TrusTing nudges Many “nudges” aim to make life simpler, safer, or easier for people to navigate, but what do members of the public really think about these policies? Drawing on surveys from numerous nations around the world, Sunstein and Reisch explore whether citizens approve of nudge policies. Their most important finding is sim- ple and striking. In diverse countries, both democratic and nondemocratic, strong majorities approve of nudges designed to promote health, safety, and environmen- tal protection—and their approval cuts across political divisions. In recent years, many governments have implemented behaviorally informed policies, focusing on nudges—understood as interventions that preserve freedom of choice, but that also steer people in certain directions. In some circles, nudges have become controversial, with questions raised about whether they amount to forms of manipulation. This fascinating book carefully considers these criticisms and answers important questions. What do citizens actually think about behaviorally informed policies? Do citizens have identifiable principles in mind when they approve or dis- approve of the policies? Do citizens of different nations agree with each other? From the answers to these questions, the authors identify six principles of legitimacy—a “bill of rights” for nudging that build on strong public support for nudging policies around the world, while also recognizing what citizens disapprove of. Their bill of rights is designed to capture citizens’ central concerns, reflecting widespread commitments to freedom and welfare that transcend national b oundaries. Cass R. Sunstein is the Robert Walmsley University Professor at Harvard, USA. From 2009 to 2012, he was Administrator of the White House Office of Information and Regulatory Affairs. He is the founder and director of the Program on Behavioral Economics and Public Policy at Harvard Law School. Lucia A. Reisch is a behavioral economist and Professor at Copenhagen Business School, Denmark. She also holds a permanent Guest Professorship at the Zeppelin University of Friedrichshafen, Germany, and an appointment as honorary Leibniz Chair, awarded by the German Leibniz Association and the Leibniz Institute of Prevention Research and Epidemiology. rouTledge AdvAnces in BehAviourAl economics And FinAnce Edited by Roger Frantz Traditionally, economists have based their analysis of financial markets and corporate finance on the assumption that agents are fully rational, emotion- less, self-interested maximizers of expected utility. However, behavioural economists are increasingly recognizing that financial decision makers may be subject to psychological biases, and the effects of emotions. Examples of this include the effects on investors’ and managers’ decision-making of such biases as excessive optimism, overconfidence, confirmation bias, and illusion of control. At a practical level, the current state of the financial markets suggests that trust between investors and managers is of paramount importance. Routledge Advances in Behavioural Economics and Finance presents innovative and cutting-edge research in this fast-paced and rapidly growing area, and will be of great interest to academics, practitioners, and policy-makers alike. All proposals for new books in the series can be sent to the series editor, Roger Frantz, at [email protected]. 1. Behavioural economics and Business ethics Interrelations and Applications Alexander Rajko 2. Bounded rationality and Behavioural economics Graham Mallard 3. Behavioural Approaches to corporate governance Cameron Elliott Gordon 4. Trusting nudges Toward a Bill of Rights for Nudging Cass R. Sunstein and Lucia A. Reisch For more information about this series, please visit: www.routledge.com/ Routledge-Advances-in-Behavioural-Economics-and-Finance/book-series/ RABEF TrusTing nudges Toward a Bill of rights for nudging Cass R. Sunstein and Lucia A. Reisch First published 2019 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 52 Vanderbilt Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2019 Cass R. Sunstein and Lucia A. Reisch The right of Cass R. Sunstein and Lucia A. Reisch to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Sunstein, Cass R., author. | Reisch, Lucia A., author. Title: Trusting nudges: toward a bill of rights for nudging / Cass R. Sunstein and Lucia A. Reisch. Description: Abingdon, Oxon; New York, NY: Routledge, 2019. | Series: Routledge advances in behavioural economics and finance | Includes bibliographical references and index. Subjects: LCSH: Policy sciences—Psychological aspects. | Common good—Psychological aspects. | Decision making—Psychological aspects. | Economics—Psychological aspects. | Public opinion. Classification: LCC H97 (ebook) | LCC H97 .S9535 2019 (print) | DDC 320.6—dc23 LC record available at https://lccn.loc.gov/2018043517 ISBN: 978-1-138-32278-3 (hbk) ISBN: 978-0-429-45164-5 (ebk) Typeset in Joanna by codeMantra To the memory of our fathers conTenTs List of figures viii List of tables ix Preface xi 1 Why public opinion matters 1 2 The united states, 1: evidence 8 3 The united states, 2: Principles 19 4 europe 29 5 A global consensus? not quite 53 6 Trusting nudges 71 7 educative nudges and noneducative nudges 95 8 misconceptions 119 9 A Bill of rights for nudging 128 Acknowledgments 139 Index 141 Figures 4.1 Bar charts for information nudges: Government campaigns, total support in % (unweighted) 37 4.2 Bar charts for information nudges, governmentally mandated; total support in % (unweighted) 38 4.3 Bar charts for default rules, total support in % (unweighted) 39 4.4 Bar chart for subliminal ads, total support in % (unweighted) 40 4.5 Bar charts for other mandates 41 5.1 General information campaigns. CI, confidence interval 59 5.2 Mandatory information imposed by governments. CI, confidence interval 60 5.3 Mandatory default rules imposed by governments. CI, confidence interval 61 5.4 Mandatory subliminal advertising. CI, confidence interval 62 5.5 Mandatory choice architecture. CI, confidence interval 62 6.1 Correlation heatmap of relevant variables 76 6.2 Overall nudge approval, conditional on trust in institutions 77 6.3 Predicted marginal probabilities for approval, conditional on institutional trust 80 A6.1 Nudge approval by gender (all studies) 84 A6.2 Nudge approval among different time periods for South Korea (K), Denmark (DK), and Germany (G) 86 TABles 2.1 American attitudes toward prominent recent nudges 10 2.2 American attitudes toward six educational campaigns 11 2.3 American attitudes toward environmental and public health nudges 12 2.4 American attitudes toward some potentially provocative nudges 13 2.5 Unpopular defaults 15 2.6 Unpopular education campaigns and disclosure 17 4.1 The 15 items of the survey 32 4.2 Overview on approval rates for the 15 nudges in the six surveyed countries 34 A4.1 Samples, sampling, and methodology 48 A4.2 Overview of political parties in the surveyed countries 49 A4.3 Clusters of the political parties in the surveyed countries 50 A4.4 Estimates of demographics and political attitude on nudge approval: Multilevel analysis 51 5.1 Estimates of selected socio-demographics and political attitude on nudge approval per nudge cluster: Multilevel analysis 64 A5.1 Observations RIM weighted/unweighted for all countries 70 6.1 Weighted OLS regression for different nudge clusters (2018 survey) 78