Do People Need Environmental Structure to Make the Best Decisions?

-POP (1)Can people make rational decisions for themselves, or do they need to have an environment that pushes them toward the “right” decision?

There are some very smart people who stand on different sides of the debate. On the one side, you have folks who believe in the “nudge” such as the authors of the book of the same name, Richard H. Thaler and Cass R. Sunstein. They coined a term “libertarian paternalism” to describe a system in which boundaries are placed on people’s ability to make decisions in order to guide them toward the most rational choices. Thaler and Sunstein argue that libertarian paternalism balances the welfare of individuals with their ability to make choices, and the evidence they present in Nudge and other publications would suggest it works.

[On a side note, I find the concept of libertarian paternalism consistent with some of the ways of supporting autonomy in self-determination theory. Especially in health, where there truly may be a “right” way to achieve a goal, it’s possible to provide people with free choice within a set of constraints. See the example of Mindbloom. This also helps avoid some of the unpleasantness of having an overwhelming number of choices. ]

In the other corner, we have experts like psychologist Gerd Gigerenzer who believe that people can be educated to exert rational decision-making and do not require environmental constraints to do so. A recent article in The Guardian trumpeted that the libertarian paternalism approach had been “debunked” in the wake of David Cameron’s dismantling of his behavioral economics team and the publication of Gigerenzer’s new book, Risk Savvy: How to Make Good Decisions.

Personally, I think it’s beyond premature to call the work done by Thaler, Sunstein, and their very smart colleague and Nobel Prize winner Daniel Kahneman “debunked.” The truth, as I see it, probably has to do with people’s level of ability to make a rational decision. As BJ Fogg has pointed out, ability is a function of the scarcest resource at a given moment. For some people that might be time, for others knowledge, for others willpower. Whatever the case, when ability is low, the need for constraints in order to arrive at a satisfactory outcome is likely increased. When someone’s ability is high–for example, when they’ve been educated to make good financial decisions–fewer guardrails are necessary.

In fact, people may actually want constraints to help them with touch decisions. For example, WSL Strategic Retail‘s recent “Wellness Insight” report included information that 68% of shoppers want their retailers to help them make healthier choices. That is, almost 2/3 of respondents want information, guidance, and even incentives that help them make purchases more aligned with good health.

That makes sense: For a lot of people, being healthy is hard. It takes work, and there are tons of decisions to make. So people who don’t feel totally confident in their ability to make the right choice might appreciate guidance. It would not surprise me if, diving deeper into WSL Strategic Retail’s data, it turned out that the people who disliked retail guidance on health purchases also had higher health-related self-efficacy and better health literacy.

Of course, one way to avoid the accusation of controlling people is to help them learn to structure their own environments to nudge them toward better choices. In fact, this is a common strategy in health behavior change coaching. In tomorrow’s post, I’ll offer some suggestions for environmental changes people can make to encourage their own better health.