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Nudge: Improving Decisions About Health, Wealth, and Happiness
From the winner of the 2017 Nobel Prize in Economics, Richard H. Thaler, and Cass R. Sunstein: a revelatory look at how we make decisions
New York Times bestseller
Named a Best Book of the Year by The Economist and the Financial Times
Every day we make choices—about what to buy or eat, about financial investments or our children’s health and education, even about the causes we champion or the planet itself. Unfortunately, we often choose poorly. Nudge is about how we make these choices and how we can make better ones. Using dozens of eye-opening examples and drawing on decades of behavioral science research, Nobel Prize winner Richard H. Thaler and Harvard Law School professor Cass R. Sunstein show that no choice is ever presented to us in a neutral way, and that we are all susceptible to biases that can lead us to make bad decisions. But by knowing how people think, we can use sensible “choice architecture” to nudge people toward the best decisions for ourselves, our families, and our society, without restricting our freedom of choice.
New York Times bestseller
Named a Best Book of the Year by The Economist and the Financial Times
Every day we make choices—about what to buy or eat, about financial investments or our children’s health and education, even about the causes we champion or the planet itself. Unfortunately, we often choose poorly. Nudge is about how we make these choices and how we can make better ones. Using dozens of eye-opening examples and drawing on decades of behavioral science research, Nobel Prize winner Richard H. Thaler and Harvard Law School professor Cass R. Sunstein show that no choice is ever presented to us in a neutral way, and that we are all susceptible to biases that can lead us to make bad decisions. But by knowing how people think, we can use sensible “choice architecture” to nudge people toward the best decisions for ourselves, our families, and our society, without restricting our freedom of choice.
260 pages, Paperback
First published April 8, 2008
About the author
Richard H. Thaler
17 books1,807 followersRichard H. Thaler is an American economist who was awarded the 2017 Nobel Prize in Economics.
He is the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago’s Booth School of Business, where he is the director of the Center for Decision Research. He is also the co-director (with Robert Shiller) of the Behavioral Economics Project at the National Bureau of Economic Research and in 2015 was the president of the American Economic Association. He has been published in several prominent journals and is the author of a number of books, including Misbehaving: The Making of Behavioral Economics.
He is the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago’s Booth School of Business, where he is the director of the Center for Decision Research. He is also the co-director (with Robert Shiller) of the Behavioral Economics Project at the National Bureau of Economic Research and in 2015 was the president of the American Economic Association. He has been published in several prominent journals and is the author of a number of books, including Misbehaving: The Making of Behavioral Economics.
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Displaying 1 - 30 of 4,554 reviews
October 18, 2009
I don't understand why this is a runaway bestseller--it's just not that enthralling. I've been reading lots of books lately about behavioral psychology and economics: why people make the decisions we do, economically and in other life areas. But Predictably Irrational and Made to Stick both explore these questions in a much more engaging way.
"Nudge" is mostly concerned with how companies and governments can practice what the authors term "libertarian paternalism"--gently, noncoercively pushing people toward doing something that they really want to do. For example, a company might, by default, enroll new employees in a 401K plan and put a certain salary percentage into that plan. The employees can opt out or change their contribution amount at any time, but by enrolling everyone by default, the company does an end run around its workers' natural procrastination tendencies, without forcing them into anything.
Another use of "nudging," this one on the state level, might be to require that everyone signing up for a driver's license check a box saying either "Yes, I want to be an organ donor" or "No, I don't wish to be an organ donor." Or, a state could change its laws so that people are, by default, assumed to be willing donors unless they say they don't want to. This would greatly increase the number of organs available for emergency transplants.
So, interesting stuff--but not enough to fuel an entire book. I wound up skimming quite a bit, and while some of the anecdotes are funny and interesting, many of the writers' proposals are dry unless you happen to be fascinated by the particular social or economic issue they're addressing. It's worth picking "Nudge" up to see if it grabs you; just don't be surprised if it lets go about 100 pages in.
"Nudge" is mostly concerned with how companies and governments can practice what the authors term "libertarian paternalism"--gently, noncoercively pushing people toward doing something that they really want to do. For example, a company might, by default, enroll new employees in a 401K plan and put a certain salary percentage into that plan. The employees can opt out or change their contribution amount at any time, but by enrolling everyone by default, the company does an end run around its workers' natural procrastination tendencies, without forcing them into anything.
Another use of "nudging," this one on the state level, might be to require that everyone signing up for a driver's license check a box saying either "Yes, I want to be an organ donor" or "No, I don't wish to be an organ donor." Or, a state could change its laws so that people are, by default, assumed to be willing donors unless they say they don't want to. This would greatly increase the number of organs available for emergency transplants.
So, interesting stuff--but not enough to fuel an entire book. I wound up skimming quite a bit, and while some of the anecdotes are funny and interesting, many of the writers' proposals are dry unless you happen to be fascinated by the particular social or economic issue they're addressing. It's worth picking "Nudge" up to see if it grabs you; just don't be surprised if it lets go about 100 pages in.
March 22, 2009
This one took me longer to read that is reasonable for a book of its length or the clear style it is written in. I mean, such a simply written text of 250 pages ought to have finished in no time. The problem was that I don’t live in the US and so many of the examples made the book a struggle for me. All the same, there are ideas in this book that are important no matter where you live.
Don’t you just love the internet? I wanted to start this paragraph with that quote by Göring, “when I hear the word culture I reach for my luger”, but it turns out it is actually a quote from a play by Hanns Johst which is even better, “Whenever I hear of culture I release the safety on my Browning”. I have much the same reaction when I hear the word choice. There is a false equality set up between freedom and choice. It is as if the two terms are identical. Since I’ve had to read through dozens of American examples in this book of why this identity may not always apply, I would like to give an Australian example to explain some of the key concepts of this book.
