Nudge Theory and AI Governance, Designing for Better Choices

Most approaches to AI governance rely on mandates: rules, regulations, standards, and enforcement mechanisms that require compliance. Nudge theory offers something different, a framework for designing environments in which people naturally tend toward better choices, without being told what to do.

Developed by Richard Thaler and Cass Sunstein, nudge theory draws on behavioural economics and cognitive psychology to show that the way choices are presented, the architecture of decision environments, profoundly shapes what people choose. Applied to AI governance, nudge theory asks: how do we design the systems, processes, and cultures in which AI decisions are made, so that ethical choices become the path of least resistance?

This is not a course about manipulation. It is a course about design, the deliberate, transparent construction of choice environments that support responsible AI practice.