared to government not acting? Or compared to using other instruments in pursuit of a policy objective? If the latter, nudging  may be no worse ethically than commanding or bribing, for example, and may well be better.


 

PART 2 - Disagree

8

Compared to government not acting? Or compared to using other instruments in pursuit of a policy objective? If the latter, nudging  may be no worse ethically than commanding or bribing, for example, and may well be better.


 

Garry Barrett

PART 1 - Strongly disagree

9


 

PART 2 - Strongly disagree

9


 

Harry Bloch

PART 1 - Disagree

7

No clear difference between nudging and using taxes or subsidies to influence behaviour.


 

PART 2 - Disagree

7

No clear difference between nudging and using taxes or subsidies to influence behaviour.


 

Jeff Borland

PART 1 - Strongly disagree

10

Just another way for governments to work out how to design policy to achieve social objectives taking into account how people will respond to those policies - so no different than, for example, using the idea that people respond to incentives.


 

PART 2 - Strongly disagree

10

Just another way for governments to work out how to design policy to achieve social objectives taking into account how people will respond to those policies - so no different than, for example, using the idea that people respond to incentives.


 

David Butler

PART 1 - Disagree

8

There is always a context for a decision, choice architecture can't be avoided, so why not choose a useful one. Consumers are already being nudged by business in how choices are framed and products marketed, quite possibly to their detriment, they just may not realise it. A nudge in the other direction could perhaps level the playing field.


 

PART 2 - Disagree

8

There is always a context for a decision, choice architecture can't be avoided, so why not choose a useful one. Consumers are already being nudged by business in how choices are framed and products marketed, quite possibly to their detriment, they just may not realise it. A nudge in the other direction could perhaps level the playing field.


 

Matthew Butlin

PART 1 - Agree

6

I am OK about nudging providing governments explain to the electorate what they are doing and why. My answer changes significantly to oppose nudging if the manipulation is either covert and/or the policy matter is ethically dubious.


 

PART 2 - Agree

6

I am OK about nudging providing governments explain to the electorate what they are doing and why. My answer changes significantly to oppose nudging if the manipulation is either covert and/or the policy matter is ethically dubious.


 

Lisa Cameron

PART 1 - Strongly disagree

8

As long as governments use "nudges" for socially beneficial purposes e.g. increasing tax payments, I see no ethical problem. A recent experimental paper showed that nudges can be effective even when people know they are being "nudged". Hence, there need be no subterfuge. A larger question is how effective nudges are in the long term. It is likely that the population will in time become inured to being nudged in the same way, hence the need for continual innovation in the nudging messages.


 

PART 2 - Strongly disagree

8

As long as governments use "nudges" for socially beneficial purposes e.g. increasing tax payments, I see no ethical problem. A recent experimental paper showed that nudges can be effective even when people know they are being "nudged". Hence, there need be no subterfuge. A larger question is how effective nudges are in the long term. It is likely that the population will in time become inured to being nudged in the same way, hence the need for continual innovation in the nudging messages.


 

Fabrizio Carmignani

PART 1 - Disagree

8

Behavioural economics is a tool, so the only relevant question is whether this tool is used to improve social welfare or not. In this sense, the use of behavioural economics is not ethical or unethical in absolute sense.


 

PART 2 - Disagree

8

Behavioural economics is a tool, so the only relevant question is whether this tool is used to improve social welfare or not. In this sense, the use of behavioural economics is not ethical or unethical in absolute sense.


 

Deborah Cobb-Clark2

PART 1 - Strongly disagree

10


 

PART 2 - Strongly disagree

10


 

Max Corden

PART 1 - Disagree

6


 

PART 2 - Disagree

6


 

Kevin Davis

PART 1 - Strongly disagree

10


 

PART 2 - Strongly disagree

10


 

Brian Dollery

PART 1 - Strongly disagree

9


 

PART 2 - Strongly disagree 

9


 