A couple of decades ago Australian workers went without a national pay increase and rather had this money directed into superannuation. Superannuation is essentially forced saving for retirement. Over the years this required percentage of an employee’s wage dedicated to superannuation has increased so that today it stands at 9%. Everyone knows that if people are to retire on anything like their current salary they need to put aside around 15% of their lifetime earnings. The gap between 9% and 15% is one that will be, for most people, borne by reduced living standards at the end of their lives.
The previous Australian Government decided that it would be a good idea to introduce ‘choice’ into the superannuation system. So whereas previously most people were corralled into mostly industry superannuation funds that were ‘not for profit’ (meaning they had low fees and profits went back into the fund), the new system opened up the superannuation business to private operators. People would now be able to ‘choose’ which fund to invest their money in. (Where did I put that Luger?)
The industry funds obviously didn’t like this idea. But like choice, competition is always a good thing and can never be criticised, right? Well, it is not quite so easy. The problem is that the industry funds asked the previous government to structure the new system so that all funds would have to disclose all fees and charges associated with their products. This would clearly have favoured the industry funds – that often don’t charge fees at all. The government refused to include this disclosure of information as a proviso in the legislation.
Of course, this made ‘freedom of choice’ a bit of a joke. You can’t really have ‘freedom’ if your choice is also based on your being ‘free’ from vital information.
What made matters worse was that the ‘financial planning’ industry in Australia isn’t as well regulated as it might be. Financial planners generally receive commissions from the financial institutions whose products they sell (oh, sorry, encourage you to take up). So, rather than providing you with a plan that is unequivocally in your best interests, the financial planner you are seeing may have (actually, will have) a strong motivation to provide you with information that is in their best financial interests, rather than yours.
Economists would say that despite all of the obvious problems with this new system of choice it is still better as people ‘always act in their own best interests as rational economic agents’ and more choice (even if some of those choices might be biased against people) is always better.
The writers of this book define themselves as Libertarian Paternalists. Essentially, they also believe that choices are good things – however, they acknowledge that choice alone isn’t enough and that people aren’t always economically rational entities.
One of the ideas I found most useful in this book is the idea of ‘choice architecture’. They do not believe in taking choices away from people, but they recognise that being presented with a bewildering array of choices is often enough to stop people from making any choice at all. The book opens with a discussion of a school cafeteria and how you can affect the eating habits of kids simply by how you place the food on display. That is, putting healthier food at eye level, rather than fatty, sugary foods, will ‘nudge’ kids towards eating more healthy food. This is not a subtle change; this ‘nudge’ can drastically improve the eating choices made by the kids. The kids still have a choice to eat rubbish, but this simple change nudges them towards eating better.
The point is that you simply don’t have the option to display the food in a ‘non-nudge’ way. You have to make some choice about how you are going to display the food – so doesn’t it make sense to set up the display so that people are nudged towards eating well, rather than badly?
Choices don’t occur in a vacuum and one of the lessons of this book is that if we are going to provide ‘choices’ we need to think about the consequences of the choice architecture we put in place in which those ‘choices’ are going to be made.
Another of those pieces of ‘choice architecture’ is going to depend on what is the default choice. This is because, people being people, many of us are going to get bored early on in the decision making process and just go for the default. Therefore, the default should be the choice that is most likely to meet the needs of those required to make the choice. There is a very disturbing discussion of the ‘Part D’ prescription drug coverage process in the US in which people who do not make what is an incredibly difficult choice are ‘randomly’ assigned to a range of default plans that takes the principle of government non-intervention to absurd extremes.
The other idea that is very strongly pushed in this book is that people are very much ‘loss averse’. This is an idea that has been in virtually every book I’ve read lately, but this book does more than most to explain the consequences of this aversion. Going back to our superannuation example, one of the reasons why people don’t increase their superannuation contributions – despite knowing that it would be good for them in the long term – is that it involves them in a perceived loss now. The authors discuss a way of encouraging higher contributions which they call the ‘pay more later’ plan. Essentially people are encouraged to commit to increasing their contributions at the time of their next pay increase. This way the increase in contributions does not feel like a loss and the authors show that this way of increasing contributions leads to higher contributions than virtually any other method.
I particularly liked their solution to the ‘gay marriage’ issue that is producing so much heat and so little light in society lately. Their answer is for the government to get out of the marriage business altogether. That the government should enable people to have their relationships recognised on the basis of it being a ‘civil union’ and that this be open to all couples, irrespective of their sex or the sex of their partner. This civil union would be the legal and social recognition of a couple’s partnership. Marriage then would be left up to religious bodies to worry about. If a particular church refuses to marry you because you want to marry someone they don’t think you should – well, find yourself another church – or even better yet, avoid churches altogether.
The last part of this book is a defence of the idea of nudges against radical free market types; the sorts of people who, like our previous government, think that choice is always good and ill-informed choice is even better. The idea that people might be nudged towards donating their organs after they’ve finished with them, nudged to eat better food or to get better health care cover or to slow down when approaching a dangerous intersection all just seem obviously good to me, so this part of the book was preaching to the converted.
But then, like Hegel, I don’t equate freedom with choice, but with needs and how we understand those needs. I think freedom has less to do with getting to choose and more to do with getting adequate information on the consequences of that choice. This book doesn’t go as far as I might along this path – but at least it recognises that we are human and that we often need help in making decisions that are in our own best interests.
…If it was up to me there would not only be no freedom of choice in superannuation, but superannuation would be a tax and would be run by the Australian Tax Office. But don’t get me started…
This would be an even more interesting book if you live in America, given the nature of the examples, but either way, this is still worth a look.
