Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
Hostname: page-component-586b7cd67f-rdxmf Total loading time: 0 Render date: 2024-11-22T10:33:31.203Z Has data issue: false hasContentIssue false

Chapter 8 - Nudging as a Tool of Market Design and Profitability: Performativity in the Age of Behavioural Economics

from Part II - Post-Performative Approaches to Studying Markets

Published online by Cambridge University Press:  aN Invalid Date NaN

By
Leonardo Conte  and
Leìna Pellandini-Simaìnyi
Edited by
Susi Geiger ,
Katy Mason ,
Neil Pollock ,
Philip Roscoe ,
Annmarie Ryan ,
Stefan Schwarzkopf  and
Pascale Trompette
Susi Geiger
Affiliation:
University College Dublin
Katy Mason
Affiliation:
Lancaster University
Neil Pollock
Affiliation:
University of Edinburgh
Philip Roscoe
Affiliation:
University of St Andrews, Scotland
Annmarie Ryan
Affiliation:
University of Limerick
Stefan Schwarzkopf
Affiliation:
Copenhagen Business School
Pascale Trompette
Affiliation:
Université de Grenoble
Get access

Summary

Traditional economics served as the model case of most early performativity theory. In recent years, however, behavioural economics and particularly nudging has become increasingly popular; both as a policy instrument to design markets and as a behaviour change tool used by for-profit organizations. This chapter unpacks the implications of this shift in economic discourse for performativity theory, examining to what extent the performative process of behavioural economics overlaps with standard performativity and how it differs from that of traditional economics across policy and business domains. We focus on four aspects of the shift: (1) the nature of the economic subjects – consumers, workers, market actors – being performed, (2) the changes in the underlying normative standpoints and the politics of performativity, (3) the technologies of knowing adopted, and (4) the performative actions and socio-technical assemblages facilitated by traditional versus behavioural economics. The chapter concludes by offering a theoretical extension of performativity theory and a critical account of the potential impacts of behavioural economics and by laying the groundwork for future research.

Keywords

Performativitypoliticsnudgingbehavioural economics
Type
Chapter
Information
Market Studies
Mapping, Theorizing and Impacting Market Action
 , pp. 127 - 143
Publisher: Cambridge University Press
Print publication year: 2024

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

ABSA (2023) Behavioural science teams. Available at www.behavioralscience.org/behavioral-science-teams (accessed 19 April 2024).Google Scholar
Araujo, L. (2007) Markets, market-making and marketing. Marketing Theory, 7(3), 221–226.CrossRefGoogle Scholar
Ariely, D. (2009) Predictably Irrational: The Hidden Forces that Shape Our Decisions. New York: HarperCollins.Google Scholar
Berg, N., and Gigerenzer, G. (2010) As-if behavioral economics: neoclassical economics in disguise? History of Economic Ideas, 18(1), 1000–1033.Google Scholar
Berndt, C. (2015) Behavioural economics, experimentalism and the marketization of development. Economy and Society, 44(4), 567–591.CrossRefGoogle Scholar
Boldyrev, I., and Svetlova, E. (eds.) (2016) Enacting Dismal Science: New Perspectives on the Performativity of Economics. Basingstoke: Palgrave Macmillan.CrossRefGoogle Scholar
Brisset, N., (2019) Economics and Performativity: Exploring Limits, Theories and Cases. Abingdon: Routledge.Google Scholar
Cabantous, L., and Gond, J. P. (2011) Rational decision making as performative praxis: explaining rationality’s éternel retour. Organization Science, 22(3), 573–586.CrossRefGoogle Scholar
