Friday, November 25, 2011

Challenge: Happy Birthday nudge!

By Pelle Guldborg Hansen

I don't think that my sister have ever paid serious attention to anything I've said in my life.

Not until last Sunday at my niece's Birthday, that is.

The birthday nudge
My sister works with the Danish Cancer Society - the same organization (but different section) that we are working with through the Danish Nudging Network. Although I've once told her about nudging, I guess it's there that she has picked up some ideas.

Thus, last Sunday at my niece's Birthday party, my sister suddenly makes the announcement at the table that she has made a little nudge-experiment.

What nobody had noticed was that there were two different varieties of Birthday buns served in each their basket: one variety with sugar, one variety without. Ultimately nobody had noticed, and thus the result was that 50% less sugar was eaten, since pick of bread basket was more or less random (my sister switched bread baskets once in a while during the party).

Is it a nudge?
Whether this is a nudge depends on a few decisions. Thaler and Sunstein's definition of a nudge doesn't say explicitly whether adding a choice-option rules out a nudge. Thus one has to go to the background theory of behavioral economics to get it right. According to this, adding an option is a nudge if it influences real world behavior, but leaves the ideal agent of homo economicus unaffected.  

Ultimately, the Birthday buns manage the fundamental requirements. Adding a sugarless variety of buns left the standard singleton-choice of buns with sugar feasible. Also, there were no cost-benefit adjustment attached in any way to the intervention - not even of the social kind, since my sister didn't inform us about the addition of a new choice.

Rational Birthday party challenge
But the decisive question is: would an ideal agent be influenced by the addition of a choice?

Well, on the one hand he wouldn't have any information about the sugarless variety to begin with. That seems to leave a Birthday party of rational agents to end up with eating 50% less sugar given their imperfect information and the assumption that choice of bread basket is made at random.  

But is this the right baseline to compare observed effect with when evaluating whether the intervention ultimately qualifies as a nugde?

I want to pose this as a challenge to you readers out there: is the Birthday Bun Nudge, really a nugde?
I'll provide my answer later on. For now, I leave you with the following clues.

(1) Ideal decision makers have taste-buds just like everyone else, but they also have perfect recall.
(2) At the rational birthday party ideal decision makers have imperfect information, but are also capable of learning.
(3) People did not eat the same number of Birthday buns. Some ate 1, most ate 2 or 3, and a few ate 4.
(4) My sister was willing to answer any question honestly.

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