Nudge theory

Nudge theory studies how choice environments can steer decisions while preserving freedom of choice and avoiding substantial financial incentives.

Choice architecture: The design of how options are organized and presented to decision-makers. Nudge theory treats the arrangement of options as a tool for steering choices.
Save More Tomorrow: A retirement-savings program that enrolls workers in future contribution increases as their pay rises. It applies commitment and automatic escalation to increase saving while limiting immediate sacrifice.
Richard Thaler: An American economist whose research helped establish behavioral economics and nudge theory. He co-developed the framework and connected it to economic policy.
Command-and-control regulation: Regulation that prescribes required behavior and enforces compliance through legal rules or penalties. Nudges steer decisions without making the targeted alternative illegal.
Randomized controlled trial: An experiment that assigns participants randomly to intervention and comparison groups to estimate effects. Trials can test whether a nudge changes behavior rather than merely seeming plausible.
Default effect: The tendency for people to accept a preselected option when making a choice. Defaults can shift behavior without removing alternatives or imposing penalties.
Opt-out organ donation: An organ-donation system in which people are presumed to consent unless they register otherwise. Its default setting illustrates how institutional design can affect donation rates.
Cass Sunstein: An American legal scholar whose work examines regulation, behavioral science, and public policy. He co-authored the influential formulation of libertarian paternalism.
Pigouvian tax: A tax designed to make decision-makers account for external costs or benefits. Unlike a nudge, it changes prices through a financial incentive.
Replication crisis: Concern that findings in several research fields fail to reproduce reliably in later studies. Unstable behavioral findings can weaken the evidence base for policy nudges.

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