Who Should Nudge?

This chapter examines the assumption that both governments and private firms can be equally efficient in producing nudges. It describes the different processes that companies follow in creating new products and examines which process is more appropriate for designing nudges. It describes the regulatory process and examines how well it fits the task of designing nudges. It analyzes the challenges that federal and local governments face in designing effective nudges. It contrasts the regulatory process with the process used by the private sector, and finally argues that producing effective nudges requires a more flexible, iterative approach, which the regulatory process cannot accommodate. Consequently, the business of nudging should be left to the private sector.