Introduction
Nudging, as defined by Thaler and Sunstein(2008), refers to interventions aimed at altering people's behavior predictably without restricting their freedom of choice. The concept has gained popularity across various domains, including public policy, healthcare, as well as in commercial enterprises through marketing and other advertising practices. While proponents argue that nudging steers individuals towards better choices, critics highlight the ethical concerns of the phenomenon. Is it a benign incentive towards a better option, or beneath the veneer of benevolence lies deeper issues of manipulation, paternalism and autonomy?
In this article, we delve into the ethical implications of nudging, examining its use by governments and private companies and its relation to libertarian paternalism and free will, particularly in the healthcare department, as discussed by Sugden(2017), where he argues that nudges presuppose an understanding of individuals' preference bundles by choice architects.
The Obesity Paradox and Nudging Assumptions
Thaler and Sunstein use the example of obese Americans to illustrate nudging. However, Sudgen argues that since they do not pinpoint any specific reasoning errors among these individuals, their assumption that obesity contradicts one's best interest implies a presumption of cognitive error- they cannot act on their latent preferences. This line of reasoning is, according to Sudgen, inherently paternalistic since it overlooks individuals’ subjective judgments regarding their well-being. He contends that without evidence of obese individuals preferring healthier diets, the argument lacks individuals’ subjective judgments. The critique does not suggest wrongdoing in policymakers’ efforts to promote healthy diets, but rather that the fundamental requirement that deviates nudges from paternalism (“as judged by themselves”) is not being achieved. Thus, government interventions, in this case, may inadvertently steer individuals away from their desired consumption patterns, highlighting the ethical complexities of nudging.
Covert Manipulation: Nudges in Policy-making
Similarly, the application of nudges in policymaking raises ethical concerns. Unlike traditional paternalistic policies such as prohibiting or taxation, which are, although not ideal, totally transparent, the same cannot be said about nudges. Instead of direct commands and explicit incentives such as taxes or subsidies, nudges operate covertly, subtly adjusting default settings or rearranging options to exploit individuals’s cognitive biases and weaknesses. This concealed manipulation guides them toward what policymakers deem as the “correct” decision. While some may accept some degree of government paternalism if conducted openly, it’s ethically questionable when they exploit individuals' decision-making flaws to manipulate them, especially when these choices align with policymakers’ preferences, not necessarily those individuals would autonomously make.
Ethical Dilemma in the Private Sector
In the realm of private enterprises, nudges have proven to be highly effective. For instance, cab drivers in New York saw a 12% increase in tips after implementing credit card payment systems, where the 15% to 30% default tip options were presented clearly on the screen, whereas the custom tip option was of difficult access. Large coffee chains like Starbucks also employ nudges to encourage tipping by presenting tips in monetary values rather than percentages. Presenting values of 1€, 2€, and 5€ makes the consumer more prone to tip rather than if he sees, for example, 20%, 40%, or even 100%.
While this practice may indeed raise some ethical concerns, such as encouraging increased spending, the business's ultimate goal is profit maximization and efficiency, often linked to increased tips, and surely not to increase societal welfare. Regardless, those are not the ethics discussed in this article, so we will leave it open to the reader's discretion.
Ultimately, nudges’ effectiveness lies in their hidden nature compared to blatantly open paternalistic moves. However, this naturally compromises individual autonomy by guiding decisions based on third-party opinions rather than personal preferences. The lack of empirical evidence proving the superiority of nudge choices over autonomous ones further underscores the ethical ambiguity around nudging.
Regardless, several examples of positive nudging campaigns have, overall, demonstrated utility. Examples include the use of graphic images on cigarette packs to dissuade smoking and the opt-out system used in Austria regarding organ donation, which has a consent rate for organ donation of 99.98%. These examples demonstrate nudging’s capacity to positively impact societal outcomes while acknowledging the ethical tightrope it walks.
Conclusion
In sum, while nudging offers a nuanced approach to behavior modification, its ethical implications demand careful consideration. Achieving a balance between promoting beneficial choices and respecting individual autonomy is essential. It falls upon individuals to, through careful consideration, discern where they stand on this issue and navigate the ethical complexities of nudging in contemporary society.
Written by Carolina Martins and Daniel Ferreira