SCHOOL OF COMMUNICATION

SEMESTER 1, ACADEMIC SESSION

2020/2021 UNIVERSITI SAINS

MALAYSIA

YSP 502
CONSUMER PSYCHOLOGY

INDIVIDUAL ASSIGNMENT:

YOU’VE BEEN NUDGED!

PREPARED BY:

DHARSHINI A/P GANGATHARAN

SKOM0043/19

PREPARED FOR:

ASSOC. PROF. DR. SHUHAIDA MD. NOOR

What Does Nudge Theory Say?

Nudge is a concept in behavioral economics, political theory, and behavioral sciences which

proposes positive reinforcement and indirect suggestions as ways to influence the behavior
and decision making of groups or individuals. Nudging contrasts with other ways to achieve
compliance, such as education, legislation or enforcement.

A nudge makes it more likely that an individual will make a particular choice, or behave in a
particular way, by altering the environment so that automatic cognitive processes are
triggered to favour the desired outcome.

An individual's behaviour is not always in alignment with their intentions. It is common

knowledge that humans are not fully rational beings; that is, people will often do something
that is not in their own self-interest, even when they are aware that their actions are not in
their best interest. As an example, when hungry, people who diet often underestimate their
ability to lose weight, and their intentions to eat healthy can be temporarily weakened until
they are satiated.

Nudging techniques aim to use judgmental heuristics to the advantage of the party creating
the set of choices. In other words, a nudge alters the environment so that when heuristic,
decision-making is used, the resulting choice will be the most positive or desired outcome.
An example of such a nudge is switching the placement of junk food in a store, so that fruit
and other healthy options are located next to the cash register, while junk food is relocated
to another part of the store.
What Are the Pros and Cons and Criticisms?

Nudging has received a lot of attention with its promises of a cheap, discrete, unrestricted
alternative to rules, warnings, restrictions and other negative courses of action. Nudging
claims to be able to change people’s behaviour simply by changing their surroundings. But
have you also heard about the criticism the method has attracted?

While almost everyone agrees that the method is an appealing thought, not everyone agrees
that nudging has the potential moreover theorists and politicians alike criticizes nudging for
its childish ways, for instance, and many voice concern about nudging manipulating our
freedom of choice.

A Moralizing Nanny

Nudging is being criticized for being moralizing and arrogant. Like an unwanted “nanny”.
Making you the judge of what are good and bad behavior is highly unattractive to several
critics. And nudging can be moralizing, agrees. As with many other methods that is applied
to changing our behavior. must be very explicit about her goals and purpose and about
which nudges that are being set into motion. It's easy to imagine that an organization could
face a media storm, if inappropriate, unclear or non-communicated nudges gets “revealed”.

But if nudging is done right, it is always done for our (the customers, the citizens) own good
with our knowing and in order to compensate for our irrational behavior that far too often
prohibit us from making the choices that, objectively speaking, are best for us.

This is a critique you often meet in the British media and articles, perhaps because England
is far along in implementation of nudging. For instance, the government has developed what
is commonly referred to as a “nudge unit”.
What Are the Different Of Nudges in Marketing?

Nudges are small changes in environment that are easy and inexpensive to implement.
Several different techniques exist for nudging, including defaults, social proof heuristics, and
increasing the salience of the desired option. A default option is the option an individual
automatically receives if he or she does nothing. People are more likely to choose a
particular option if it is the default option. For example that a greater number of consumers
chose the renewable energy option for electricity when it was offered as the default option. A
social proof heuristic refers to the tendency for individuals to look at the behavior of other
people to help guide their own behavior. Studies have found some success in using social
proof heuristics to nudge individuals to make healthier food choice. When an individual's
attention is drawn towards a particular option that option will become more salient to the
individual, and he or she will be more likely to choose to that option. Since then, other similar
studies have been made regarding the placement of healthier food options close to the
checkout counter and the effect on the consuming behavior of the customers and this is now
consider and effective and well accepted nudge

How Do They Work To Influence Behavior

Make it fun
if you want people to display certain behaviour, make sure that the corresponding
activity is fun to do. The Fun Theory campaign from Volkswagen is a beautiful
example of the power of this approach. In one of their videos, people are encouraged
to take the stairs by making walking on the steps a fun experience. The steps
resemble piano keys and walking one these steps actually lets you ‘play’ piano-like
sounds.

