How Richard Thaler's Nudge Theory Can Be Used in Analytics

The 49th Sveriges Riksbank prize in economic sciences – commonly referred to as the Nobel Prize for economics – has been awarded to Richard H Thaler for his contributions to behavioural economics. He was a key proponent of the idea that humans do not act entirely rationally and is primarily known for his often misunderstood concept of Nudge Theory. Attributed to Richard Thaler and Cass Sunstein in their book "Nudge: Improving Decisions about Health, Wealth, and Happiness," a "Nudge" can change the behaviour or decision that a human will make. The basis of Nudge theory is to apply an understanding of predicted behaviours to shape and influence that automated process. Leveraging a variety of different strategies, such as default settings, information as an incentive and right context, companies have proven the ability to change someone's behaviour through a successful Nudge.