A nudge will do it.

The urinals in Amsterdam's Schiphol airport are now the most famous of their kind. For this, they must thank Cass Sunstein and Richard Thaler, authors of Nudge.

Etched inside each urinal at Schiphol is the image of a small, black fly. As bored men relieve themselves, Sunstein and Thaler write, their attention is invariably drawn to the fly. And so is their aim. Research in the men's room -- the Dutch are nothing if not thorough -- found "that etchings reduce spillage by 80 per cent."

This is one of the more light-hearted illustrations Sunstein and Thaler use to make a point that is anything but trivial: People are sensitive to all sorts of subtle influences and governments can use that sensitivity to advance important public policy goals. The full force of the state -- in the form of taxes and bans -- isn't always required. Sometimes a little nudge can make a world of difference.

Sunstein is a law professor. Thaler is an economist. What unites them is psychology.

Cognitive psychologists say our decisions are the products of two minds. There is a conscious mind, obviously. It's the mind reading this column, the mind that can understand numbers and think logically.

The conscious mind thinks it's got sole control but that is an illusion. Most of what the brain does happens below the level of consciousness. The great strength of the unconscious mind is its speed: Unlike the slow, lumbering, conscious mind, the unconscious mind delivers instantaneous judgments. We experience these as feelings, intuitions, hunches -- a sense that something is true even if we can't quite articulate why.

Our decisions can be the product of one or both minds. Ideally, the unconscious mind delivers a snap judgment and then the conscious mind slowly and carefully examines it -- adjusting or over-ruling if it is flawed. In reality, that seldom happens. Psychologists have shown that when we have a strong intuition about something, most people -- including most educated, intelligent people -- do not consciously examine that intuition and ask themselves if it really makes sense. They just go with their gut.
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How the unconscious mind works is therefore of enormous importance in everything people think and do. And so, by learning what psychology has discovered about its operations, those who are in the business of influencing people's thoughts and actions can be much more effective.

Cass Sunstein has written many books applying the insights of psychology to issues of risk regulation. Richard Thaler did the same in economics -- work which gave rise to the burgeoning new field of "behavioural economics." Now, with Nudge, it's on to the broader field of public policy.

Sunstein and Thaler believe -- and they're absolutely right -- that policy is too often built on the discredited notion that people's thoughts are conscious and their conclusions rational. This is the old model of "Homo economicus" and it's dead wrong. Yes, human are rational, but only within bounds. And yes, incentives matter. But so do many other influences that policy makers haven't a clue about.

Nudge was only released a few months ago but it has sold remarkably well -- it helps that the writing is light, bright, and funny -- and there's already reason to think it will be influential. David Cameron, the new leader of the British Conservative party -- and almost certainly the next prime minister of the United Kingdom -- has praised it. Barack Obama is even more closely connected: Cass Sunstein is a friend and former colleague at the University of Chicago law school while Obama's top economic advisers include several of Richard Thaler's acolytes.

In part, politicians are attracted to the idea of "nudging" because it transcends ordinary politics. For activist-minded liberals, "nudging" offers new, more effective ways of encouraging positive behaviour and advancing important public goals. This sort of paternalism usually offends small-government conservatives but "nudging" is more acceptable to them because it doesn't compel certain behaviour. It merely encourages it.
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If the term hadn't already been taken, one could call it the "third way." Sunstein and Thaler give it the clunky moniker "libertarian paternalism."

Of course, it also helps that nudge-based policies "cost little or nothing," Sunstein and Thaler write. "They impose no burden on taxpayers at all."

It sounds too good to be true but Sunstein and Thaler offer some compelling demonstrations of nudging in action.

Consider retirement savings. Employees should leap at the opportunity to enrol in defined contribution plans in which employers make matching contributions. It's free money. And yet, they don't leap. In the U.K., some defined contribution plans require employees to put nothing in. All they have to do is enrol and they start receiving money from the employer. And yet a survey of 25 such plans found half of employees failed to act.

The problem is what psychologists call "status quo bias." The status quo is always the favoured option because it requires us to do nothing. And we like to do nothing.

The solution is to change the status quo: Make enrolment automatic unless the employee fills in a form. In one study, this apparently trivial change caused enrolment to shoot from 65 per cent to 98 per cent.

No cost. Better result. And no one's freedom has been restricted.

Nudging will never eliminate the traditional tools of government, but it does add a smart alternative to the toolbox.

You can contact Dan Gardner at the Ottawa Citizen.
E-mail: dgardner@thecitizen.canwest.com

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