Make it easy
if you can make a task easier, you will increase the chance that people will complete
it. You can do this by removing or reducing friction or by making the task easier. For
example, a medicine prescription ‘take one pill after breakfast’ is much easier to
remember and maintain than the neutral instruction ‘once a day’.

Slow down the process

Of course, if you can make it easier to behave in a positive way, you can also make it
harder to behave in a ‘bad’ way. Adding friction can sometimes help to nudge people
into making better decisions. For example, if you want to discourage people to eat
unhealthy food, you can simply give them smaller spoons or plates so they can only
eat small portions of the bad stuff. You can also place the unhealthy snacks far away
from their tables so they have to walk to get it.

Utilise senses
our senses have a great influence on our subconscious mind. By utilising senses
using odour, colour, flavour, sounds, texture etc. we can influence the behaviour of
users. A McDonald’s restaurant in Glasgow used classical music in their restaurants
to ‘scare off’ loitering teens. The Dutch transport organisation smell to reach their
goal. The people spread the smell of lemons to give the impression of a freshly
cleaned station, making travellers feel more at ease.

Give feedback
By giving people feedback on their behaviour, you keep them engaged and you help
them stay aware of their actions. An example of this technique is a pedestrian traffic-
light that visually shows when the light will turn green again, thus making it more
likely that people will wait. Other well-known examples are the thumbs up or down
and the sad/happy emoticons that give drivers feedback about their speeding.

Visualise the end-result

Most people don’t think about the consequences of their actions. When you visualise
the result of the choices people make, you will break the automatic pilot. This will
make people aware of their choices. Most western toilets have two buttons, one for a
large and for a small flush. Although these buttons usually have different sizes,
people will still often push the heavy flush unnecessary.
Dedicate a Section to Discuss the Ethical Issues in Nudging

Nudging using behaviourally-informed measures to influence behavior has proven to be an

effective tool in government for encouraging residents to pay parking tickets, save money,
and bring blighted properties up to code. Nudging manipulates people’s choice architecture,
the physical, social, and psychological context that influences decision making to promote
preferred decisions. For example, one popular nudge involves changing the layout of
grocery stores to make healthy foods more prominent, driving customers to buy and eat
more healthily. The practice has become a regular feature in many cities’ data-driven
initiatives, leveraging information gathered in randomized control trials to create evidence-
based policies.

Its cost effectiveness is undeniable most nudges are simple, cost little to implement, and can
produce huge savings. However, some object to nudging on entirely different grounds,
arguing that while effective, manipulating residents using behavioral science is unethical, or
at the very least should remain outside the realm of government activity.

However, universally favouring or opposing nudging both miss the point. Rather, just as with
any other reform, some nudges are ethical and others are not: it is the content of a nudge,
its goals, and level of transparency that determine whether or not it is ethical. While common
objections to nudging appeal to citizen autonomy and concerns with government’s proper
role in residents’ lives, nudging does not necessarily violate autonomy or overextend
government any more than a law does. For example, is a calorie or sugar notice on a menu
more or less objectionable than a law that taxes sugar?   Specific nudges may be overly
coercive, but this reflects on those nudges only, not on behavioral prods as a whole.
Furthermore, in some situations, it may be unethical not to nudge, as behaviourally-informed
policy can fulfil democratic governments’ responsibility to reform ineffective laws and
represent the wishes of the people.
Conclusion

Nudge theory was originally developed for behavioral economics. Behavioral economics'
refers to the interaction between society and economic systems, notably, pensions,
investing, and healthcare. Nudge theory is adaptable and applicable very widely beyond
'behavioral economics' to all aspects of engaging with people. The use and teaching of
Nudge theory should be underpinned by a positive ethical philosophy, are designing free
choices for people, to enable better thinking and decisions, for the well-being of those
people, society and the planet rather than enforced influence of people for the enrichment of
corporations and wealthy/powerful folk who lead and own them, or for the consolidation of
authority, and then protection/reinforcement of governing people.

