Nudge: Improving Decisions About Health, Wealth, and Happiness: Improving Decisions About Health, Wealth and Happiness

A nudge, as we will use the term, is 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 intense aversion to trading increased risk for some other advantage plays out on a grand scale in the laws and regulations governing risk. This trend is especially strong in Europe, where the precautionary principle, which prohibits any action that might cause harm, is a widely accepted doctrine. In the regulatory context, the precautionary pri

some governments will allocate their resources in a way that fits with people’s fears rather than in response to the most likely dangers.

Understanding mental accounts would also improve public policy. Governments can benefit from understanding the concept of mental accounting.