Kerala floods and Nudge economics

Behavioural economist Richard Thaler won the 2017 Nobel Memorial Prize in Economic Sciences (aka the Nobel Prize in Economics). This was for work which “incorporat[ed] psychologically realistic assumptions into analyses of economic decision-making. By exploring the consequences of limited rationality, social preferences, and lack of self-control, he has shown how these human traits systematically affect individual decisions as well as market outcomes.” 

Thaler and Sunstein describe a nudge as ‘any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives’. 

The definition draws attention to a key difference between nudges and more traditional persuasion techniques. Distinct from traditional fundraising techniques, or government use of social advertising, nudges primarily aim to alter behaviour, rather than achieve attitudinal change. Nudges attempt to achieve norm compliance, as opposed to norm internalization.

Sometimes a small nudge changes our behavior and leads to higher donation to charities. Hence, sometimes things are there in our mind but we need a small nudge to take action! The webinar for CSE preparation is a nudge to take this step for donations towards #Keralafloods relief !