Behavioural nudges have done tremendous good for society. The many examples provided in the classic book “Nudge” by Cass Sunstein and Richard Thaler show how nudges are able to exploit our human tendency to opt for the default selection when confronted with a wide range of options or our “laziness” to change a selection made in the past. If done right, these nudges can steer consumers in the right direction towards saving more for retirement (e.g. through the save more tomorrow scheme, where retirement contributions start small and then automatically increase over time) or towards better investment portfolios (e.g. by making a target date fund the default choice for a retirement portfolio).
Nudge decay
Nudge decay
Nudge decay
Behavioural nudges have done tremendous good for society. The many examples provided in the classic book “Nudge” by Cass Sunstein and Richard Thaler show how nudges are able to exploit our human tendency to opt for the default selection when confronted with a wide range of options or our “laziness” to change a selection made in the past. If done right, these nudges can steer consumers in the right direction towards saving more for retirement (e.g. through the save more tomorrow scheme, where retirement contributions start small and then automatically increase over time) or towards better investment portfolios (e.g. by making a target date fund the default choice for a retirement portfolio).