Uwe Dulleck

PART 1 - Strongly disagree

10

No question, we do not want a Department/Ministry of Truth (ala Orwell's 1984) but a) any choices that government presents to its people will come with one form of choice architecture or another, using behavioural insights just says, we should use scientific approach to design these choices; b) is where the economists come in, at least in the spirit of Thaler and Sunstein, Nudge is about presenting choices to people in a different way, i.e. it is not about ruling out options, it is about helping people to make better decisions for themselves and society; c) this is where Economists come in 'Nudge' in my eyes is that we identify decisions that are likely not rational or unintended by the individual and help them to make better decisions. As an example if a superannuation system does provide "free money" to people that sign up (opt-in), and only 50% do so, I feel we can be certain that this is due to a bias, an changing the system to an opt-out instead of an opt-in as a nudge, is simply not unethical. There may be cases where more oversight is needed, but where we stand at the moment, not helping people to make better decisions for themselves and their families when we know that they (and we all) fall victims to cognitive biases that are part of our nature is in my eyes unethical.


 

PART 2 - Strongly disagree

10

No question, we do not want a Department/Ministry of Truth (ala Orwell's 1984) but a) any choices that government presents to its people will come with one form of choice architecture or another, using behavioural insights just says, we should use scientific approach to design these choices; b) is where the economists come in, at least in the spirit of Thaler and Sunstein, Nudge is about presenting choices to people in a different way, i.e. it is not about ruling out options, it is about helping people to make better decisions for themselves and society; c) this is where Economists come in 'Nudge' in my eyes is that we identify decisions that are likely not rational or unintended by the individual and help them to make better decisions. As an example if a superannuation system does provide "free money" to people that sign up (opt-in), and only 50% do so, I feel we can be certain that this is due to a bias, an changing the system to an opt-out instead of an opt-in as a nudge, is simply not unethical. There may be cases where more oversight is needed, but where we stand at the moment, not helping people to make better decisions for themselves and their families when we know that they (and we all) fall victims to cognitive biases that are part of our nature is in my eyes unethical.


 

Chris Edmond

PART 1 - Disagree

8


 

PART 2 - Disagree

8


 

Saul Eslake

PART 1 - Agree

9


 

PART 2 - Agree

9


 

Gigi Foster

PART 1 - Strongly disagree

9

Let's get real: governments "nudge" people all the time, intentionally and unintentionally (though usually the latter). The "extra nudging" that may result from an active attempt on the part of some sub-group of policy-makers to encourage people to make (slightly different) decisions (slightly differently) will, in any modern democracy like Australia, be overwhelmed by the multi-dimensional chaos of phenomena that characterises the interaction of citizens with government-influenced constraints. Even if there were a meaningful effect, if the government's objective is to increase aggregate welfare, I see no ethical dilemma:  it is the government's job to maximise social welfare, so one could argue that not using proven insights to design better policy would be negligent of the government, and hence unethical. Would it be possible for a governmental official to attempt to "use" behavioural economics to lower aggregate welfare?  Yes, and that attempt, even if unsuccessful, would arguably be unethical, but then we are mainly talking about corruption - not behavioural economics-guided nudging. (I am assuming throughout that we are speaking of reasonably well-proven and robust insights, not merely conjectures on which the health of the realm should not be bet.)


 

PART 2 - Strongly disagree

9

Let's get real: governments "nudge" people all the time, intentionally and unintentionally (though usually the latter). The "extra nudging" that may result from an active attempt on the part of some sub-group of policy-makers to encourage people to make (slightly different) decisions (slightly differently) will, in any modern democracy like Australia, be overwhelmed by the multi-dimensional chaos of phenomena that characterises the interaction of citizens with government-influenced constraints. Even if there were a meaningful effect, if the government's objective is to increase aggregate welfare, I see no ethical dilemma:  it is the government's job to maximise social welfare, so one could argue that not using proven insights to design better policy would be negligent of the government, and hence unethical. Would it be possible for a governmental official to attempt to "use" behavioural economics to lower aggregate welfare?  Yes, and that attempt, even if unsuccessful, would arguably be unethical, but then we are mainly talking about corruption - not behavioural economics-guided nudging. (I am assuming throughout that we are speaking of reasonably well-proven and robust insights, not merely conjectures on which the health of the realm should not be bet.)


