Behavioral Nudges and Public Policy; Implications to Overcome Policy Makers Biases

Document Type : Research Paper

Authors

1 Associate Prof., Department of Leadership and Human Capital, Faculty of Management, University of Tehran, Tehran, Iran.

2 PhD Candidate, Department of Public Administration, Alborz Campus, University of Tehran, Tehran, Iran.

3 PhD Candidate, Department of Public Administration, Alborz Campus, Faculty of Management, University of Tehran, Tehran, Iran.

Abstract

Objective
This paper examines the application of nudges as a behavioral tool and also welcomes behavioral nudges in overcoming policymaking biases. According to behavioral research, policymakers are subject to different biases that may lead to errors and misunderstandings in the process of decision-making. Recognizing that policymakers are not immune from these biases, the paper explores the use of nudges as alternative regulatory tools for governments in influencing policymakers’ behavior. The question now is how and under which circumstances nudges operate and interact with those biases.To support the argument, the paper also investigates some examples of cognitive biases and behavioral nudges in Iranian organizations.
Methods
In the first stage of the study, by using a mixed method, mental patterns were extracted. Then, researchers conducted in-depth interviews including behavioral biases and nudges. In the second stage, by using the Q methodology and factor analysis, the results were extracted. In the following, the data were arranged in the form of T tables. The average of the total variance of biases and nudges was extracted. Due to the special nature of the subject, we made a combination of theoretical studies and field research findings. The researchers were influenced by the results of the interviews to present experts' conceptual framework. Based on the literature review and the interviews conducted, conceptual codes were extracted and categorized into 31 themes.
Results
The results showed that policymakers are subject to cognitive errors and cognitive biases. In the conducted studies, 14 biases were categorized and divided into three determining patterns. It was specified in the form of informative and inspiring nudges. Also, we did the investigation for 16 elements referring to behavioral nudges of policymakers. By examining different cognitive biases, behavioral nudges can help design a better choice architecture for policymakers.
Conclusion
By examining different cognitive biases, the paper discussed policymakers’ mistakes when they are dealing with decisions about public problems. In this regard, nudging tools can help design a choice architecture to frame decisions in ways that could lead to more public welfare. The results showed for inspirational nudging, fundamental shake-ups, constitutional amendment, administrative reforms, and the creation of a space for discourse and the creation of new presuppositions are more critical. For the awareness nudging model, 14 nudges were categorized. In this regard simulation and future study of a policy, mental stereotypes analysis, realism, and change of mental patterns are highlighted. Considering the findings, nudges can play a regulatory role in focusing on the effects and aspects of public events. The article concludes with some ideas for improving nudges and suggestions for future research.

