Nudge: Improving Decisions About Health, Wealth, and Happiness

Anyone who has taken a philosophy class or studied religion is probably familiar with the concept of free choice. On the surface, it seems like a very simple question: do individuals have free choice? Your immediate reaction is probably affirmative. I have the choice to keep typing, but I also have the choice to stop typing or add unnecessary, punctuation. But as you dive deeper, things get more complicated. If we are simply atoms reacting to other atoms, what are the causes and what are the effects? On a macro (and more relatable) level, I choose what to eat for lunch everyday but why do I decide to eat foods that are undeniably bad for me? Why does the emotional side of my brain have greater sway than the logic side? What controls it? I surely don’t Nudge is about the decisions we make. Our surroundings have a bigger impact on our decision making than we are willing to admit. Simple changes to our environment can have a huge impact both positively and negatively. In this great book, Thaler and Sunstein walk us through the architectures of choice. They present the issues and provide possible solutions. From cafeterias to retirement plans to organ donors, this is a great book about how we can adjust environments to better our lives and the lives around us. Of all the books on behavioral economics I have read, this is by far the most readable. The book is filled with practical understanding of concepts. This book is not about how we can control others, but how can we make better choices. Can nudges become a problem? Absolutely. I really appreciate the libertarian paternalism presented in the book.

First some quick comments, then some longer ones: 1) Anyone interested in the Social Sciences should get this. Parts of it are written as if the book were a guide to finance, but that was probably just a marketing ploy of some sort. The main thesis is really interesting and very refreshing for those interested in the somewhat stale and oversimplified "big vs. small government" debate. 2) I read this right after Kahneman's "Thinking Fast and Slow." Both are extremely similar, but Nudge is more to the point and more organized. "Thinking Fast and Slow" was still brilliant though. 3) All those reviewers who call this "manipulation" or some other "Big Government!!!" charge, I must say, probably didn't read the book. The authors address libertarian concerns multiple times, and with great consideration, throughout the entire book. Understanding what makes "libertarian paternalism" libertarian is an extremely important step in getting the authors' main point. Honestly, if anything, it made my political views MORE libertarian rather than less, so it's difficult for me to think of Nudge as a "defense of Big Brother" or some other right-wing nonsense. 4) The only inconsistency I came across (and I mention this below) is that when they talk about being "anti-mandate," they really mean being against public or consumer mandates. However, many of their proposals do implicitly involve mandates on businesses though, such as requiring that air conditioner manufacturers install a light that would tell the user when the filter needs replacement (which would save a good amount of energy). I am not opposed to this whatsoever, but it's important to acknowledge that it's still a government mandate, so it's not as libertarian as it first seems. However, it's still more libertarian than other conceivable alternative mandates that could be placed on the public to use less energy. 5) My take-away from the book: The authors spend a good amount of time describing ECONS and HUMANS, but not so much time describing why ECONS are so important for right-wing economists. This is also partly because authors' main objective, it seemed, was political. They describe their philosophy as "libertarian paternalism." They are libertarian in the sense that they (ostensibly) don't generally like the idea of the government "banning," "mandating," and "outlawing" economic choices, or making some economic choices extremely difficult for the consumer (for example if the government made all vehicles which get less than 20 MPG twice as expensive via taxes, and mandated that a consumer must wait 90 days before being able to register a low-MPG vehicle, whereas high-MPG vehicles could be registered immediately). However, the other part of their philosophy involves "paternalism"--a very dirty word to libertarians. The basic normative argument for paternalism is that the government has some role to play in guiding people toward better choices. In talking about "libertarian paternalism," they are saying that whatever the government does, it is going to have some effects upon the population, even if it is not explicitly trying to manipulate or persuade the public. So, instead, adopt smart policies (with predictable results) that guide the public toward a "good" direction, but allow individuals to opt-out if they wish. An interesting example they brought up involved organ donors. Turns out that there are some massive inter-country differences when it comes to the desire to donate organs. But is this because the people in each country have such massively different attitudes about it? No--the main variable is a simple one: Is the default option to donate, or not to donate? In the U.S., on our licenses, we have to check a box that confirms we want to be organ donors and, therefore, our default is that we are not donors. In other countries, the default option is that citizens are donors--but of course they are free to opt-out at any time. Bringing it back to the ECONS vs. HUMANS debate is what makes a simple example like this so mind-blowing (for me, at least). The crucial key to understand is that, to the ECON, it makes no difference what the default is. The ECON always knows what s/he wants--if s/he wants to be a donor, and the default is "No," the ECON would instantly change it to "Yes," and vice versa. Simple as that. But HUMANS, on the other hand, don't do this. HUMANS have a massive, statistically proven bias toward the default option and, as a result, which route the government decides to go ends up making a massive difference. If the government decides that it's probably a "good" thing if most citizens are willing to donate vital organs, the authors argue, then it should keep the default at "Yes" and allow people to opt-out. (Notice that if the government simply mandated that everyone donate their organs, it would be paternalism outright, not libertarian paternalism.) The book is essentially a collection of examples like this, where the authors wish to enact policies that result in a better society/economy while staying true to the libertarian paternalist ethic. (One place where I think they slip a bit, though, is that they are more inclined to support "regulations" on businesses--but these regulations are of course mandates, however much they don't want to call them mandates. When they say they are against mandates, they seem to be more against regulating average citizens and consumers than regulating businesses.) As I see it, the die-hard libertarian still has a valid argument to make. Basically, they can object to the nudge argument on purely political grounds, which would sound like this, "I don't give a crap if libertarian paternalism would result in a better economy or better society. The government has no right to--i.e., shouldn't--participate in manipulative policymaking." It's a fair political argument, but it doesn't cohere with the free-market argument, which states that free-market policies will actually result in a better economy. Nudge shows how free-market policies actually won't result in a better economy, in large part because the actors receiving, evaluating, and acting upon economic signals are HUMANS, not ECONS. For those interested, I wrote an article about this type of stuff (and long before reading Nudge or much else in the way of behavioral economics) called "Unmasking the GOP's Faith-Based Economics" available @Truthout.org

