Nudge

I had a stopover in the Amsterdam Airport a couple of years ago and when I went to the restroom, I noticed that there were small images of flies painted inside the urinals. I suspected that they were to encourage people to aim properly, but never gave it much thought after I caught my flight home. Last week, I spotted this article in the Times that talked about the flies and referred to them as "nudges." Apparently, those little bugs reduced "spillage" by as much as 80%.

Richard Thaler, a behavioral economist from the University of Chicago describes nudges as:

a harmless bit of engineering that manages to “attract people’s attention and alter their behavior in a positive way, without actually requiring anyone to do anything at all."

Nudges seem like a great idea as long as they're cheap and easy to implement relative to the projected payoff. The flies in the urinal are a great example of a high upside, minimal downside situation where the worst case scenario would be that the Amsterdam Airport might look silly because they spent a few hundred dollars to affix these images to their toilets.

There are other ideas for nudges laid out in this article that I'm not sure qualify as nudges at all. For example, Mr. Thaler calls for "rigorous public disclosure of leverage" in all financial institutions. I think that's a great idea, but to refer to it as a "nudge" minimizes both its importance, and onerous nature.

Anyway, I thought this concept was interesting when I read about it last week, and now it just became 5,000 times more intriguing. I'm going to submit some of my best "nudge" ideas and hopefully become $5,000 richer. Why don't you give it a try too?