The Topology of Contextual Choice: Can Nudge Policy Work in the Real World?
Originally published in SSRN Working Paper
Behavioral biases are action-trajectories that lie outside the space defined by neoclassical economic theory. Economists working in nudge theory, a subfield of behavioral economics, claim that it is possible to transform undefined trajectories to trajectories in neoclassical space without deforming the object that is traversing the undefined trajectory. Using basic theorems and intuition from graph theory, we demonstrate that nudge policy for integral (fully-connected) topologies of interaction may not be meaningful for nonintegral (not fully-connected) topologies of interaction, like social networks. We believe our results have major implications for the validity of nudge-type policies.