Cabinet Office (2011) Behavioural Insights Team: annual update 2010–11. London: Cabinet Office.Google Scholar
Çalışkan, K., and Callon, M. (2009) Economization, part 1: shifting attention from the economy towards processes of economization. Economy and Society, 38(3), 369–398.CrossRefGoogle Scholar
Çalışkan, K., and Callon, M. (2010) Economization, part 2: a research programme for the study of markets. Economy and Society, 39(1), 1–32.CrossRefGoogle Scholar
Callon, M. (1998a) The embeddedness of economic markets in economics, in Callon, M. (ed.), The Laws of the Markets. Oxford: Blackwell, 1–58.Google Scholar
Callon, M. (ed.) (1998b) The Laws of the Markets. Oxford: Blackwell.Google Scholar
Callon, M. (2007) What does it mean to say that economics is performative?, in MacKenzie, D., Muniesa, F., and Siu, L. (eds.), Do Economists Make Markets? On the Performativity of Economics. Princeton, NJ: Princeton University Press, 311–357.Google Scholar
Callon, M. (2008) Economic markets and the rise of interactive agencements: from prosthetic agencies to habilitated agencies, in Pinch, T., and Swedberg, R. (eds.), Living in a Material World: Economic Sociology Meets Science and Technology Studies. Cambridge, MA: MIT Press, 29–56.CrossRefGoogle Scholar
Callon, M., and Muniesa, F. (2005) Peripheral vision: economic markets as calculative collective devices. Organization Studies, 26(8), 1229–1250.CrossRefGoogle Scholar
Camerer, C. F., and Loewenstein, G. (2004) Behavioral economics: past, present, future, in Camerer, C. F., Loewenstein, G., and Rabin, M. (eds.), Advances in Behavioral Economics. Princeton, NJ: Princeton University Press, 3–51.CrossRefGoogle Scholar
Carton, G. (2020) How assemblages change when theories become performative: the case of the Blue Ocean Strategy. Organization Studies, 41(10), 1417–1439.CrossRefGoogle Scholar
Chataway, R. (2020) The Behaviour Business: How to Apply Behavioural Science for Business Success. Petersfield: Harriman House.Google Scholar
Chater, N. (2018) The Mind Is Flat: The Remarkable Shallowness of the Improvising Brain. New Haven, CT: Yale University Press.Google Scholar
Cochoy, F. (2008) Calculation, qualculation, calqulation: shopping cart arithmetic, equipped cognition and the clustered consumer. Marketing Theory, 8(1), 15–44.CrossRefGoogle Scholar
Cochoy, F., Trompette, P., and Araujo, L. (2016) From market agencements to market agencing: an introduction. Consumption Markets & Culture, 19(1), 3–16.CrossRefGoogle Scholar
Coleman, J. (1982) The normative basis of economic analysis: a critical review of Richard Posner’s The Economics of Justice. Stanford Law Review, 34(5), 1105–1131.CrossRefGoogle Scholar
D’Adderio, L., Glaser, V., and Pollock, N. (2019) Performing theories, transforming organizations: a reply to Marti and Gond. Academy of Management Review, 44(3), 676–679.CrossRefGoogle Scholar
D’Adderio, L., and Pollock, N. (2014) Performing modularity: competing rules, performative struggles and the effect of organizational theories on the organization. Organization Studies, 35(12), 1813–1843.CrossRefGoogle Scholar
Diacon, P. E., Donici, G.-A., and Maha, L. G. (2013) Perspectives of economics: behavioural economics. Theoretical and Applied Economics, 20(7), 27–32.Google Scholar
Ferraro, F., Pfeffer, J., and Sutton, R. I. (2005) Economic language and assumptions: how theories can become self-fulfilling. Academy of Management Review, 30(1), 8–24.CrossRefGoogle Scholar
Fogg, B. (2020) Tiny Habits: The Small Changes that Change Everything. Boston: Houghton Mifflin Harcourt.Google Scholar