Don’t you just love the internet? I wanted to start this paragraph with that quote by Göring, “when I hear the word culture I reach for my luger”, but it turns out it is actually a quote from a play by Hanns Johst which is even better, “Whenever I hear of culture I release the safety on my Browning”. I have much the same reaction when I hear the word choice. There is a false equality set up between freedom and choice. It is as if the two terms are identical. Since I’ve had to read through dozens of American examples in this book of why this identity may not always apply, I would like to give an Australian example to explain some of the key concepts of this book.
A couple of decades ago Australian workers went without a national pay increase and rather had this money directed into superannuation. Superannuation is essentially forced saving for retirement. Over the years this required percentage of an employee’s wage dedicated to superannuation has increased so that today it stands at 9%. Everyone knows that if people are to retire on anything like their current salary they need to put aside around 15% of their lifetime earnings. The gap between 9% and 15% is one that will be, for most people, borne by reduced living standards at the end of their lives.
The previous Australian Government decided that it would be a good idea to introduce ‘choice’ into the superannuation system. So whereas previously most people were corralled into mostly industry superannuation funds that were ‘not for profit’ (meaning they had low fees and profits went back into the fund), the new system opened up the superannuation business to private operators. People would now be able to ‘choose’ which fund to invest their money in. (Where did I put that Luger?)
The industry funds obviously didn’t like this idea. But like choice, competition is always a good thing and can never be criticised, right? Well, it is not quite so easy. The problem is that the industry funds asked the previous government to structure the new system so that all funds would have to disclose all fees and charges associated with their products. This would clearly have favoured the industry funds – that often don’t charge fees at all. The government refused to include this disclosure of information as a proviso in the legislation.
Of course, this made ‘freedom of choice’ a bit of a joke. You can’t really have ‘freedom’ if your choice is also based on your being ‘free’ from vital information.
What made matters worse was that the ‘financial planning’ industry in Australia isn’t as well regulated as it might be. Financial planners generally receive commissions from the financial institutions whose products they sell (oh, sorry, encourage you to take up). So, rather than providing you with a plan that is unequivocally in your best interests, the financial planner you are seeing may have (actually, will have) a strong motivation to provide you with information that is in their best financial interests, rather than yours.
Economists would say that despite all of the obvious problems with this new system of choice it is still better as people ‘always act in their own best interests as rational economic agents’ and more choice (even if some of those choices might be biased against people) is always better.
The writers of this book define themselves as Libertarian Paternalists. Essentially, they also believe that choices are good things – however, they acknowledge that choice alone isn’t enough and that people aren’t always economically rational entities.
One of the ideas I found most useful in this book is the idea of ‘choice architecture’. They do not believe in taking choices away from people, but they recognise that being presented with a bewildering array of choices is often enough to stop people from making any choice at all. The book opens with a discussion of a school cafeteria and how you can affect the eating habits of kids simply by how you place the food on display. That is, putting healthier food at eye level, rather than fatty, sugary foods, will ‘nudge’ kids towards eating more healthy food. This is not a subtle change; this ‘nudge’ can drastically improve the eating choices made by the kids. The kids still have a choice to eat rubbish, but this simple change nudges them towards eating better.
The point is that you simply don’t have the option to display the food in a ‘non-nudge’ way. You have to make some choice about how you are going to display the food – so doesn’t it make sense to set up the display so that people are nudged towards eating well, rather than badly?
Choices don’t occur in a vacuum and one of the lessons of this book is that if we are going to provide ‘choices’ we need to think about the consequences of the choice architecture we put in place in which those ‘choices’ are going to be made.
Another of those pieces of ‘choice architecture’ is going to depend on what is the default choice. This is because, people being people, many of us are going to get bored early on in the decision making process and just go for the default. Therefore, the default should be the choice that is most likely to meet the needs of those required to make the choice. There is a very disturbing discussion of the ‘Part D’ prescription drug coverage process in the US in which people who do not make what is an incredibly difficult choice are ‘randomly’ assigned to a range of default plans that takes the principle of government non-intervention to absurd extremes.
The other idea that is very strongly pushed in this book is that people are very much ‘loss averse’. This is an idea that has been in virtually every book I’ve read lately, but this book does more than most to explain the consequences of this aversion. Going back to our superannuation example, one of the reasons why people don’t increase their superannuation contributions – despite knowing that it would be good for them in the long term – is that it involves them in a perceived loss now. The authors discuss a way of encouraging higher contributions which they call the ‘pay more later’ plan. Essentially people are encouraged to commit to increasing their contributions at the time of their next pay increase. This way the increase in contributions does not feel like a loss and the authors show that this way of increasing contributions leads to higher contributions than virtually any other method.
I particularly liked their solution to the ‘gay marriage’ issue that is producing so much heat and so little light in society lately. Their answer is for the government to get out of the marriage business altogether. That the government should enable people to have their relationships recognised on the basis of it being a ‘civil union’ and that this be open to all couples, irrespective of their sex or the sex of their partner. This civil union would be the legal and social recognition of a couple’s partnership. Marriage then would be left up to religious bodies to worry about. If a particular church refuses to marry you because you want to marry someone they don’t think you should – well, find yourself another church – or even better yet, avoid churches altogether.
The last part of this book is a defence of the idea of nudges against radical free market types; the sorts of people who, like our previous government, think that choice is always good and ill-informed choice is even better. The idea that people might be nudged towards donating their organs after they’ve finished with them, nudged to eat better food or to get better health care cover or to slow down when approaching a dangerous intersection all just seem obviously good to me, so this part of the book was preaching to the converted.
But then, like Hegel, I don’t equate freedom with choice, but with needs and how we understand those needs. I think freedom has less to do with getting to choose and more to do with getting adequate information on the consequences of that choice. This book doesn’t go as far as I might along this path – but at least it recognises that we are human and that we often need help in making decisions that are in our own best interests.
