Table Of ContentModern Studies in European Law
Nudge and the Law
A European Perspective
With a Foreword by Cass Sunstein
Edited by
Alberto Alemanno and Anne-Lise Sibony
NUDGE AND THE LAW
Behavioural sciences help refi ne our understanding of human decision-making.
Their insights are immensely relevant for policy-making since public interven-
tion works much better when it targets real people rather than imaginary beings
assumed to be perfectly rational. Increasingly, governments around the world
are keen to rely on those insights for reshaping public interventions in a wide
range of policy areas such as energy, health, fi nancial services and data protection.
When policy-making meets behavioural sciences, effective and low-cost regula-
tions can emerge in the form of default rules, smart disclosure and simplifi cation
requirements. While behaviourally-informed intervention has a huge potential
for policy-making, it also attracts legitimacy and practicability concerns. Nudge
and the Law takes a European perspective on those issues and explores the legal
implications of the emergent phenomenon of behavioural regulation by focusing
on the challenges and opportunities it may offer to EU policy-making and beyond.
Modern Studies in European Law
Recent titles in this series:
EU Environmental Law, Governance and Decision-Making
Maria Lee
Shaping the Single European Market in the Field of Foreign Direct Investment
Philip Strik
Nationalism and Private Law in Europe
Guido Comparato
EU Asylum Procedures and the Right to an Effective Remedy
Marcelle Reneman
The EU Accession to the ECHR
Edited by Vasiliki Kosta, Nikos Skoutaris and Vassilis P Tzevelekos
The European Court of Justice and External Relations: Constitutional Challenges
Edited by Marise Cremona and Anne Thies
A Critique of Codifi cation
Leone Niglia
Protecting Vulnerable Groups: The European Human Rights Framework
Edited by Francesca Ippolito and Sara Iglesias Sanchez
EU International Relations Law Second Edition
Panos Koutrakos
Fundamental Rights in the EU: A Matter for Two Courts
Edited by Sonia Morano-Foadi and Lucy Vickers
What Form of Government for the European Union and the Eurozone?
Federico Fabbrini, Ernst Hirsch Ballin and Han Somsen
The UK and European Human Rights: A Strained Relationship?
Edited by Katja S Ziegler, Elizabeth Wicks and Loveday Hodson
The European Union in International Organisations and Global Governance:
Recent Developments
Edited by Christine Kaddous
For the complete list of titles in this series, see
‘ Modern Studies in European Law ’ link at
w ww.hartpub.co.uk/books/series.asp
Nudge and the Law
A European Perspective
Edited by
Alberto Alemanno
and
Anne-Lise Sibony
OXFORD AND PORTLAND, OREGON
2015
Published in the United Kingdom by Hart Publishing Ltd
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I SBN: 978-1-84946-732-2
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Foreword
The Ethics of Nudging
CASS R SUNSTEIN
I. THE CENTRAL ARGUMENT
This book offers an exceptionally impressive, and wide-ranging, set of essays on
behaviourally informed approaches to law and regulation in Europe, with particu-
lar reference to nudges. In Europe as elsewhere, an important question is drawing
increasing attention: what are the ethical limits on nudges? This question is in
the background of many of the chapters, and sometimes it emerges in the fore-
ground (chapter 4 by Van Aaken, chapter 13 by Feldman and Lobel, chapter 14
by Alemanno and Sibony). It is on this question that I would like to focus in this
Foreword. In free societies, respectful of human dignity and dedicated to the idea
of self-government, the issue is a pressing one.
My central argument is that at least if they are taken in general or in the abstract,
the leading ethical objections lack a great deal of force, and for two different rea-
sons. F irst , both nudges and choice architecture are inevitable, and it is therefore
pointless to wish them away. Second , many nudges, and many forms of choice
architecture, are defensible and even required on ethical grounds, whether we
care about welfare, autonomy, dignity, self-government, fair distribution, or some
other value.
