"That’s our goal: to be the GPS for life.” What does a "nudge" mean in economics? Nobel Laureate and behavioural economist Richard Thaler explains the term he coined. Nudging helps people make decisions that are in their long-term self-interest, such as when saving for a pension. | Nobel Prize
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Could you do with a GPS for your life? Richard Thaler's "nudge" theory is a key concept in behavioural economics. Nudges are small environmental changes that can alter people's behaviour in a predictable way without restricting their freedom of choice. In traditional economics, people are assumed to be rational actors who make decisions to maximise their utility. However, in practice, people frequently procrastinate, act impulsively, or misjudge risks. Nudge theory shows how small, low-cost inte
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