Keywords

Main Subjects


Allcott, H. & Sunstein, C.R. (2015). Regulating internalities. Journal of Policy Analysis and Management, 34(3), 698-705.
Allcott, H. & Wozny, N. (2014). Gasoline prices, fuel economy, and the energy paradox. Review of Economics and Statistics, 96(5), 795-779.
Allen, J. S. (2000). Nature, society, and thought: a journal of dialectical and historical materialism, Volume 13, Number 1 (January 2000, Special issue) Marxist Educational Press.
Allen, J.S. (2000). The Negro Question. Nature, society, and thought: a journal of dialectical and historical materialism, 13(1)
Alwani, S.M., Danaei Fard, H., Azar, A. (2021). Methodology book of qualitative research in management: a comprehensive approach. Tehran: Safar Eshraghi. (in Persian)
Bökenkamp, A., Böckenhauer, D., Cheong, H.I., Hoppe, B., Tasic, V., Unwin, R., Ludwig, M. (2009). Dent-2 disease: a mild variant of Lowe syndrome. The Journal of Pediatrics, 155(1), 94-9. doi: 10.1016/j.jpeds.2009.01.049. PMID: 19559295.
Buchanan, J.M. & Tollison, R.D. (1984). The Theory of public choice--II. University of Michigan Press.     
Chitsazian, A. & Noruzi, M. (2022). Designing a Model of Public Behavior Change Tools in Behavioral Public Policy Based on Thoughts of Iranian Philosopher Martyr Ayatollah Morteza Motahari. Journal of Public Administration, 14(3), 388-423. doi: 10.22059/jipa.2022.333759.3053 (in Persian)
Cooper, J.C. & Kovacic, W.E. (2012). Behavioral economics: implications for regulatory behavior. Journal of Regulatory Economics, 41(1), 41-58.
Dadgar, Y. (2018). Behavioral economics. An evolutionary trend in comprehensive science (with an emphasis on public policy), Tehran: Noor Elm. (in Persian)
Danaei Fard, H., Hosseini, Y. & Sheikhha, R. (2012). Q methodology book: theoretical foundations and research framework, Tehran: Safar. (in Persian)
Dessaint, O. & Matray, A. (2017). Do managers overreact to salient risks? Evidence from hurricane strikes. Journal of Financial Economics, 126(1), 97- 121.
Downie, C. (2013). Three Ways to Understand State Actors in International Negotiations: Climate Change in the Clinton Years (1993–2000). Global Environmental Politics, 13 (4), 22–40. doi: https://doi.org/10.1162/GLEP_a_00196
Dudley, S. & Peacock, M. (2017). Improving Regulatory Science: A Case Study of the National Ambient Air Quality Standards. Supreme Court Economic Review, 24(1), 49-99.
Dudley, S. E. & Xie, Z. (2019). Nudging the nudger: Toward a choice architecture for regulators. Regulation & Governance, 16(1), 261-273.    
Dudley, S. E. & Xie, Z. (2020). Designing a choice architecture for regulators. Public Administration Review, 80(1), 151-156.
Dudley, S. E. & Xie, Z. (2022). Nudging the nudger: Toward a choice architecture for regulators. Regulation & Governance, 16(1), 261- 273.
Elliott, J. (2001). Making evidence-based practice educational. British educational research journal, 27(5), 555-574.
Fano, U. (1975). Platzman's analysis of the delivery of radiation energy to molecules. Radiation Research, 64(2), 217- 232.          
Gayer, T. & Viscusi, W.K. (2013). Overriding consumer preferences with energy regulations. Journal of Regulatory Economics, 43(3), 248- 264.           
Glazer, Sh. (2006). Social support across cultures. International Journal of Intercultural Relations, 30(5), 605- 622.
Hanson, M.D. & Chen, E. (2007). Socioeconomic status and health behaviors in adolescence: a review of the literature. Journal of behavioral medicine, 30(3), 263- 285.     
Hirshleifer, D.A., Myers, J.N., Myers, L.A. & Hong Teoh, S. (2008). Do individual investors cause post-earnings announcement drift? Direct evidence from personal trades. The Accounting Review, 83(6), 1521-1550.
Jolls, Ch. (1998). Behavioral economics analysis of redistributive legal rules. Vanderbilt Law Review, 51, 1653.
Jolls, Ch. (2007). Behavioral law and economics: National Bureau of Economic Research, Cambridge, Mass. USA.
Kahneman, D. & Tversky, A. (1972). Subjective probability: A judgment of representativeness. Cognitive psychology, 3(3), 430-454.

Keshavarz, M., Damghanian, H., Ebrahimi, S.A. Rastgar, A. (2021). Investigating the Role of Organizational Nudge, Emotional Intelligence, and Intrinsic Motivation in Creating Proenvironmental Behavior of Employees. Academy of Organizational Behavior Management, 10(1), 103-125. (in Persian)

Kruger, J. & Dunning, D. (1999). Unskilled and unaware of it: how difficulties in recognizing one's own incompetence lead to inflated self-assessments. Journal of personality and social psychology, 77(6), 1121.  
Kuran, T. & Sunstein, C.S. (1998). Availability cascades and risk regulation. Stanford Law Review, 51(4).
Kvale, S. (1996). Inter views: An Introduction to qualitative research interviewing, New York, McGraw-Hill.
Leonard, T.C., Goldfarb, R.S. & Suranovic, S.M. (2000). New on paternalism and public policy. Economics & Philosophy, 16(2), 323-331.
Lévy-Garboua, L., Maafi, H. & Masclet, D. & Terracol, A. (2012). Risk aversion and framing effects. Experimental Economics, 15(1), 128-144.
Malekzadeh, G, Adibzadeh, M, & Gholami, M. (2018). The Mediating Role of MUM Avoidance in the Relationship between Error Management Climate and Learning Behavior with Individual Performance. Journal of Public Administration, 10(4), 651-677. doi: 10.22059/jipa.2018.259733.2293 (in Persian)
Mohammadzadeh Soltanmoradi, H., Feizy, T., Geramipour, M., & Yadollahi, M. (2019). Explanation and Pathology of the Current Pattern of Public Administration in Iran. Journal of Public Administration, 11(1), 1-26. doi: 10.22059/jipa.2019.271880.2451(in Persian)

Monavvarian, A., Peyvasteh, A., Kamal Vaezi, S., & Khosh Chehre, M. (2017). Designing a Model to Employ Scientific Elites in University Camps of the Country  (Case Study: Tehran University Professors). Journal of Public Administration, 9(3), 463-488. doi: 10.22059/jipa.2017.232829.1999 (in Persian)

Mora, S., Martín-González, E., Prados-Pardo, Á., Moreno, J., López, M.J., Pilar-Cuellar, F., Castro, E., Díaz, Á., Flores, P., Moreno, M. (2020). Increased vulnerability to impulsive behavior after streptococcal antigen exposure and antibiotic treatment in rats. Brain Behav Immun. 89, 675-688. doi: 10.1016/j.bbi.2020.08.010
Morandin, L. A. & Winston, M.L. (2006). Pollinators provide economic incentive to preserve natural land in agroecosystems. Agriculture, Ecosystems & Environment, 116(3-4), 289- 292.

