What is the Nudge Theory?

Nudge theory is a flexible and modern concept for:

  • Understanding of how people think, make decisions, and behave,
  • Helping people improve their thinking and decisions,
  • Managing change of all sorts, and
  • Identifying and modifying existing unhelpful influences on people.
People are greatly influenced by consumption norms within a social or family group. A light eater will eat much more than they usually would when they find themselves with a group of heavy eaters. A heavy eater will eat less when they are with a group of  light eaters. The average group behavior therefore can exert a great deal of influence. 
Nudge theory was named and popularized by the 2008 book, 'Nudge: Improving Decisions About Health, Wealth, and Happiness', written by American academics Richard H Thaler and Cass R Sunstein. The book is based strongly on the Nobel prize-winning work of the Israeli-American psychologists Daniel Kahneman and Amos Tversky.

Background - Thaler and Sunstein

'Nudge' theory was proposed originally in US 'behavioral economics', but it can be adapted and applied much more widely for enabling and encouraging change in people, groups, or yourself.

Nudge theory can also be used to explore, understand, and explain existing influences on how people behave, especially influences that are unhelpful, with a view to removing or altering them. There are lots of these unhelpful 'nudges' everywhere - notably in advertising and government; some accidental, many very deliberate.

Note: This article is not a reproduction or extraction of Thaler and Sunstein's work - it is a summary, interpretation and extension of 'Nudge' theory, including the main terminology, expanded by supplementary methods, with helpful explanations, examples and connections, to related ideas and concepts of motivation and management.

Accordingly, if you seek to understand Thaler and Sunstein's work first-hand, or to research and extract from the original Thaler-Sunstein source material, then you should obtain their book 'Nudge', and also explore Kahneman and Tversky's earlier work. If you extract/quote from this article please clarify in the citation that the extract is taken from this article/webpage, (which is, therefore, a 'secondary source' in terms of the theories of Thaler, Sunstein, Kahneman and Tversky). Like any review this article is open to debate as to how precisely it interprets and represents the original (Thaler-Sunstein/Kahneman-Tversky) work, and this is especially so because of the adaptive and developmental nature of this article....FULL ARTICLE 

How Nudge Works