Getting Real on Rationality—Behavioral Science, Nudging, and Public Policy

Abstract

The nudge approach seeks to improve people's decisions through small changes in their choice environments. Nudge policies often work through psychological mechanisms that deviate from traditional notions of rationality. Because of that, some critics object that nudging treats people as irrational. Such treatment might be disrespectful in itself and might crowd out more empowering policies. I defend nudging against these objections. By defending a nonstandard, ecological model of rationality, I argue that nudging not only is compatible with rational agency but can even support it. Accordingly, a concern with rationality speaks for more rather than less public policy nudging. * I would like to thank two anonymous reviewers and several associate editors of Ethics for helpful written comments. I would also like to thank Jennifer Morton, Chiara Lisciandra, Susanne Burri, and Bart Engelen for their generous and helpful written comments and Luc Bovens for valuable discussions. I should also thank audiences at the Social Epistemology Masterclass in Groningen, the panel on nudging at Mancept, and the "Luc Bovens farewell fest" at the London School of Economics for helpful feedback.

The ethics of nudging: An overview

“…Nudging would thereby strengthen rather than undermine rational agency. Of course, this defense does not give policymakers a carte blanche: Policies other than nudging, for example, educational interventions, should often be preferred when they better improve people's rational agency (Schmidt, , pp. 535–542). ivAbsence of domination …”

“…Nudges, however, seem to prioritize System 1 over System 2 and direct people towards irrelevant aspects of options rather than those that make them choiceworthy. Now, this objection might be less forceful, if we take a different, ecological view of rationality: Different heuristics and other fast and frugal decision-making procedures can be entirely rational relative to the person who employs them and the environment in which they are used (Gigerenzer & Selten, 2002;Morton, 2011;Schmidt, 2019;Todd, Gigerenzer, and ABC Research Group, 2012). In real-life contexts, good outcomes are often better achieved, particularly under cognitive and temporal constraints, through fast and frugal heuristics instead of slow deliberation and utility maximization.…”

“…According to nudge proponents, we should treat people as they are. If people are less rational than they think or wish they were be, then respecting them as agents does not imply treating them as perfectly rational choosers (Engelen, ; Schmidt, ).…”

“…Hansen and Jespersen distinguish between “type 1 nudges” that mostly rely on “arational” heuristics and biases and “type 2 nudges” that appeal to both more automatic and faster and to more deliberative and slower capacities (Hansen & Jespersen, ; John, , pp. 128–133; Schmidt, ). Examples of the latter are alarm sounds for seatbelts, traffic light labels for nutrients on packaging, and colorful footsteps towards recycling bins.…”

“…Finally, proponents could also put forth a more ambitious response and take issue with the notion of rationality that typically underlies the rationality objection (Schmidt, ). The rationality objection often draws on a view of rational agency (loosely) based on rational choice theory: Rational agents have preference orders over options, deliberately attend to relevant features of options that underlie their preference orders, and take relevant probabilities into account.…”