1st Panel on Nudging and Design Decisions

The Rational Think Tank and its local sub-entity Bucerius Rational Think Tank hosted the First Panel on Nudging and Design Decisions at Bucerius Law School (Hamburg) on November 12, 2018. Professor Avishalom Tor (USA) and Professor Kai Purnhagen (Netherlands) gave their professional insights into selected aspects on the debate, moderated by Dr. Laurence O’Hara (Germany).

Nudges are measures that maintain the individual’s freedom of choice and do not significantly change incentives of individuals yet direct the decision-maker towards a predefined desired direction. The result is called a design decision. Governments have quickly realized the potential of this behavioral-science-based influencing technique. Most major western democracies have implemented so called Nudge Units. Those councils frequently advise their government, among other issues, on how to use Nudges to steer their citizens in the direction of “socially desirable” behavior. This panel discussion as the first in a series served as an introduction into nudging, questioned the use of Nudges in Germany and shed light onto a German government institution often entitled “Nudge Unit”.

Dr. Laurence O’Hara, MPP (Harvard) is a Senior Research Fellow in the Research Group “Behavioral Law and Economics” at the Max-Planck-Institute for Research on Collective Goods in Bonn, Germany. He welcomed over 60 interdisciplinary guests out of the area of greater Hamburg in the Auditorium of Bucerius Law School. He gave a brief introduction into the field and explained the recent developments in behavioral laws and economics.

Professor Dr. Avishalom Tor is Professor of Law and Director of the Research Program on Law and Market Behavior at University of Notre Dame Law School, USA. He is further Global Professor of Law at University of Haifa Faculty of Law, Israel. In his opening statement, Prof. Tor asked the question of when to nudge and therefore clarified from a welfarist perspective why to nudge. He then pointed out, that if a nudge should work and works, it should be used. If it should work, but fails, it should be fixed. But if a nudge should not work but works, it should be stopped. However, if a nudge should not work and fails anyways, that is okay. He completed his explanations by demonstrating two solutions: Either narrowing the nudge definition to only rationality-promoting or enabling nudges or make the nudge subject to a behavioral cost-benefit analysis.

Professor Dr. Kai Purnhagen, LL.M. (Wisconsin) is Associate Professor of Law in the Department of Social Sciences at Warningen University & Research, Netherlands. In his opening statement he gave insights in various nudging projects of several German ministries (2014-2017) and explained the political motivation behind nudging. Further he explained how the law participates in the nudging process as a tool to implement the nudges into public policy. He gaves examples where the involved players – such as lawyers, behavioral economists and political actors – faced conflicts and others, where they harmonized very well.

Following the opening statements, the two experts discussed selected aspects on nudging, thus giving an introduction in many different discussed aspects in this field. Dr. O’Hara moderated this discussion as well as the colloquium, where the auditors were able to ask their very individual questions.

The auditors were elated by the topic and the presentations of the academics. Following the panel discussion everybody had the opportunity for further discussions during a reception. We acknowledge the generosity of Bucerius Law School. Bucerius did not only sponsor food and drinks at the reception, they as well paid for transportation and lodging.