An answer at Quora:
Simple way? People are weird. We can exploit that.
Slightly less simple way. Human psychology has some known twists in it. We’re really pretty good at working out the costs and benefits of something out to 15 to 20 years ahead. We’re not so good at 40 years out. This is known as “hyperbolic discounting”.
There’s good reason for it for us humans. Through the process of evolution very few adults then lived more than another 20 to 30 years. 40 years out is something for the grandchildren to worry about. But when we start to think about, say, climate change, this might not be the best manner of dealing with things.
Or, another point. Getting people to do something is more difficult than getting them to stop doing it. Well, OK, as long as we’re not talking about hitting the wall with our head, that’s pretty easy to stop people doing.
So, we’ve got much longer life spans now (see above) than our brains really developed for. So, we should probably be investing for our pensions more than just free action will lead to. The “nudge” insight into this is that if we just register everyone into a pension plan then fewer will fall out and be without a pension than if we do it the other way around – leave it up to people to register if they want to.
Human behaviour has some twists in it meaning that some of our actions might not be entirely and wholly rational – rational in that non-economic sense of being fully calculating to reach the best end state. We can exploit certain of these to nudge people into that behaviour that leads to that best end state.
We do have to be very, very, careful here though. Because all of it depends upon who gets to define what that best end state is. Human history is not replete with people who managed to identify that for other people.
It’s also true that the experimentation into finding those behavioural quirks is in its infancy. We’ve already had a Nobel awarded for – in part, in part – work on the ultimatum game. No, doesn’t matter what it is, it’s the next bit that does. The results of that game from rich world undergraduates, where the work was originally done, are different from what we get when we do the same thing with poor world peasants. So, err, which results should we be using to guide nudges and policy? For the results are not just different they’re entirely opposite.
Of course, we could just say that the clever people (Cass Sunstein for example) should be left to nudge us all the way they think we should be best living our lives. But, again, human history is not replete with people who managed to identify that for other people.