…If it was up to me there would not only be no freedom of choice in superannuation, but superannuation would be a tax and would be run by the Australian Tax Office. But don’t get me started…
This would be an even more interesting book if you live in America, given the nature of the examples, but either way, this is still worth a look.
August 4, 2018
The book has some value, but the title led me to pick it up under the belief that it might help me to understand myself better and learn better ways to navigate my choices. It turned out to be more of a laundry list of examples how businesses try to manipulate us, a list that was nudged into book-length...
January 9, 2012
This comes with a whole bunch of big name endorsements – the physicist Brian Appleyard, Stephen Leavitt (of Freakanomics fame) and we’re told by the end of Introduction that it is making an impact with Obama and Cameron and so having a policy impact in both the UK and USA. What is more, it is now marketed as a ‘new international edition’. As I ploughed my way through this I kept thinking of a comment by the great photographer Eve Arnold to the effect (and with a few more expletives) that she was not the genius many proclaimed, it was just that everyone else was so mediocre: the praise singers do themselves no favour by shouting about the marvel that this book is.
It has one central idea, grounded in social psychology, that with careful thought and planning people can be encouraged to ‘freely chose’ things that are good for them, with the corollary that too much choice or unclear choices will lead to many/most people making bad choices. So far, so good – and the first part (about ⅓) of the book does a pretty good job of explaining some interesting (but not that complex) social psychology. Alas, then the ‘new international edition’ goes off track in that, aside from a brief postscript considering some issues about the circumstances of the 2008 financial crisis, the vast majority of the examples under discussion rely on a some pretty detailed explorations of US-based material – which is a perverse understanding of ‘international’ – made all the more frustrating by Thaler & Sunstein’s jokey, blokey little self-referential asides.
Leaving aside the difficulties of behavioural economics – the first major problem with the book, though, is what is not in it and as a consequence what it is able to be used for. There is little doubt that ‘nudging’ is a good thing – we know that we are more likely to continue with decisions when we feel like we have chosen freely (the psychologists call this compliance, and it is a big thing in theories of behaviour change). The big issue for me is not how to ‘nudge well’ – but the direction in which we nudge, and so far it looks to me that the policy applications of this idea have in many cases been little more than a cover for increased privatisation, for a removal of services and social support networks and to generally undermine the social world that many of us rely on to survive.
There is a further and key deficiency related to this bigger picture of what the ‘nudges’ are used for, and that is its failure to explore the broader socio-political question of who gets to nudge us – or in their jargon, who gets to be a ‘choice architect’. For a book that has as one of its areas of application politics they seem remarkably unaware of or, more likely, are extremely good at obfuscating a key dynamic of politics – power – while at the same time having constructed a text that is all about making sure that those of us who are subject to various forms of political power (be it about health care plans, buying gas, donating organs or managing our pension funds) do what the wielders of power want us to do. Their notion of ‘libertarian paternalism’ (in many ways an oxymoron but I’ll cut them some slack because they are, after all, economists applying psychology to broader social contexts so have to grapple with two discipline areas that claim to be ‘sciences’ in an effort to assert their credibility) seems to be a synonym for ‘soft power’, so beloved of contemporary liberal imperialists. They set up two ideal type figures – Econs and Humans – and then build a text around a series of methods that enhance the likelihood that (irrational) Humans will make better decisions, where better is defined by what the (rational) Econs would do. In short, hidden within all the popularising language, this is text that is designed to promote ways to make us more like the Rational Economic Man so beloved of neo-classical economics. It is not that they want us to become more powerful people or to gain a greater degree of autonomy and control over our own lives, it is that they want to make us more compliant by making the decisions others want us to make.
So, my problem is two-fold. First, this is a book that is dangerous because it focuses only on the means and not the ends, in that the ends that seem to be taken-for-granted are those that are defined by a model and theory of economics that lies at the heart of the current crisis. Second, even if I accept that model and its theories (which I don’t) it is not that this book is wrong, just that it is disappointing. Now I admit that this may be a characteristic of these popular ‘academic’ titles and if I read more of them I’d be less disappointed – but as I continued through this I felt more and more like Eve Arnold; wearied by the mediocrity of others. I get enough of that in my own writing.
It has one central idea, grounded in social psychology, that with careful thought and planning people can be encouraged to ‘freely chose’ things that are good for them, with the corollary that too much choice or unclear choices will lead to many/most people making bad choices. So far, so good – and the first part (about ⅓) of the book does a pretty good job of explaining some interesting (but not that complex) social psychology. Alas, then the ‘new international edition’ goes off track in that, aside from a brief postscript considering some issues about the circumstances of the 2008 financial crisis, the vast majority of the examples under discussion rely on a some pretty detailed explorations of US-based material – which is a perverse understanding of ‘international’ – made all the more frustrating by Thaler & Sunstein’s jokey, blokey little self-referential asides.
Leaving aside the difficulties of behavioural economics – the first major problem with the book, though, is what is not in it and as a consequence what it is able to be used for. There is little doubt that ‘nudging’ is a good thing – we know that we are more likely to continue with decisions when we feel like we have chosen freely (the psychologists call this compliance, and it is a big thing in theories of behaviour change). The big issue for me is not how to ‘nudge well’ – but the direction in which we nudge, and so far it looks to me that the policy applications of this idea have in many cases been little more than a cover for increased privatisation, for a removal of services and social support networks and to generally undermine the social world that many of us rely on to survive.