Fourcade, M., and Healy, K. (2007) Moral views of market society. Annual Review of Sociology, 33, 285–311.CrossRefGoogle Scholar
Frerichs, S. (2011) False promises? A sociological critique of the behavioural turn in law and economics. Journal of Consumer Policy, 34(3), 289–314.CrossRefGoogle Scholar
Fridman, D. (2010) A new mentality for a new economy: performing the Homo economicus in Argentina (1976–83). Economy and Society, 39(2), 271–302.CrossRefGoogle Scholar
Friedman, M. (1953) Essays in Positive Economics. Chicago: University of Chicago Press.Google Scholar
Garcia-Parpet, M.-F. (2007) The social construction of a perfect market: the strawberry auction at Fontaines-en-Sologne, in MacKenzie, D., Muniesa, F., and Siu, L. (eds.), Do Economists Make Markets? On the Performativity of Economics. Princeton, NJ: Princeton University Press, 20–53.Google Scholar
Ghoshal, S. (2005) Bad management theories are destroying good management practices. Academy of Management Learning & Education, 4(1), 75–91.CrossRefGoogle Scholar
Ghoshal, S., and Moran, P. (1996) Bad for practice: a critique of the transaction cost theory. Academy of Management Review, 21(1), 13–47.CrossRefGoogle Scholar
Gond, J. P., Cabantous, L., Harding, N., and Learmonth, M. (2016) What do we mean by performativity in organizational and management theory? The uses and abuses of performativity. International Journal of Management Reviews, 18(4), 440–463.CrossRefGoogle Scholar
Gond, J. P., and Carton, G. (2022) The performativity of theories, in Neesham, C., Reihlen, M., and Schoeneborn, D. (eds.), Handbook of Philosophy of Management. Cham: Springer International, 159–181.CrossRefGoogle Scholar
Grüne-Yanoff, T. (2012) Old wine in new casks: libertarian paternalism still violates liberal principles. Social Choice and Welfare, 38(4), 635–645.CrossRefGoogle Scholar
Guala, F. (2001) Building economic machines: the FCC auctions. Studies in History and Philosophy of Science Part A, 32(3), 453–477.CrossRefGoogle Scholar
Guala, F. (2007) How to do things with experimental economics, in MacKenzie, D., Muniesa, F., and Siu, L. (eds.), Do Economists Make Markets? On the Performativity of Economics. Princeton, NJ: Princeton University Press, 128–162.Google Scholar
Guala, F. (2008) Experimental economics, history of, in Durlauf, S., and Blume, L. (eds.), The New Palgrave Dictionary of Economics, vol. 3. London: Palgrave Macmillan, 152–156.Google Scholar
Güntner, A., Lucks, K., and Sperling-Magro, J. (2019) Lessons from the front line of corporate nudging. McKinsey Quarterly, 23 January.Google Scholar
Halpern, D. (2015) Inside the Nudge Unit: How Small Changes Can Make a Big Difference. London: Penguin Random House.Google Scholar
Hargreaves Heap, S. P. (2013) What is the meaning of behavioural economics? Cambridge Journal of Economics, 37(5), 985–1000.CrossRefGoogle Scholar
Hausman, D. M., and McPherson, M. S. (2008) The philosophical foundations of mainstream normative economics, in Hausman, D. M., (ed.), The Philosophy of Economics: An Anthology. Cambridge: Cambridge University Press, 226–250.Google Scholar
Heukelom, F. (2014) Behavioral Economics: A History. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Jackson, S. E. (2010) Nudge your way to higher value. Journal of Business Strategy, 31(6), 46–48.CrossRefGoogle Scholar
Jacobi, E. S., Freund, J., and Araujo, L. (2015) ‘Is there a gap in the market, and is there a market in the gap?’ How advertising planning performs markets. Journal of Marketing Management, 31(1/2), 37–61.CrossRefGoogle Scholar