However in certain situations these 'heuristics' often cause people to make irrational
unhelpful decisions. Also, in the modern world, societies and the wider environment are
increasingly open to exploitation and abuse by corporations and governments, which
increases humankind's vulnerability to mistaken actions/decisions borne of heuristic thinking.
Nudge theory proposes that these heuristic tendencies can be approached deliberately to
enable helpful thinking and decisions and that this is a more effective way of shifting group
behaviour than by traditional enforcement, instruction, threat, laws, policies, etc. Where
these natural human heuristic tendencies are not understood, or are Governments
traditionally seek to correct such behaviours by direct instruction, enforcement, threat,
punishment and this typically fails, or makes matters worse.
Reference

https://selecthealth.org/wellness-resources/-/media/46BF7C0F45DF4284BF55EA041F7D8E96.ashx

https://www.businessballs.com/improving-workplace-performance/nudge-theory/

https://lederindsigt.dk/en/themes/sales-marketing-and-communication/the-pros-and-cons-of-
nudging

https://hatrabbits.com/en/nudge-techniques/

https://blog.crobox.com/article/nudge-marketing
 In a period of one week, document the nudges that you have experienced in your
everyday consumption. This is simply a list in a table, with a column to describe the
example of nudges in detail (you may include visuals if applicable), and another
column to explain how they have influenced your decisions. What difference did they
make? Would your decision or behavior be different if the nudges were not there?

Negative nudges are mechanisms which are usually created unintentionally, and which
cause people to make decisions that are bad for them, by altering their decision-making
environment. There is no inherent difference between ‘positive nudges’ and ‘negative
nudges’ in terms of how the nudges work, and the only difference between the two is that
positive nudges are nudges that prompt people to make “good” decisions, while negative
nudges are nudges that prompt people to make “bad” decisions.
Accordingly, negative nudges usually consist either of barriers which make it harder for
people to take action that’s good from them, or of mechanisms that discourage them from
doing so.
Some examples of negative nudges are the following:

 Bad default option. For example, if the default status of organ donors is ‘opt-in’,
meaning that people have to actively register in order to become organ donors that mean
that many people who would be willing to donate their organs aren’t going to be listed as
organ donors.
 Easy-to-select bad option. For example, if unhealthy foods are easier to reach in
the cafeteria, this encourages people to pick them, despite the fact that they’re unhealthy.
 Hard-to-select good option. For example, if registering for a good retirement plan is
difficult or requires a large number of inconvenient steps; fewer people are going to do it,
despite the fact that it’s beneficial.
As such, it’s important to identify negative nudges, and remove them where possible.

Note that, in some cases, removing a negative nudge entails inserting a positive nudge in its
place. This is what happens, for example, when you replace a negative default option with a
positive one.

However, that’s not always the case, and it’s possible to remove a negative nudge without
necessarily replacing it with a positive one. This is what happens, for example, when you
remove a negative default option, but don’t replace it with any other default option, but

instead make users pick an option themselves.

As we saw so far, many governments and organizations are happy to use nudges on a large
scale, due to their effectiveness, ease of implementation, and choice-preserving nature.
Furthermore, there is compelling evidence that the citizens of many countries support the
use of nudges in general, though there is, of course, some variation between countries and
between individuals with regard to this.

In this context, nudging is often viewed as a form of libertarian paternalism, which represents
the idea that it’s acceptable and even desirable to manipulate people when that
manipulation prompts them to make choices that are believed to be better for themselves or
for society, as long as they still have the full freedom to make whatever choice they want.
However, there have also been some criticisms of the idea of nudging, and some have
called for the outright rejection of the use of nudges. The ethics of nudging is still being
discussed, and strong arguments have been made both in favor of and against nudging.
The arguments in favor of nudging revolve around the factors that we saw so far, and
namely around the fact that nudges can prompt people to make better decisions, while
preserving their ability to choose freely.

On the other hand, many of the arguments against nudging revolve around the belief that
manipulation of people’s choice is unethical even if it preserves their freedom of choice, and
around the belief that nudges prompt people to make decisions that they might not agree are
beneficial for them.

Furthermore, there are criticisms regarding how nudging is used in fields such as marketing,
where nudges are implemented with the intent of getting people to buy certain products,
rather than with the intent of helping them make decisions that are better for them.

Overall, though nudging is generally perceived positively by the population, especially when
implemented correctly, there are still those who reject it on an ethical basis, at least in some
contexts.

Nevertheless, one thing that people on both sides of the debate can agree on is that if
nudges are used, they should be implemented with caution, especially when they are
implemented by policymakers on a large scale. Furthermore, when nudges are used in such
cases, there should be some form of oversight which ensures that nudges are implemented
in a way that respects people’s choices, and gets them to make decisions that are truly
better for them.

With your knowledge on nudges, propose your own nudge in influencing consumers’
behavior.