There is a further and key deficiency related to this bigger picture of what the ‘nudges’ are used for, and that is its failure to explore the broader socio-political question of who gets to nudge us – or in their jargon, who gets to be a ‘choice architect’. For a book that has as one of its areas of application politics they seem remarkably unaware of or, more likely, are extremely good at obfuscating a key dynamic of politics – power – while at the same time having constructed a text that is all about making sure that those of us who are subject to various forms of political power (be it about health care plans, buying gas, donating organs or managing our pension funds) do what the wielders of power want us to do. Their notion of ‘libertarian paternalism’ (in many ways an oxymoron but I’ll cut them some slack because they are, after all, economists applying psychology to broader social contexts so have to grapple with two discipline areas that claim to be ‘sciences’ in an effort to assert their credibility) seems to be a synonym for ‘soft power’, so beloved of contemporary liberal imperialists. They set up two ideal type figures – Econs and Humans – and then build a text around a series of methods that enhance the likelihood that (irrational) Humans will make better decisions, where better is defined by what the (rational) Econs would do. In short, hidden within all the popularising language, this is text that is designed to promote ways to make us more like the Rational Economic Man so beloved of neo-classical economics. It is not that they want us to become more powerful people or to gain a greater degree of autonomy and control over our own lives, it is that they want to make us more compliant by making the decisions others want us to make.
So, my problem is two-fold. First, this is a book that is dangerous because it focuses only on the means and not the ends, in that the ends that seem to be taken-for-granted are those that are defined by a model and theory of economics that lies at the heart of the current crisis. Second, even if I accept that model and its theories (which I don’t) it is not that this book is wrong, just that it is disappointing. Now I admit that this may be a characteristic of these popular ‘academic’ titles and if I read more of them I’d be less disappointed – but as I continued through this I felt more and more like Eve Arnold; wearied by the mediocrity of others. I get enough of that in my own writing.
December 10, 2018
هذا كتاب مساعدة ذاتية مفيد ومهم
للحائز على نوبل في الاقتصاد
ريتشارد ثالر
أنصح به الجميع
وسأعاود الاطلاع عليه لاستخلاص مزيد من النقاط من وقت لآخر
...
January 13, 2018
December bookclub read for my sit in bookclub and when I checked in my book shop for this Book and was directed to the ECONOMICS/BUSINESS section I did quite a bit of eye rolling, I had automatically decided I wasn't going to like this book and as christmas reading goes this was going to be a taxing read. But I was pleasantly surprised at how readable and relatable the book was and how our decision making can be influenced by Nudges of all kinds and how society reacts to Nudges.
Only 3 out 10 people in the group finished the book and yet the discussion created was lively and interesting with everyone participating and having an opinion.
Not one I would be recommending but certainly a book that has food for thought.
Only 3 out 10 people in the group finished the book and yet the discussion created was lively and interesting with everyone participating and having an opinion.
Not one I would be recommending but certainly a book that has food for thought.
February 13, 2024
Highly readable and interesting how small biases can have enormous effects on everyday life
Objections to nudging perse make as much sense as being against breathing or water, even if you don’t like it, it’s all around you
Very interesting and illuminating how we are constantly being nudged as consumers and citizens. Richard H. Thaler argues that in the face of the many biases present in human nature, we should be choice architects, creating the context in which people make decisions in an optimal way, while allowing them opt-outs as well. The seemingly paradoxical term Liberatarian paternalism is chosen to underpin that nudging should be done for good, instead of being coercive. Some observations from reading Nudge: Improving Decisions About Health, Wealth, and Happiness are below.
Nudges in themselves don’t chance economic costs but do impact choices of people in a predictable way. Think of just adding a sticker that a dish is the most ordered on a restaurant menu, leading to an item being ordered even more and reducing variability of orders (and potentially also increase margins).
Default options and opt-in versus opt-out influences the choices from real humans, while they would not impact choices of the illusory homo economicus. Choice architecture is not optional, every system has some implicit and more explicit choices underpinning it, and free choice offers the best defense against bad designed systems.
Sensible shortcuts and rules of thumb can degenerate into a status quo bias and risk aversion.
Taking a lot from the work of Thinking, Fast and Slow, Thaler describes hot states (doers, system 1) versus cold states (thinkers, system 2) inside of each person. System 1 leads to many "Intranilities", moving bad outcomes to your future self.
Influence: The Psychology of Persuasion also comes back a lot, with the use of social pressure/proof enforcing conformity.
Importance of curation of choices and making feel efforts feel like fun/gamefied, which is used by choice engines, a way to typecast Booking.com and Expedia.
This has a dark side, making total, all-in prices less transparant via “sludge”,with quitting being made hard or via charging of hidden fees.
Extreme stickiness of pension fund choices, with even a fraud in Sweden leading to only 16% of people switching out of that fund is another indication that not just choice is important, but also how apathy and inertia should be accounted for.
Illogical outcomes stemming from this is for instance the fact that one has a 3 times higher chances of being in need of an organ than being a donor statistically due to the long waiting lists and with 60% dying while on the list.
Small steps can have huge impacts, like Apple’s health app registering over 6 million people in the US as an organ donor.
Objections to nudging perse make as much sense as being against breathing or water, even if you don’t like it, it’s all around you
Very interesting and illuminating how we are constantly being nudged as consumers and citizens. Richard H. Thaler argues that in the face of the many biases present in human nature, we should be choice architects, creating the context in which people make decisions in an optimal way, while allowing them opt-outs as well. The seemingly paradoxical term Liberatarian paternalism is chosen to underpin that nudging should be done for good, instead of being coercive. Some observations from reading Nudge: Improving Decisions About Health, Wealth, and Happiness are below.
Nudges in themselves don’t chance economic costs but do impact choices of people in a predictable way. Think of just adding a sticker that a dish is the most ordered on a restaurant menu, leading to an item being ordered even more and reducing variability of orders (and potentially also increase margins).