Jacobs, M. (1995) An essay on the normative foundations of antitrust economics. North Carolina Law Review, 74(1), 219–266.Google Scholar
Johnson, E. J., and Goldstein, D. (2003) Do defaults save lives? Science, 302(5649), 1338–1339.CrossRefGoogle ScholarPubMed
Jones, R., Pykett, J., and Whitehead, M. (2013) Behaviour change policies in the UK: an anthropological perspective. Geoforum, 48, 33–41.CrossRefGoogle Scholar
Kahneman, D. (2011) Thinking, Fast and Slow. New York: Farrar, Straus & Giroux.Google Scholar
Kahneman, D., and Tversky, A. (1979) Prospect theory: an analysis of decision under risk. Econometrica, 47(2), 263–291.CrossRefGoogle Scholar
Keynes, J. M. (1891) The Scope and Method of Political Economy. London: Macmillan.Google Scholar
Kotler, P. (2020) Marketing is the original behavioral economics. Evonomics, 15 July. Available at https://evonomics.com/philip-kotler-marketing-is-the-original-behavioral-economics (accessed 19 May 2023).Google Scholar
Kuhn, T. S. (1962) The Structure of Scientific Revolutions. Chicago: University of Chicago Press.Google Scholar
Langley, P., and Leaver, A. (2012) Remaking retirement investors: behavioural economics and defined-contribution occupational pensions. Journal of Cultural Economy, 5(4), 473–488.CrossRefGoogle Scholar
Lewis, M. (2017) The Undoing Project: A Friendship that Changed Our Minds. New York: W.W. Norton.Google Scholar
Ly, K., and Soman, D. (2013) Nudging around the world, research report. Toronto: Rotman School of Management, University of Toronto.Google Scholar
MacKenzie, D. (2007) Is economics performative? Option theory and the construction of derivatives markets, in MacKenzie, D., Muniesa, F., and Siu, L. (eds.), Do Economists Make Markets? On the Performativity of Economics. Princeton, NJ: Princeton University Press, 54–86.Google Scholar
MacKenzie, D. (2009) Material Markets: How Economic Agents Are Constructed. Oxford: Oxford University Press.Google Scholar
MacKenzie, D., and Millo, Y. (2003) Constructing a market, performing theory: the historical sociology of a financial derivatives exchange. American Journal of Sociology, 109(1), 107–145.CrossRefGoogle Scholar
MacKenzie, D., Muniesa, F., and Siu, L. (2007a) Introduction, in MacKenzie, D., Muniesa, F., and Siu, L. (eds.), Do Economists Make Markets? On the Performativity of Economics. Princeton, NJ: Princeton University Press, 1–19.Google Scholar
MacKenzie, D., Muniesa, F., and Siu, L. (eds.) (2007b) Do Economists Make Markets? On the Performativity of Economics. Princeton, NJ: Princeton University Press.Google Scholar
McMahon, J. (2015) Behavioral economics as neoliberalism: producing and governing Homo economicus. Contemporary Political Theory, 14(2), 137–158.CrossRefGoogle Scholar
Marti, E., and Gond, J. P. (2018) When do theories become self-fulfilling? Exploring the boundary conditions of performativity. Academy of Management Review, 43(3), 487–508.CrossRefGoogle Scholar
Marti, E., and Gond, J. P. (2019) How do theories become self-fulfilling? Clarifying the process of Barnesian performativity. Academy of Management Review, 44(3), 686–694.CrossRefGoogle Scholar
Mason, K., Kjellberg, H., and Hagberg, J. (2015) Exploring the performativity of marketing: theories, practices and devices. Journal of Marketing Management, 31(1/2), 1–15.CrossRefGoogle Scholar
Michie, S., van Stralen, M. M., and West, R. (2011) The behaviour change wheel: a new method for characterising and designing behaviour change interventions. Implementation Science, 6, DOI: 10.1186/1748-5908-6-42.CrossRefGoogle ScholarPubMed
