Behavioral Economics, Ep. 4: Should Someone Nudge You Into Making A Decision?

Here’s how you help free people make the best choices.

Free market economists argue that people should be left alone to make decisions for themselves, but sometimes, specialized knowledge is required to make a decision that most people just don’t have. Is there a way to encourage people to make what is, for most of them, the right choice without forcing all of them to make that choice? The answer is what economists call nudging. Professor Antony Davies of Duquesne University and Erika Davies of George Mason University explain. Learn more at

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1 year ago at 11:15 AM

“So the tax on sugary drinks in [Berkeley] would be nudging?”

I think that would be altogether different. Nudging would be, for instance, placing the drinks far in the back of stores and in hard to reach places, either by law or voluntarily, or putting images of obese individuals on the pack of sugar drinks. A nudge doesn’t affect the intended recipients’, of the “choice architecture”, abilities directly. A tax directly prevents customer and businesses, on the margin, from being able to proceed. Excluding professionally offended SJWs, customers are still just as capable to make a purchase of a can of sugary drinks even if an offensive image is placed on it.

Basically, a nudge is what marketing is supposed to be and it can apply to transactions among equals as well as government agents and their subjects.

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1 year ago at 10:59 AM

So the tax on sugary drinks in Berkley would be nudging.

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1 year ago at 12:41 PM

Nudging should be done if and only if done voluntarily. So if I hire a physician, I expect and want to be nudged or manipulated to do something I would do if I were in a better state of mind with more information. I don’t want to be manipulated involuntarily. I don’t want to be tricked into investing in a bank involved in the next economic bubble for instance.

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