Default options and opt-in versus opt-out influences the choices from real humans, while they would not impact choices of the illusory homo economicus. Choice architecture is not optional, every system has some implicit and more explicit choices underpinning it, and free choice offers the best defense against bad designed systems.
Sensible shortcuts and rules of thumb can degenerate into a status quo bias and risk aversion.
Taking a lot from the work of Thinking, Fast and Slow, Thaler describes hot states (doers, system 1) versus cold states (thinkers, system 2) inside of each person. System 1 leads to many "Intranilities", moving bad outcomes to your future self.
Influence: The Psychology of Persuasion also comes back a lot, with the use of social pressure/proof enforcing conformity.
Importance of curation of choices and making feel efforts feel like fun/gamefied, which is used by choice engines, a way to typecast Booking.com and Expedia.
This has a dark side, making total, all-in prices less transparant via “sludge”,with quitting being made hard or via charging of hidden fees.
Extreme stickiness of pension fund choices, with even a fraud in Sweden leading to only 16% of people switching out of that fund is another indication that not just choice is important, but also how apathy and inertia should be accounted for.
Illogical outcomes stemming from this is for instance the fact that one has a 3 times higher chances of being in need of an organ than being a donor statistically due to the long waiting lists and with 60% dying while on the list.
Small steps can have huge impacts, like Apple’s health app registering over 6 million people in the US as an organ donor.
June 10, 2017
I was pleasantly surprised by this book. It starts out like many other pop psychology books, describing an array of psychology experiments that are so often in the literature. But, at some point in the book, the story takes a turn into a direction that few other books seem to touch. Nudge is really about the small, subtle pushes that our modern-day world makes to sway one's opinion or real-world choices.
The book devotes a separate chapter to each of several real-world scenarios. When a company gives employees a choice among investment plans, how should the be described? Should there be a default plan such that, if no explicit choice is made, gets chosen automatically? What about health plans--they are very complex, and is there one that is best for everyone? (Probably not.) Then there are mortgage plans, organ donation, college funds, and on and on.
People are often lazy, and they make a choice once and then forget about it. But, should a company or a government give a subtle nudge by intelligently designing a form, an intelligent default, and so on? Or should the choice be left 100% to the customer?
The authors of this book argue that libertarian paternalism may be the answer. Give people the full cast of choices, and give people the freedom to make the wrong choices. But, also give people a default choice that may be better than most of the choices.
Some choices are fixable. If you take your clothes to a dry cleaning establishment and they do a poor job, then the next time it is easily correctable; in the future just take your clothes somewhere else. But other choices are not correctable. How many chances do you have in choosing a spouse? While in theory it is a correctable choice, it is not one that my people make over and over again. And, by the way, why should the government have any say at all about marriages? If there are any government benefits to marriage, say taxes, laws, etc., why not distribute those benefits to everyone? The authors argue that there is not reason for the government to be in the marriage business at all.
This book is a quick and easy read. I recommend it to people who are trying to formulate policies and even to those who are designing forms for public use.
The book devotes a separate chapter to each of several real-world scenarios. When a company gives employees a choice among investment plans, how should the be described? Should there be a default plan such that, if no explicit choice is made, gets chosen automatically? What about health plans--they are very complex, and is there one that is best for everyone? (Probably not.) Then there are mortgage plans, organ donation, college funds, and on and on.
People are often lazy, and they make a choice once and then forget about it. But, should a company or a government give a subtle nudge by intelligently designing a form, an intelligent default, and so on? Or should the choice be left 100% to the customer?
The authors of this book argue that libertarian paternalism may be the answer. Give people the full cast of choices, and give people the freedom to make the wrong choices. But, also give people a default choice that may be better than most of the choices.
Some choices are fixable. If you take your clothes to a dry cleaning establishment and they do a poor job, then the next time it is easily correctable; in the future just take your clothes somewhere else. But other choices are not correctable. How many chances do you have in choosing a spouse? While in theory it is a correctable choice, it is not one that my people make over and over again. And, by the way, why should the government have any say at all about marriages? If there are any government benefits to marriage, say taxes, laws, etc., why not distribute those benefits to everyone? The authors argue that there is not reason for the government to be in the marriage business at all.
This book is a quick and easy read. I recommend it to people who are trying to formulate policies and even to those who are designing forms for public use.
September 21, 2010
As an economist, Nudge was a book that I desperately wanted to like. Unfortunately, I was disappointed. Perhaps my low rating of the book stems from my high expectations of a book co-authored by the well-regarded behavioral economist Richard Thaler. Without such expectations, my rating might have been higher. But at the same time, without such expectations, I might not have bothered to read the book at all.
The only interesting part of the book is the first part, which consists of the first five chapters. Here, the authors lay out the main premise of the book. The decisions humans make are affected by "nudges." Since nudges are not easy to define, they are best explained through examples. The clearest example of a nudge is a default. When you register online at a site, you are often asked, "Would you like to receive future emails?" By default this box could be either checked or not checked. The default matters; that is, different results emerge under different defaults. The main point of the book is that nudges matter and thus should be carefully designed.
The rest of the book presents a laundry list of policies to which we should apply this principle. For me, this got boring fast. For some reason, the authors seem to be obsessed with identifying every possible nudge and offering their nudge design suggestions. The end of the paperback version of the book became really ridiculous - a bonus chapter of twenty more nudges. I think that the hardcover version is saved from this madness, because the bonus chapter was added after the publication of the hardcover version.
Many may find Nudge overly political. The authors weigh in on what they believe to be good nudges on a large number of hot political issues such as Medicare and same-sex marriage. I personally didn't mind their political stances as much as I minded the lack of economics.