 

john freebairn

PART 1 - Disagree

8

For example, to promote availability of organ transplants, a nudge would say default is to allow rather than the alternative option of requiring a positive family request


 

PART 2 - Disagree

8

For example, to promote availability of organ transplants, a nudge would say default is to allow rather than the alternative option of requiring a positive family request


 

Paul Frijters

PART 1 - Strongly disagree

9

"Nudge" is just another term for marketing: non-invasive forms of getting people to do something by using psychological tricks. The problem with it is not that it is unethical (you would have to outlaw all forms of marketing then!), but rather that the vast majority of policy cannot be voluntary and 'nudge' is just not all that useful: taxes, education, health, police, environment, etc., are not organised via mere suggestions to the public! "Nudge" is thus a temporary distraction from the much bigger change in economics, a term that gives some people a foot into the policy door by pretending they can solve big problems by non-invasive means. One should see "nudge" as behavioural economists muscling into the space previously occupied by marketeers. They are eyeing much more territory than that though!


 

PART 2 - Strongly disagree

9

"Nudge" is just another term for marketing: non-invasive forms of getting people to do something by using psychological tricks. The problem with it is not that it is unethical (you would have to outlaw all forms of marketing then!), but rather that the vast majority of policy cannot be voluntary and 'nudge' is just not all that useful: taxes, education, health, police, environment, etc., are not organised via mere suggestions to the public! "Nudge" is thus a temporary distraction from the much bigger change in economics, a term that gives some people a foot into the policy door by pretending they can solve big problems by non-invasive means. One should see "nudge" as behavioural economists muscling into the space previously occupied by marketeers. They are eyeing much more territory than that though!


 

Lata Gangadharan

PART 1 - Disagree

9


 

PART 2 - Disagree

9


 

Stephen King

PART 1 - Strongly disagree

9

Of course, this is a moral question, so my view and confidence reflects my moral views. 'Nudging' (or 'soft paternalism' or 'libertarian paternalism') policies would have no effect for 'rational' individuals who face no costs of decision making. But for the rest of us, a nudge (such as changing the default on organ transplants) can significantly change behaviour for those who don't care 'enough'. So we get improved social outcomes while people who really care can still make the same decision regardless of the policy.


 

PART 2 - Strongly disagree

9

Of course, this is a moral question, so my view and confidence reflects my moral views. 'Nudging' (or 'soft paternalism' or 'libertarian paternalism') policies would have no effect for 'rational' individuals who face no costs of decision making. But for the rest of us, a nudge (such as changing the default on organ transplants) can significantly change behaviour for those who don't care 'enough'. So we get improved social outcomes while people who really care can still make the same decision regardless of the policy.


 

Geoffrey Kingston

PART 1 - Agree

6

Again in the subfield of retirement economics, there are emerging signs of misuse of nudge economics. For example, the push by the Australian authorities to nudge retirees into deferred annuities is at odds with the interests of people hitting retirement with modest super but without their own home. Such people need to go into retirement on the Age Pension and as home owners, to avoid missing out on the strongly preferential treatment of home owners by the means tests. They are better off financing late retirement via the Age Pension rather than a deferred annuity.


 

PART 2 - Agree

6

Again in the subfield of retirement economics, there are emerging signs of misuse of nudge economics. For example, the push by the Australian authorities to nudge retirees into deferred annuities is at odds with the interests of people hitting retirement with modest super but without their own home. Such people need to go into retirement on the Age Pension and as home owners, to avoid missing out on the strongly preferential treatment of home owners by the means tests. They are better off financing late retirement via the Age Pension rather than a deferred annuity.


 

Michael KNOX

PART 1 - Disagree

8

A "Nudge " may merely simplify  choices and enable clients to understand the options available within public programs.


 

PART 2 - Disagree

8

A "Nudge " may merely simplify  choices and enable clients to understand the options available within public programs.


 

Rodney Maddock

PART 1 - Agree

8

Governments should not pick up results from behavioural economics and use them without understanding the ethical positions implicit in the underlying economics. Economics has a set of values embedded in it - the Pareto concept is the most obvious example. We also basically ignore the consequences of Arrow's Impossibility Theorem and focus on long term outcomes at the expense of transitional costs. The insights from our work should be used with care and due consideration of the underlying values used to generate the results. That said, governments are elected to make decisions, many trying to change behaviour, and are perfectly entitled to do so.