Mitchell, G. (2004) Libertarian paternalism is an oxymoron, Public Law Research Paper 136. Tallahassee, FL: Florida State University College of Law.Google Scholar
Mols, F., Haslam, S. A., Jetten, J., and Steffens, N. K. (2015) Why a nudge is not enough: a social identity critique of governance by stealth. European Journal of Political Research, 54(1), 81–98.CrossRefGoogle Scholar
Moscati, I. (2007) Early experiments in consumer demand theory: 1930–1970. History of Political Economy, 39(3), 359–401.CrossRefGoogle Scholar
Muniesa, F. (2014) The Provoked Economy: Economic Reality and the Performative Turn. Abingdon: Routledge.CrossRefGoogle Scholar
Muniesa, F., and Callon, M. (2007) Economic experiments and the construction of markets, in MacKenzie, D., Muniesa, F., and Siu, L. (eds.), Do Economists Make Markets? On the Performativity of Economics. Princeton, NJ: Princeton University Press, 163–189.Google Scholar
OECD (2017) Behavioural Insights and Public Policy: Lessons from around the World. Paris: OECD Publishing.Google Scholar
Ortmann, A. (2013) Episodes from the early history of experimentation in economics, Research Paper 2013-34. Sydney: School of Business, University of New South Wales.CrossRefGoogle Scholar
Pellandini-Simányi, L. (2016) Non-marketizing agents in the study of markets: competing legacies of performativity and actor-network-theory in the marketization research program. Journal of Cultural Economy, 9(6), 570–586.CrossRefGoogle Scholar
Pellandini-Simányi, L., and Conte, L. (2021) Consumer de-responsibilization: changing notions of consumer subjects and market moralities after the 2008–9 financial crisis. Consumption Markets & Culture, 24(3), 280–305.CrossRefGoogle Scholar
Polanyi, K. (1977) The economistic fallacy. Review (Fernand Braudel Center), 1(1), 9–18.Google Scholar
Quaglia, L. (2012) The ‘old’ and ‘new’ politics of financial services regulation in the European Union. New Political Economy, 17(4), 515–535.CrossRefGoogle Scholar
Rebonato, R. (2014) A critical assessment of libertarian paternalism. Journal of Consumer Policy, 37(3), 357–396.CrossRefGoogle Scholar
Rodrik, D. (2016) Economics Rules: The Rights and Wrongs of the Dismal Science. New York: W.W. Norton.Google Scholar
Roth, A. E. (1993) The early history of experimental economics. Journal of the History of Economic Thought, 15(2), 184–209.CrossRefGoogle Scholar
Sassatelli, R. (2001) Tamed hedonism: choice, desires and deviant pleasures, in Warde, A., and Gronow, J. (eds.), Ordinary Consumption. London: Routledge, 93–106.Google Scholar
Schmidt, A. T., and Engelen, B. (2020) The ethics of nudging: an overview. Philosophy Compass, 15(4), DOI: 10.1111/phc3.12658.CrossRefGoogle Scholar
Schwarzkopf, S. (2018) Consumer-citizens: markets, marketing and the making of ‘choice’, in Kravets, O., Maclaran, P., Miles, S., and Venkatesh, A. (eds.), The SAGE Handbook of Consumer Culture. London: SAGE, 435–452.CrossRefGoogle Scholar
Selinger, E., and Whyte, K. (2011) Is there a right way to nudge? The practice and ethics of choice architecture. Sociology Compass, 5(10), 923–935.CrossRefGoogle Scholar
Shu, S. (2018) Example companies involved with behavioral economics. Steve Shu Consulting, 1 July. Available at https://steveshuconsulting.com/2018/07/companies-involved-behavioral-economics (accessed 19 May 2023).Google Scholar
Simon, H. A. (1990) Bounded rationality, in Eatwell, J., Milgate, M., and Newman, P. (eds.), Utility and Probability. London: Palgrave Macmillan, 15–18.CrossRefGoogle ScholarPubMed
Singler, E. (2015) Nudge Marketing: Winning at Behavioral Change. Harlow: Pearson.Google Scholar
Slater, D. (1997) Consumer Culture and Modernity. Cambridge: Polity Press.Google Scholar