Insights from behavioural sciences are being increasingly used to inform policy making.
Examples include the simplification of complex environmental or sustainability information
through the use of eco-labels, improvement of the salience of health impacts of foods
through standardised nutritional information, or offering people higher levels of convenience
by providing them with close-to-home recycling facilities. Lately, the focus on applications of
behavioural economics such as nudge, have been helping policy makers in different
countries and sectors to more systematically integrate behavioural insights into policy design
and implementation in consumer and competition policies, especially when it comes to
providing default options in situations with complex information (e.g. pension funds or
financial services), simplifying complex information for users or mandating economic actors
to provide certain information. Also making key information more salient or making
preferable options more convenient for people have been widely employed.

Although scientific evidence underpins many of the policies informed by behavioural

economics, the size of the effects of policy interventions and the actual outcomes of
interventions in specific contexts remain hard to measure. Results from one experiment
cannot be indiscriminately generalised to a different context or to a wider population. The
problem is the complexity of human behaviour and the diversity of factors that influence it.
Thus, even when it is possible to demonstrate visible or significant effects of a certain
intervention, the precise causal mechanisms between the revealed subtle influences are
hard to identify in real-life contexts. This means that the policy impact might be hard to
estimate ex-ante even in the presence of sound empirical findings. Therefore policy makers
need to pay close attention to the size and relevance of an effect that might be obtained
from a specific policy intervention in a specific context (i.e., concerning a specific behaviour,
a specific target group, at a particular time, and in a localised geographical context.
Nudging promotes a more empirical approach to policy design and evaluation than the tools
usually applied in policy making and ex-ante evaluation. Cost-benefit analyses and
regulatory and sustainability impact assessments are conducted in a more deductive way,
where the gathered evidence is sieved through a theoretical framework in order to offer a
reliable estimate regarding the expected effects of a certain intervention in a middle to long
term. The behavioural economics approach relies on a much more dynamic interplay
between theory, evidence and policy relevant outcomes. Theoretical knowledge about
behaviour change may help generate a range of options for how to help various actors make
better choices, but the policy-relevant outcomes – the effect of the different interventions –
will nevertheless depend on the specifics of the context tested empirically.

Thus, in order to assess the effectiveness of a policy intervention in a specific context, policy
makers and regulators will have to employ experiments, pilots or randomised control trials, in
addition to cost-benefit analysis, regulatory and sustainability impact assessments. An
important consideration for tools based on the findings of behavioural economics is their
acceptance by the public. This depends, among other issues, on whether the targeted
behaviours are controversial or not. Here social norms and values play a role. For example,
policy tools that are designed to change the way information is presented to the users by
simplification, improving the salience of certain features or increasing the level of
convenience are less controversial.

This is because they help people avoid clearly identifiable mistakes they are prone to make
due to lack of understanding of complex information or due to paying attention to issues of
lower relevance. Other tools, such as defaults, might be more controversial to apply. Public
acceptance for different nudge tools is easier to gain if there is consensus regarding the
“ends” of the policy intervention – its goals, e.g. improved road safety. However, when there
is no common agreement about the goal of the policy intervention, which might be the case
for e.g. risky investments or gambling, high impact consumption or wasteful behaviour, it
might be difficult to gain acceptance for specific measures, even though the goals of such
interventions could have been accepted by the public.
One of the substantial limitations of nudge in the sustainable consumption field is the very
fact that it works through influencing intuitive and non-deliberative processes of individuals
and thus does not actively engage the public in debating patterns and levels of consumption.
This also means that perhaps this is a possible strategy for people with low engagement in
sustainable consumption and sustainability discourse.

Nudge is an appropriate tool for small choices and behaviours that can be influenced at the
level of detail required for designing better “choice architectures hence, “nudge” is only one
tool to make policy measures more effective. In the case of sustainable consumption, there
is also a need to understand the deeper and more societally embedded roots of
unsustainable consumption. The depoliticised nudge paradigm is not likely to support such
broader social and institutional mobilisation for sustainable consumption. The reliance on
behavioural economics and its empirical approach in the policy context has implications for
the set of skills required in order to commission, conduct and interpret the empirical
assessments, both for policy makers and regulators, as well as for the type of scientists to
be charged with the task of running the empirical tests and assessing the effectiveness of
various policy options to change behaviour.

As the application field develops, the need for a coherent theory becomes more apparent
and acute. Experts in nudging indicate that specifically the interaction between deliberative
and non-deliberative systems of thinking need to be further explored. With regard to specific
consumption domains, future research could benefit from more experimentation and piloting
in the field of mobility and travel behaviour, as there is much less research available in this
domain than in energy and food domains.