Nudge by Richard H. Thaler and Cass R. Sunstein was the perfect book for someone who is not an Economist but who is interested in understanding the principals of choice architecture. Throughout the book, the authors refer to two groups of people: Econ’s and Humans. This was a refreshing way to present and re-frame the ideas throughout the book in different lights. Early on a poem is referenced titled “Smart” by Shel Silverstein and I feel like that set the scene to get my head into this work. When friends or colleagues have asked me about this book, I share the ideals of choice and the influencers and architects behind a ‘Nudge’ and I share the “Smart” poem and talk about making better choices. Learning to identify and understand the pressures (‘Nudges’) put on you as consumer helps you make decisions that are informed and uniquely beneficial. I enjoyed the Bonus Chapter 19 where ideas from other readers posted on www.nudges.org were shared. This chapter prompts you to think about and re-frame the ideas of Liberal Paternalism shared in this book from an actionable perspective. This was a thought-provoking and perspective enlarging work that touches on topics from Bias, Investing, Credit Cards, Organ Donation, Saving the Planet, School Lunches, to Marriage. Nudge was an engaging and easy to process read, even for a ‘Human’ like me.

People dont do whats in their best interest all the time. It will make you research more into finances. May be difficult for me to apply the lessons on how to influence peoples decisions but you can see enormous possibilites for those in the civil service.

Comprato per un corso universitario in Public Management. Scritto in modo assolutamente scorrevole ed a tratti anche divertente (i due autori, di cui l'ultimo premio Nobel per l' economia, si alternano, richiamano e prendono a volte in giro tra un aneddoto e l'altro). Per chi non ha mai sentito parlare dell'argomento "nudge", questo libro ne è una sorta di pietra miliare (anche all'università, corso in Public Policies, ci è stato suggerito da 3 professori diversi per 3 corsi diversi). Per chi invece già sa di cosa stiamo parlando, potrebbe risultare un po' ridondante e carente di una conclusione particolarmente illuminante rispetto alla letteratura già in circolazione. Ad ogni modo il mio consiglio per chi sente l'argomento Nudge per la prima volta, per gli entusiasti di approcci innovativi e creativi (lateral thinking) e per i curiosi in generale è "Compratelo!". Assolutamente consigliato in quanto un ottimo investimento per il vostro tempo libero (o meno, nel mio caso). E' quel tipo di lettura piacevole, su un argomento veramente interessante (ultimamente quasi di moda) capace di lasciarti un valore aggiunto. N.B. Per chi parla la lingua, consigliata la versione originale rispetto alla traduzione. Per chi non se la sente o non parla inglese, quella in Italiano è comunque un ottimo acquisto! Se siete al primo approccio e volete saperne di più, o toccare con mano. Vi consiglio di andare a curiosare su YouTube! Troverete una VALANGA di esempi di nudging in tutto il mondo. [ARGOMENTO, per chi fosse curioso di avere qualche impressione in più rispetto alla trama ufficiale: Il libro introduce al tema della "spinta gentile" (come è stata tradotta in Italia) - sarebbe quella spintarella per farti coraggio o l'incentivo per prendere una decisione. Il senso è trovare il modo tramite cui indurre le persone ad adottare comportamenti "raccomandabili" in maniera del tutto spontanea, scorrevole (che portino quindi ad un valore aggiunto per loro stessi e per la società in generale). E' ovviamente un approccio "democratico" in quanto lascia sempre libero arbitrio a chiunque ma, cambiando il modo in cui tutte le alternative sono proposte e presentate, aumenta la probabilità che la scelta propenda verso l'alternativa desiderata da "l'ideatore" o dal "public manager" (il concetto sarebbe, come già anticipato, non farlo per fini personali) . Parte da esempi quotidiani ripresi da tutto il modo (a partire dai risultati ottenuti mettendo una mosca finta dentro molti bagni pubblici maschili) per poi approcciare gradualmente a tematiche più manageriali, quali incentivi nel sistema assicurativo, per i sistemi pensionistici e così via.] Buona lettura! Giulia

This is a classic and a must have for behavioral scientists, designers and for lay readers alike. Many parts are universal and applicable in several lines of work.

Es una obra básica para entender la implementación de políticas aplicando la economía del comportamiento. Junto con “Misbehaving” y Thinking fast and slow” ofrecen un panorama comprensivo sobre esta rama de la economía.

Great book - the concept has a lot of practical applications. I purchased this for my 12 year old who had to read it for school. While he appreciated its value, some of the explanations were a little complex for him and dry.