People aren’t fully rational. Environments, whether physical or digital, influence the choices people make and how they behave. Anyone who has followed the cues to socially distance himself or herself from others in a line in a supermarket during the pandemic or ended up donating more money to a charity than they had originally intended due to the suggested donation amounts on the charity’s webpage has likely been subject to a nudge. Originating in the field of behavioral economics, nudges are changes in how choices are presented or set up to influence people to take a specific action. They are extremely effective in steering consumer behavior but can have troubling consequences. Consider how Facebook’s “like” button has contributed to digital addiction and the way YouTube’s recommendation algorithm has fueled extremism and hate. As these examples make abundantly clear, business leaders need to look critically at how they nudge users to understand whether they are truly acting in their best interests.
How to Manipulate Customers … Ethically
As the influence of behavioral economics has grown, companies have increasingly been adopting “nudges” to influence how users of their products or services make choices. But nudges — changes in how choices are presented or set up to influence people to select specific ones — can have troubling consequences. Consequently, business leaders need to look critically at how they nudge users to understand whether they are truly acting in their best interests. Drawing from a landmark report to guide the conduct of biomedical and behavioral research involving human subjects, this article offers three principles to help companies design ethical nudges.
As these examples make abundantly clear, business leaders need to look critically at how they nudge users to understand whether they are truly acting in their best interests.