Nonetheless, it is true that all government action, including nudges, should
face a burden of justifi cation (and sometimes a heavy burden). If the govern-
ment requires disclosure of information, or establishes particular default rules,
it must explain and defend itself. The fact that people retain freedom of choice,
and are ultimately permitted to go their own way, does not give public offi cials a
kind of license to do whatever they want. If we value democratic self-government,
we will be inclined to support nudges and choice architecture that can claim a
democratic pedigree and that promote democratic goals. Any democracy has a
form of choice architecture that helps defi ne and constitute its own aspirations to
self-government.
Of course no one should approve of nudges or choice architecture in the abstract
or as such. Some nudges, and some forms of choice architecture, do indeed run
into convincing ethical objections. Suppose, for example, that a nation establishes
a default rule stating that unless voters explicitly indicate otherwise, they will be
vi Foreword
presumed to support the incumbent leader in the election. Or suppose that a
nation establishes a default rule to the effect that unless citizens indicate otherwise,
their estates will revert to the nation ’ s most powerful political party upon their
death. There is ample reason to question a default rule of this kind even if citizens
are authorised to opt out.
A central question is whether nudges and choice architecture promote welfare
or autonomy and dignity. Another question is whether they are consistent with
democratic norms. Some nudges have illicit ends, and they are objectionable for
that reason.
II. CONCEPTS AND DEFINITIONS
A. In General
Nudges are interventions that steer people in particular directions but that also
allow them to go their own way.1 A reminder is a nudge; so is a warning. A GPS
nudges; a default rule nudges. To qualify as a nudge, an intervention must not
impose signifi cant material incentives. 2 A subsidy is not a nudge; a tax is not a
nudge; a fi ne or a jail sentence is not a nudge. To count as such, a nudge must
fully preserve freedom of choice. If an intervention imposes signifi cant mate-
rial costs on choosers, it might of course be justifi ed, but it is not a nudge. Some
nudges work because they inform people; other nudges work because they make
certain choice easier; still other nudges work because of the power of inertia and
procrastination.
Attention is a scarce resource. When applications (for loans, for educational
opportunities, for refi nancing mortgages, for training, for fi nancial benefi ts of
any kind) are complex and diffi cult, people may not apply; a great deal of money
might be lost as a result. 3 This point has implications for regulatory design. It sug-
gests that the private sector may help or hurt people by focusing their attention in
certain ways. The same is true for the public sector, whether or not it seeks to do
so. A regulation might be written or applied in a way that makes certain features
of a situation especially salient.
For the future, we could imagine nudges that are designed to improve anti-pov-
erty programmes; environmental programmes; energy programmes; 4 retirement
and social security programmes; anti-obesity programmes; educational pro-
grammes; health care programmes; and programmes to increase organ donation.5
1 See R Thaler and CR Sunstein , N udge ( New Haven , CT , Yale University Press , 2008 ) .
2 On some of the complexities here, see CR Sunstein , Why Nudge? ( New Haven , CT , Yale University
Press , 2014 ) .
3 See B Keys et al, ‘ Failure to Refi nance ’ ( 2014 ), available at www.nber.org/papers/w20401 .
4 ibid.
5 For an interesting empirical result, see J Kessler and A Roth, ‘ Don ’ t Take “ No ” For An Answer:
An Experiment With Actual Organ Donor Registrations ’ (2014), available at www.nber.org/papers/
w20378 (fi nding that required active choosing has a smaller effect, in terms of getting people to sign up
for organ donation, than prompted choice).
Foreword vii
We could also imagine forms of choice architecture that are designed to combat
race and sex discrimination, to help disabled people, and to promote economic
growth. A great deal of future work needs to be devoted to choice architecture in
these and related domains.
There is no question that certain nudges, and certain kinds of choice archi-
tecture, can raise serious ethical problems. Consider, for example, a government
that used nudges to promote discrimination on the basis of race, sex, or religion.
Any fascist government might well (and almost certainly does) nudge. Terrorists
nudge. Even truthful information (eg about crime rates) might fan the fl ames of
violence and prejudice. (If people learn that crime is widespread, they might be
more likely to engage in crime, because it is the social norm). Groups or nations
that are committed to violence often enlist nudges in their cause. Even if nudges
do not have illicit ends, it is possible to wonder whether those who enlist them are
treating people with respect.