Slater, D., and Tonkiss, F. (2001) Market Society: Markets and Modern Social Theory. Cambridge: Polity Press.Google Scholar
Smith, N. C., Goldstein, D. G., and Johnson, E. J. (2013) Choice without awareness: ethical and policy implications of defaults. Journal of Public Policy & Marketing, 32(2), 159–172.CrossRefGoogle Scholar
Smith, V. L. (1976) Experimental economics: induced value theory. American Economic Review, 66(2), 274–279.Google Scholar
Soman, D., and Yeung, C. (eds.) (2020) The Behaviorally Informed Organization. Toronto: University of Toronto Press.Google Scholar
Sunstein, C. R., and Thaler, R. H. (2003) Libertarian paternalism is not an oxymoron. University of Chicago Law Review, 70(4), 1159–1202.CrossRefGoogle Scholar
Svorenčík, A., and Maas, H. (2016) The Making of Experimental Economics. Heidelberg: Springer.CrossRefGoogle Scholar
Thaler, R. H. (2016a) Misbehaving: The Making of Behavioral Economics. New York: W.W. Norton.Google Scholar
Thaler, R. H. (2016b) Why most economists might as well be studying unicorns, interview by S. Vedantam. The Hidden Brain Podcast, 12 January. Available at www.wnyc.org/story/richard-thaler-why-most-economists-might-as-well-be-studying-unicorns (accessed 19 May 2023).Google Scholar
Thaler, R. H., and Sunstein, C. R. (2008) Nudge: Improving Decisions about Health, Wealth, and Happiness. New Haven, CT: Yale University Press.Google Scholar
Thaler, R. H., Sunstein, C. R., and Balz, J. P. (2013) Choice architecture, in Eldar, S., (ed.), The Behavioral Foundations of Public Policy. Princeton, NJ: Princeton University Press, 428–439.CrossRefGoogle Scholar
Thurstone, L. L. (1931) The indifference function. Journal of Social Psychology, 2(2), 139–167.CrossRefGoogle Scholar
Tikotsky, A., Pè’er, E., and Feldman, Y. (2020) Which nudges do businesses like? Managers’ attitudes towards nudges directed at their business or at their customers. Journal of Economic Behavior and Organization, 170, 43–51.CrossRefGoogle Scholar
Tversky, A., and Kahneman, D. (1974) Judgment under uncertainty: heuristics and biases. Science, 185(4157), 1124–1131.CrossRefGoogle ScholarPubMed
Tversky, A., and Kahneman, D. (1985) The framing of decisions and the psychology of choice, in Wright, G. (ed.), Behavioral Decision Making. Boston: Springer, 25–41.CrossRefGoogle Scholar
Valdés, J. G. (1995) Pinochet’s Economists: The Chicago School of Economics in Chile. Cambridge: Cambridge University Press.Google Scholar
Wendel, S. (2020) Who is doing applied behavioral science? Results from a global survey of behavioral teams. Behavioral Scientist, 5 October. Available at https://behavioralscientist.org/who-is-doing-applied-behavioral-science-results-from-a-global-survey-of-behavioral-teams (accessed 19 May 2023).Google Scholar
Weston, S. (1994) Toward a better understanding of the positive/normative distinction in economics. Economics & Philosophy, 10(1), 1–17.CrossRefGoogle Scholar
White, M. D. (2013) The Manipulation of Choice: Ethics and Libertarian Paternalism. New York: Palgrave Macmillan.CrossRefGoogle Scholar
Whitehead, M., Jones, R., Howell, R., Lilley, R., and Pykett, J. (2014) Nudging all over the world: assessing the impacts of the behavioural sciences on public policy, Negotiating Neuroliberalism project report. London: ESRC.Google Scholar
Young, S. (2018) Behavioural economics, in Fischer, L., Hasell, J., Proctor, J. C., Uwakwe, D., Perkins, Z. W., and Watson, C. (eds.), Rethinking Economics: An Introduction to Pluralist Economics. Abingdon: Routledge, 76–90.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×