The book is also poorly written. I felt that the publishers gave the authors complete free reign since the authors were well-regarded academics, and obviously academics don't need editors. One problem with the writing was the lack of a targeted audience. The book is supposed to be targeted towards a mass audience; or at least, that is the target of the book's marketing efforts. It is not a textbook or standard teaching material targeted towards undergraduate economics majors. It is also not a serious academic discourse targeted towards other economists. And yet, although it's supposed to be targeted towards the layman, the writing is oftentimes confused about its audience. Additionally, I didn't care for the writing style. While I do enjoy a casual and conversational tone, this book suffered from unnecessary tangential remarks that detracted from the main point. All of the writing issues in this book could have been easily rectified with a good editor. I don't fault the authors as much as I do the publishers for that oversight.
I weakly recommend Part I of Nudge to the intellectually curious layman. The rest of the book I recommend only to those want to read a laundry list of political suggestions.
The only interesting part of the book is the first part, which consists of the first five chapters. Here, the authors lay out the main premise of the book. The decisions humans make are affected by "nudges." Since nudges are not easy to define, they are best explained through examples. The clearest example of a nudge is a default. When you register online at a site, you are often asked, "Would you like to receive future emails?" By default this box could be either checked or not checked. The default matters; that is, different results emerge under different defaults. The main point of the book is that nudges matter and thus should be carefully designed.
The rest of the book presents a laundry list of policies to which we should apply this principle. For me, this got boring fast. For some reason, the authors seem to be obsessed with identifying every possible nudge and offering their nudge design suggestions. The end of the paperback version of the book became really ridiculous - a bonus chapter of twenty more nudges. I think that the hardcover version is saved from this madness, because the bonus chapter was added after the publication of the hardcover version.
Many may find Nudge overly political. The authors weigh in on what they believe to be good nudges on a large number of hot political issues such as Medicare and same-sex marriage. I personally didn't mind their political stances as much as I minded the lack of economics.
The book is also poorly written. I felt that the publishers gave the authors complete free reign since the authors were well-regarded academics, and obviously academics don't need editors. One problem with the writing was the lack of a targeted audience. The book is supposed to be targeted towards a mass audience; or at least, that is the target of the book's marketing efforts. It is not a textbook or standard teaching material targeted towards undergraduate economics majors. It is also not a serious academic discourse targeted towards other economists. And yet, although it's supposed to be targeted towards the layman, the writing is oftentimes confused about its audience. Additionally, I didn't care for the writing style. While I do enjoy a casual and conversational tone, this book suffered from unnecessary tangential remarks that detracted from the main point. All of the writing issues in this book could have been easily rectified with a good editor. I don't fault the authors as much as I do the publishers for that oversight.
I weakly recommend Part I of Nudge to the intellectually curious layman. The rest of the book I recommend only to those want to read a laundry list of political suggestions.
November 16, 2015
Libertarians are always annoying, and these two are no exception. Their particular brand of libertarianism they call "libertarian paternalism" and it involves the idea of "nudges," which are things/designs/incentives that push people toward "better" options. "Better" options would include: choosing healthfullier food, not smoking, not driving drunk, enrolling in your company 401(k) plan vs. not enrolling, lessening your factory's carbon emissions. An example of libertarian paternalism of which they approve is requiring fast food restaurants to list calorie counts. More information to help you decide what to eat is good, they think, but banning high calorie menu items outright would constrict freedom, thus bad.
The way choices are presented to you is called "choice architecture." An example of poor choice architecture was George W. Bush's new entitlement for prescription drugs for seniors, Medicare Part D. There was an enormous number of plans, no good way to compare their various elements to see which plan would work best for you, and if you were unable to decide on a plan, one was selected at random for you. Not just seniors, but their doctors, pharmacists, and experts drafted by the authors found the "choice architecture" for Medicare Part D incredibly confusing, and picking out a plan took hours even for experts and economists.
(Another example of horrible choice architecture, or choice design, would be Palm Beach County, Florida's infamous butterfly ballot in the 2000 presidential election. Many voters couldn't tell which punch hole was designated for which candidate, and as a result voted for a candidate they had not intended to.)
The authors discuss nudges and choice architecture in the contexts of investing, health insurance, organ donation, school choice, privatizing marriage, and other areas. The most compelling chapter for me was on Medicare Part D, because I'm kind of a health insurance nerd. Weaker chapters were on school choice (the authors uncritically accept the notion that vouchers are good) and on medical malpractice insurance.
On the latter: they argue that the price of health insurance contains the cost of malpractice lawsuits, and therefore if a buyer of health insurance could waive filing such suits, their health insurance premium would be cheaper, and doctors and hospitals would also be able to charge them less. They claim that malpractice lawsuits increase medical costs by 5 to 9 per cent. First, who knows if that hazy range of numbers is accurate. Although tort reform is of course lovingly put forward by Republicans every time the issue of healthcare costs arises, the consensus among non-Republicans is that malpractice litigation costs are a tiny percentage of overall costs and not worth addressing. What bugs me more about this chapter is that the authors never bother to ask, or to address: just because the cost of lawsuits might vanish from their bottom line, why do we automatically believe that doctors and hospitals would charge a patient less, rather than take the savings as increased profit? How would having two types of health insurance policies, one where you could sue your doctor and one where you couldn't, affect the doctors themselves? Would doctors take patients from each category, or would they restrict their practices only to patients who had agreed not to sue them? If the former, would they charge different prices to the patients according to whether or not they might sue? In other words, this is interesting theoretically, but how would it work in practice? The authors don't care, because they are mostly interested in these clever theoretical notions.
