The cover of Richard Thaler and Cass Sunstein’s book Nudge has a picture of an adult elephant gently guiding, “nudging”, its offspring along. Thaler and Sunstein cannot agree on whether the adult elephant is male or female. Thaler insists male elephants have little role in parenting, while Sunstein claims to have spotted physical evidence to the contrary in the original photo from which the drawing was taken.

If they disagree about that, they are set for an even bigger debate about what goes on the paperback. Thaler is keen to use a picture of a housefly, in recognition of what he regards as one of the best practical examples of “nudging” behaviour.

The designers of Schiphol airport in Amsterdam hit on a new idea for keeping their facilities clean. Into each of the men’s urinals they etched an image of a fly. Men, it seems, are irresistibly drawn to aiming at a target. Spillage was reduced by 80%. Other public buildings have followed suit.

“That is the exemplar of the nudge,” says Thaler. “It is a small feature of the environment that nudges people in a useful way.” There are plenty of others. Thaler likes the “look left” signs on Britain’s street crossings, a gentle reminder to pedestrians to do what is clearly in their interests.

The serious point about Nudge: Improving Decisions about Health, Wealth, and Happiness, is that it is written by two very serious people. Thaler, professor of behavioural science and economics at the University of Chicago, and Sunstein, professor of jurisprudence at the university’s highly regarded law school, are top-ranking academics.

Thaler is credited by many as being the father of behavioural economics, the subject’s fastest-growing field, which combines psychological research with economic theory. Sunstein’s work is cited more by academics than any other law professor in America. Their ideas have been taken up by policy makers, including Barack Obama’s team. On a visit to London last week, Thaler met several of David Cameron’s advisers. Cameron, as has been clear from recent speeches, is taken with the book’s central idea that it is better to “nudge” people into changing behaviour than force them.

The wordier description for what they are suggesting, says Thaler, is “libertarian paternalism”. Coming from the Chicago tradition, there is a strong libertarian strand to their thinking. Milton Friedman called one of his books Free to Choose, and freedom of choice remains essential. But there is nothing wrong, they believe, in that choice being guided, which is where the paternalism comes in.

“Libertarian paternalism would have been a good title if we had wanted nobody to buy the book,” Thaler told me over coffee last week. “One of my colleagues said this is paternalism, which is about the nastiest thing you can say to a Chicago economist. But we’re not talking about coercion here.”

What they are talking about is what is known in the jargon as “choice architecture”. In the coffee shop, Thaler muses about how its designers decided on the layout and the placing of certain products to steer us towards buying them.

The human brain has an automatic system and a reflective system. In the automatic system, we make decisions immediately, instinctively, without apparently thinking about it. In the reflective system we ponder and debate. How much better, then, if most of the choices we make could be instinctive ones. “If people can rely on their automatic systems without getting into terrible trouble, their lives should be easier, better and longer,” he says.

The first example in the book, in fact, is of a school cafeteria, and the food and drinks can be displayed to direct children towards healthier options. As he puts it: “To count as a nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not.”

Nudge is not just useful for policy wonks. Anybody keen on losing weight should note that our eating is nudged along by the people we dine with. If you eat with one other person, it seems, you will eat 35% more than when eating alone. Eating in a group of four pushes it up by 75%, while with seven or eight people your consumption will double. As they put it, either look for the thinnest person in the canteen or eat on your own.

Thaler can point to a highly successful nudge he has pioneered in the normally dry area of pensions. The problem was how to encourage people to put aside more for retirement without coercing them to do so. One easy way of nudging people is automatic enrolment into pension schemes. They still get the choice about whether they want to be in or not, but the choice is to opt out rather than to opt in. Another, pioneered by Thaler, is known as Save More Tomorrow. Once in a scheme, people’s contributions rise each year – every time their income rises, the percentage they contribute also increases.

The principle was adopted as part of America’s 2006 Pension Protection Act, where firms were given an incentive to participate by freeing them of some red tape. Nobody was forced to do anything but a third of firms have taken it up, and in time it will make a big difference to the amount Americans save for old age.

The possibilities are, however, limitless, for example in framing policies in response to climate change. In America, laws requiring firms to publish the amount of toxic substances they release had a bigger impact on cutting pollution than direct controls. Firms were embarrassed into cutting their emissions.

If high oil prices are not enough, a similar technique could be used to affect individuals’ behaviour. The Toyota Prius sells well because it is known to be green. For other vehicles there is usually a range of models, some fuel-efficient, some not so. Why not, Thaler and Sunstein suggest, require a large label on the back of vehicles giving their fuel consumption figures? Like companies, people could be embarrassed into becoming greener.

Isn’t a nudge just another name for what clever businesses have always done? “I sometimes say that if you’re a salesman then you’re a choice architect, but then you probably knew that,” he says.

The difference is applying these ideas to public policy. But doesn’t that raise similar objections to coercion by politicians or civil servants?

Thaler accepts that there will be times when policy makers steer people towards making the wrong choices. The beauty of the idea, however, is that they still have choice and can still choose to reject.

“The idea that you can nudge people is not new,” he says. “The idea that people have self-control problems goes back to Adam and Eve. What’s new is that you can use these things for good.”

Thaler is optimistic. “When we wrote this book we had the ambitious goal of taking the research that I and others had been doing for 30 years to show how it could be used to help,” he says.

“Then we had the ridiculously ambitious goal of designing a new third way, somewhere between government intervention and nonintervention. I’m beginning to think that ridiculously ambitious goal might be achievable.”

Whether it is depends partly on the politicians. “We happen to be friends of Obama’s,” he says, “but if McCain won we’d be happy to work with a McCain government.”

That’s also true in Britain. “I would love to see a battle between Cameron and Brown to see who has the better nudge platform,” he adds. Maybe he will.

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