Consider in this light a tale from the novelist David Foster Wallace:
There are these two young fi sh swimming along and they happen to meet an older fi sh
swimming the other way, who nods at them and says ‘ Morning, boys. How ’ s the water?’
And the two young fi sh swim on for a bit, and then eventually one of them looks over at
the other and goes ‘ What the hell is water? ’6
This is a tale about choice architecture. Such architecture is inevitable, whether
or not we see it. It is the equivalent of water. Weather is itself a form of choice
architecture, because it infl uences what people decide. Human beings cannot live
without some kind of weather. Nature nudges. The common law is a regulatory
system, and it will nudge, even if it allows people to have a great deal of fl exibility.
Nor can the state and the legal system avoid nudging. Any government, even one
that is or purports to be fi rmly committed to laissez-faire, has to establish a set of
prohibitions and permissions, including a set of default entitlements, establishing
who has what before bargaining begins. Recall that the rules of contract (as well
as property and tort) provide a form of choice architecture for social ordering. It
is true that choice architecture can maintain freedom of choice; it is also true that
choice architects can at least aspire to neutrality. But choice architecture itself is
inevitable, which means that it is pointless to object to it on ethical groups.
B. Nudging System 1
In behavioural science, it has become standard to distinguish between two families
of cognitive operations: System 1, which is fast, automatic, and intuitive, and Sys-
tem 2, which is slow, calculative, and deliberative. 7 System 2 can and does err, but
System 1 is distinctly associated with identifi able behavioural biases. To be sure,
6 Available at moreintelligentlife.com/story/david-foster-wallace-in-his-own-words.
7 See D Kahneman , T hinking, Fast and Slow ( New York , NY , Farrar, Strauss and Giroux , 2011 ) .
viii Foreword
there is, in some circles, intense controversy about the appropriate evaluation of
the automatic system and about the extent to which it should be associated with
error. Perhaps our intuitions usually work well in the situations in which we ordi-
narily fi nd ourselves. But there is no question that our intuitions often misfi re, and
that a good nudge could provide a great deal of help.
Some nudges, imposed by law and regulatory agencies, attempt to strengthen
the hand of System 2 by improving the role of deliberation and people ’ s consid-
ered judgements — as, for example, through disclosure of relevant information,
debiasing, and the use of precommitment strategies. Other nudges are designed
to appeal to, or to activate, System 1 — as in the cases of graphic warnings. Some
nudges do not appeal to System 1, but work because of its operation — as, for
example, where default rules have large effects because of the power of inertia.
A nudge might be justifi ed on the ground that it helps counteract a behavioural
bias, and (as we shall see) some people object to such efforts, especially if they
seem to target or to exploit System 1. But (and this is an important point) a behav-
ioural bias is n ot a necessary justifi cation for a nudge, and nudges need not target
or exploit System 1 in any way, as emphasised by several authors in this volume
(Alemanno and Sibony in chapter 14). Disclosure of information can be helpful
even in the absence of any bias. A default rule simplifi es life and might therefore
be desirable whether or not a behavioural bias is involved. A GPS is useful even for
people who do not suffer from any such bias.
As the GPS example suggests, many nudges have the goal of increasing
navigability — of making it easier for people to get to their preferred destination.
Such nudges stem from an understanding that life can be simple or hard to navi-
gate, and a goal of helpful choice architecture is desirable as a way of promoting
simple navigation. To date, there has been far too little attention to the close rela-
tionship between navigability and (good) nudges. Insofar as the goal is to promote
navigability, the ethical objections are greatly weakened and might well dissipate.
In this regard, Alemanno and Sibony in their concluding chapter offer some help-
ful refl ections on how to assess the autonomy objection to nudges. They argue,
plausibly in my view, that many behavioural interventions are neutral with respect
to autonomy because they affect behaviour in instances where, in all likelihood, no
deliberation would have taken place.
C. ‘ As Judged by Themselves ’
When third parties are not at risk, and when the welfare of choosers is all that
is involved, the objective of nudging is to ‘ infl uence choices in a way that will
make choosers better off, a s judged by themselves ’ .8 In many cases, that standard
is straightforward to apply. If a GPS steers people toward a destination that is not
8 Thaler and Sunstein (n 1) 5.
