Download our podcast to hear Richard Thaler, professor of economics and behavioural science at Chicago Graduate School of Business and co-author of Nudge, explains the concept of nudging and how it could lead to better forms of government. Both the Conservative leader, David Cameron, and Democratic presidential candidate, Barack Obama, have expressed an interest in what is being dubbed the new third way.

Key points:

What is a nudge? - Nudge is the title of a new book by Richard Thaler and Harvard Law Professor Cass R Sunstein. The authors explain in the book that nudges are not mandates, they are gentle non-intrusive persuaders such as default rules, incentives, feedback mechanisms, social cues, which influence your choice in a certain direction. However, they can be ignored - it is your choice to be nudged. For example, putting fruit at eye level in a school canteen to encourage healthy eating is a nudge, banning junk food is not.

Doesn't sound very academic? - The academic term for a nudge is libertarian paternalism. Described by Thaler and Sunstein as "a relatively weak, soft, and non-intrusive type of paternalism where choices are not blocked, fenced off, or significantly burdened. A philosophic approach to governance, public or private, to help homo sapiens who want to make choices that improve their lives, without infringing on the liberty of others."

How do we decide?

Download our podcast with Baba Shiv of Stanford GSB and find out why being emotional is a good thing when it comes to decision-making

BACKGROUND

• Nudge by Richard H Thaler and Cass R Sunstein

• Take a nudge in the right direction

Related Internet Links

• Buy the book here

Can you give me an example? - The one that Thaler likes best is a simple etching of a fly in a men's urinals which encouraged men to aim and so spill less. No signs or commands just an urge to aim at the fly by most men left the bathrooms cleaner.

So it's not just for politicians? - No, nudges can be used in any area of life including your personal life. A very simple one is if you want to diet then write down what you eat, you'll find you eat less, or serve your meals on smaller plates. Simple.

So why the political interest? - Because you can influence people's choices without being accused of "nannying" and it is cheap. Or, as the authors put it: "In many domains, including environmental protection, family law, and school choice, we will be arguing that better governance requires less in the way of government coercion and constraint, and more in the way of freedom to choose. If incentives and nudges replace requirements and bans, government will be both smaller and more modest. ...In short, libertarian paternalism is neither left nor right, neither Democratic nor Republican. In many areas, the most thoughtful Democrats are going beyond their enthusiasm for choice-eliminating programs. In many areas, the most thoughtful Republicans are abandoning their knee-jerk opposition to constructive governmental initiatives. For all their differences, we hope that both sides might be willing to converge in support of some gentle nudges"

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