 

PART 2 - Agree

8

Governments should not pick up results from behavioural economics and use them without understanding the ethical positions implicit in the underlying economics. Economics has a set of values embedded in it - the Pareto concept is the most obvious example. We also basically ignore the consequences of Arrow's Impossibility Theorem and focus on long term outcomes at the expense of transitional costs. The insights from our work should be used with care and due consideration of the underlying values used to generate the results. That said, governments are elected to make decisions, many trying to change behaviour, and are perfectly entitled to do so.


 

Tony Makin

PART 1 - Uncertain (neither agree nor disagree)

5


 

PART 2 - Uncertain (neither agree nor disagree)

5


 

Douglas McTaggart

PART 1 - Disagree

7

The use of incentive structures to bring about specific outcomes is a common practice. If they are more nuanced because of a deeper behavioural understanding then there will be fewer unintended consequences. However, are we that good?


 

PART 2 - Disagree

7

The use of incentive structures to bring about specific outcomes is a common practice. If they are more nuanced because of a deeper behavioural understanding then there will be fewer unintended consequences. However, are we that good?


 

Flavio Menezes

PART 1 - Disagree

9

The incentives embedded in the taxation and transfer system, and in many other government policies, already influences behaviour in intended (and often unintended) ways. We already face incentives, both financial and non-financial, in many economic and non-economic interactions. In this sense, citizens have always been ‘nudged’ by government policy. While one may argued that behaviour economics ‘nudging’ is different because the government may be using biases in decision making to pursue its policy goals, it is not clear to me that this is any different from governments using financial incentives to achieve particular goals ignoring (or being unaware of)  potential individual decision making biases.


 

PART 2 - Disagree

9

The incentives embedded in the taxation and transfer system, and in many other government policies, already influences behaviour in intended (and often unintended) ways. We already face incentives, both financial and non-financial, in many economic and non-economic interactions. In this sense, citizens have always been ‘nudged’ by government policy. While one may argued that behaviour economics ‘nudging’ is different because the government may be using biases in decision making to pursue its policy goals, it is not clear to me that this is any different from governments using financial incentives to achieve particular goals ignoring (or being unaware of)  potential individual decision making biases.


 

James Morley

PART 1 - Disagree

8


 

PART 2 - Disagree

8


 

Margaret Nowak

PART 1 - Disagree

6


 

PART 2 - Disagree

6


 

John Quiggin

PART 1 - Disagree

7

There are a wide range of possible 'nudges'. Some seem obviously justified to me, such as setting the default option in choices of various kinds to be the one most likely to be beneficial to the chooser. On the other hand, making it difficult for people to implement their preferred choice is problematic.


 

PART 2 - Disagree

7

There are a wide range of possible 'nudges'. Some seem obviously justified to me, such as setting the default option in choices of various kinds to be the one most likely to be beneficial to the chooser. On the other hand, making it difficult for people to implement their preferred choice is problematic.


 

Jeffrey Sheen

PART 1 - Disagree

7

In general, this is unlikely to be true.


 

PART 2 - Disagree

7

In general, this is unlikely to be true.


 

Hugh Sibly

PART 1 - Strongly disagree

9

To be classed as a "nudge", a policy must not alter the set of choices open to people. So it could be argued that the responsibility for a given choice,  and its ethical consequences, remain with the individual. To the extent that a nudge changes behaviour in a way that in beyond conscious control (for example placing good/bad food at eye level in shops) or provides some forms of information (for example  setting defaults on superannuation contributions), presumably it is the ethical standard of the  policy rather than the use of a nudge which  determines whether it is  ethical. Indeed, in the examples just cited, any action taken could be classified as a nudge, so 'nudging in these contexts' is unavoidable.


 

PART 2 - Strongly disagree

9

To be classed as a "nudge", a policy must not alter the set of choices open to people. So it could be argued that the responsibility for a given choice,  and its ethical consequences, remain with the individual. To the extent that a nudge changes behaviour in a way that in beyond conscious control (for example placing good/bad food at eye level in shops) or provides some forms of information (for example  setting defaults on superannuation contributions), presumably it is the ethical standard of the  policy rather than the use of a nudge which  determines whether it is  ethical. Indeed, in the examples just cited, any action taken could be classified as a nudge, so 'nudging in these contexts' is unavoidable.


 

Joaquin Vespignani

PART 1 - Uncertain (neither agree nor disagree)

6


 

PART 2 - Uncertain (neither agree nor disagree)

6