Peter, J. & Stoker, G. (2016). From nudge to nudge plus: behavioural public policy for a self-guiding society, Towards applying Nudge Thinking to EU Policies (owninitiative opinion), Adopted on 14/12/2016 - Bureau decision date: 21/01/2016

Rachlinski, F., Cynthia, R. & Jeffrey, J. (2002). Foreword: Post-Public Choice. Cornell Law Review, 105(4).
Renani, M., Hosseini-Kandalji, M., Ahmadi, M. (2018) Behavioral economics for dummies. Avand Danesh.Tehran (in Persian)
Rizzo, M. J. & Whitman, D.G. (2009). Little brother is watching you: New paternalism on the slippery slopes. SSRN Electronic Journal, 51(3).
Salehi, O. (2019). Behavioral sciences and public policy. Research Institute of Economic Affairs. Tehran (in Persian)
Schnellenbach, J. & Schubert, C. (2015). Behavioral political economy: A survey. European Journal of Political Economy, 40, 395- 417.
Schulz-Hardt, S (2000). Biased information search in group decision making. Journal of personality and social psychology, 78(4), 655-669.
Serrano, A., Caballero-Calero, O., Garcia, M.A., Lazic, S., Carmona, N., Castro, G.R., Martin-Gonzalez, M. & Fernandez, J.F. (2020). Cold sintering process of ZnO ceramics: Effect of the nanoparticle/microparticle ratio. Journal of the European Ceramic Society, 40(15), 5542- 5535.
Siegrist, M. & Sütterlin, B. (2014). Human and nature-caused hazards: The affect heuristic causes biased decisions. Risk Analysis, 34(8), 1482-1494.          
Simon, H.A. (1945). Theory of Games and Economic Behavior. JSTOR.
Snipp, C.M. (2003). Racial measurement in the American census: Past practices and implications for the future. Annual Review of Sociology, 29, 563- 588.       
Stigler, G.J. (1943). Outlay and Income in the United States, JSTOR.
Sunstein, C. R. & Kuran, T. (1999). Availability Cascades and Risk Regulation, Stanford Law Review384(4).
Sunstein, C.R. (2020). Behavioral science and public policy: Cambridge University Press.
Tamdanjahormi, M.H. & Pasbani Soumeeh, A. (2019). A comment on economic psychology. Baghi Soumeeh  .Tehran (in Persian)
Tasić, N. (2011). Anthropomorphic figurines from Vinča excavations 1998–2009. Documenta Praehistorica, 38, 149-158.
Tasic, S. (2011). Are regulators rational? Journal des conomistes et des tudes Humaines, 17(1), Available at SSRN: https://ssrn.com/abstract=2492608
Thaler, R. (2017). Behavioral economics. Journal of Political Economy, 125(6), 1799-1805.
Thaler, R.H. & Benartzi, S. (2004). Save more tomorrow™: Using behavioral economics to increase employee saving. Journal of political Economy, 112(51).
Thaler, R.H. & Sunstein, C.R. (2008). Nudge: Improving decisions about health, wealth, and happiness. Springer.  
Tramontana, C., Calabrò, F., Cassalia, G. & Rizzuto, M.C. (2018). Economic sustainability in the management of archaeological sites: the case of Bova Marina (Reggio Calabria, Italy). International Symposium on New Metropolitan Perspectives, PP. 288-297.
Vaezi, S. K, & Rahbar, R. (2016). The mediating role of sense of powerlessness on the relationship between perceived accountability and the participation behavior of college students case study : Students of University of Tehran. Journal of Public Administration, 8(1), 113-136. doi: 10.22059/jipa.2016.57508 (in Persian)
Viscusi, W. K. & Gayer, T. (2015). Behavioral Public Choice: The Behavioral Paradox of Government Policy (03/31/2015). Mercatus Working Paper, Available at SSRN: https://ssrn.com/abstract=3191387 or http://dx.doi.org/10.2139/ssrn.3191387
Viscusi, W.K. (1999). Are risk regulators rational? Evidence from hazardous waste cleanup decisions. American Economic Review, 89(4), 1010-1027.
Weinschenk, A.C. (2015). Political trust in the American states. State and Local Government Review, 47(1), 26-37.
Winston, B. E. & Patterson, K. (2006). An integrative definition of leadership. International journal of leadership studies, 1(2), 6-66.
Yasini, A, Rezaei Khah, H., Tabab, M. & Zain Abadi, H.R. (2015). Identifying the mental patterns of Ilam University employees regarding job promotion using the Q method.  Public Organizations Management5(1), 107-120. (in Persian)
Zabala, A., Sandbrook, C. & Mukherjee, N. (2018). When and how to use Q methodology to understand perspectives in conservation research. Conservation Biology, 32(5), 1185-1194.