Insights gleaned from behavioral economics, psychology and analytics equip governments to tackle complex issues and affect citizen behavior without significant economic regulation or penalties. Consider, for example, the psychologically motivated line in a tax-collection letter: “Did you know that 90 percent of your neighbors paid their taxes on time?” Similarly, psychology suggests that people are more likely to act in a certain way if the desired option is the simplest. The tricky part is presenting choices in such a way that citizens are encouraged to make better decisions without impinging on their freedom of choice.
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The UK government’s Behavioral Insights Team (Nudge Unit) applies insights from academic research in behavioral economics and psychology to public policy and services. The unit has worked on multiple pilots with positive changes in public behavior in areas such as job center services, car tax late payments and non-payment of court fines.