Nudges are better for some, but not for everyone. They might lead to worse outcomes for others. If we are nudging people to save for their retirement, for example, they might save more in the account that we are nudging them towards, but save less somewhere else. So, it is not always clear whether following the nudge is actually better for them. People who are in more vulnerable economic circumstances in particular, are often affected by nudges in negative ways since they tend to be more likely to follow the default even if they don’t want to.
In research done by Ghesla et al. (2020) examples are outlined of how people switch energy providers. When you make it the default to have a contract where you get green energy instead of grey energy, and the green energy is more expensive, those people with a higher income will opt out of it when they don’t want it. If they do want it, they will opt in for green energy anyway. However, people with a lower income are much more likely to follow the default, even if they don’t want to.
Similarly, people who are in a minority group may have different preferences than those people in the majority group within a population, which might relate to cultural or other reasons. A default option or another type of nudge might be systematically to their disadvantage because it is not nudging them into what is best or desirable for them.