Research conducted by behavioural economists has demonstrated that individuals faced with complex decision-making situations – for example, choosing where to invest their savings, stopping smoking or applying for a tax rebate – often make irrational decisions such as saving too little or too much, continuing to smoke or failing to apply for a rebate to which they are entitled.
Many people will have heard of the concept of nudging, which in a behavioural context refers to steering an individual’s behaviour in a given, desired direction; influencing their choices without removing other alternatives. This term gained popularity in 2008, when coined in a book by Cass R. Sunstein and Richard H. Thaler . In 2017, the latter was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his contribution to behavioural economics.
Based on this understanding of the irrationality of human behaviour, nudging can act as an instrument for influencing an individual’s behaviour and choices. Behavioural economics gave rise to the field of behavioural design, in which insights from behavioural sciences are applied to influence the decisions we make by implementing designs that make it easier for people to choose the desired behaviour. Behavioural design theory combines research in the fields of behavioural economics, psychology of learning and cognitive psychology.