The chapter on privatizing Social Security was another instance of mental masturbation. It looked at the system in Sweden, where accounts had been privatized, to see how the choice architecture had affected the way beneficiaries designed their investment plans. Yet the authors don't question whether privatizing Social Security is a good idea or a terrible idea (even though the paperback edition of the book went to press after the giant stock market crash of 2008-2009 and the book contains a postscript discussing some aspects of the crash that could have been avoided with proper nudges). They merely advise that although George W. Bush's yearning to privatize never went anywhere, "some version of this proposal is likely to be considered again before long". Well, the crash of 2008 killed all thoughts of Social Security privatization, at least until we become idiots again. Obviously, when countries and economies are run by idiots, all bets are off.
They wrap up the book with ideas presented to them, via their website, for other "nudges." The stupidest of these is trayless cafeterias (when people use trays, they tend to waste more food and napkins), which is a splendid idea for societies where people have four hands.
January 4, 2023
Nudge: Improving Decisions About Health, Wealth and Happiness by Richard H. Thaler, and Cass E. Sunstein is a book that can broaden your point of view on multiple life aspects. Indeed, this book is mind-changing. It is written by two great writers which makes it so special and unique.
October 22, 2008
This is a terrific book. The authors cover terrain which has been explored recently in a whole slew of books: loosely speaking, why we humans persistently engage in behavior patterns which do not benefit us in the long term. Their own research, at the University of Chicago, builds upon the work of Tversky and Kahneman in behavioral economics (very much in vogue this past few years).
In the book, they provide a funny, engaging, remarkably clear exposition of the various factors which lead us to make poor decisions. This alone would make it worth reading. What makes this book stand out though is that they actually suggest *remedies* that might help us save ourselves from our own flawed gut instincts.
In the book, they provide a funny, engaging, remarkably clear exposition of the various factors which lead us to make poor decisions. This alone would make it worth reading. What makes this book stand out though is that they actually suggest *remedies* that might help us save ourselves from our own flawed gut instincts.
May 18, 2013
هذا الكتاب ينقسم إلى جزئي الأول يناقش الأساس الذي يبني عليه الكاتب فكرته ونصيحته ( nudge ) والثاني هو ما يسعى فيه لإبداء النصح للحكومات والأفراد فيما يتعلق ببعض الشئون المالية والصحية والإجتماعية.
لذا كان القسم الثاني ويحتل ما يقارب ثلثي الكتاب لا فائدة منه بالنسبة للقاريء العربي مثلي، الذي لا شأن له في تقرير السياسات و القوانين.
لكن الجزء الأول من الكتاب على مدى 107 صفحات فيه الكثير من المعلومات والإشارات الجيدة و عرض لكثير من الدراسات المميزة في المجال. ويعطي للقاريء اشارات مهمة يمكن استخدامها في الحياة الشخصية و فهم الحياة العامة من حوله.
كما يعرض الكتاب لخلاصة جيدة لجهد كاهنمان وتفيرسكي مما شجعني للعودة إلى مراجعة كتاب الأول ( التفكير بسرعة وببطء) .
انصح بقراءته
لذا كان القسم الثاني ويحتل ما يقارب ثلثي الكتاب لا فائدة منه بالنسبة للقاريء العربي مثلي، الذي لا شأن له في تقرير السياسات و القوانين.
لكن الجزء الأول من الكتاب على مدى 107 صفحات فيه الكثير من المعلومات والإشارات الجيدة و عرض لكثير من الدراسات المميزة في المجال. ويعطي للقاريء اشارات مهمة يمكن استخدامها في الحياة الشخصية و فهم الحياة العامة من حوله.
كما يعرض الكتاب لخلاصة جيدة لجهد كاهنمان وتفيرسكي مما شجعني للعودة إلى مراجعة كتاب الأول ( التفكير بسرعة وببطء) .
انصح بقراءته
February 8, 2023
Nudge autoriai pasisako už libertarinį paternalizmą, kai žmonėms paliekama veiksmų laisvė, bet jie skatinami elgtis tam tikru būdu naudojant nudges. Pavyzdžiui, šalies pilečiai gali būti automatiškai įtraukiami į organų donorų sąrašą, paliekant jiems teisę prašyti išbraukti iš sąrašo. Arba automatiškai registruojami į pensijų kaupimo sistemą, leidžiant išsiregistruoti. Abiem atvejais dauguma žmonių liks donorystės programoje ar pensijų kaupimo sistemoje, ir tik jau tvirtai apsisprendusieji priims kitokį sprendimą. Taigi, libertarinio paternalizmo metodai leidžia pasirinkimų architektams pasiekti socialiai palankaus rezultato, neatimant iš žmonių pasirinkimo galimybės.
Iš pradžių autoriai susidūrė su sunkumais ieškodami, kas galėtų išleisti knygą. Tačiau po to, kai galiausiai knyga buvo išleista, vienas iš autorių gavo ekonomikos Nobelio premiją, o kitas - buvo paskirtas Obamos patarėju siekiant pritaikyti nudge metodus JAV politikoje.
Apie bihevioristinę ekonomiką teko skaityti ir kitų knygų. Tačiau ši - pirmoji apie šios srities pritaikymą politiniais tikslais. Dabar nebesipiktinsiu, kai valdžios institucijos kažkur mane automatiškai įtrauks, nes žinosiu, kad manimi rūpinasi pasirinkimų architektai.
Iš pradžių autoriai susidūrė su sunkumais ieškodami, kas galėtų išleisti knygą. Tačiau po to, kai galiausiai knyga buvo išleista, vienas iš autorių gavo ekonomikos Nobelio premiją, o kitas - buvo paskirtas Obamos patarėju siekiant pritaikyti nudge metodus JAV politikoje.
Apie bihevioristinę ekonomiką teko skaityti ir kitų knygų. Tačiau ši - pirmoji apie šios srities pritaikymą politiniais tikslais. Dabar nebesipiktinsiu, kai valdžios institucijos kažkur mane automatiškai įtrauks, nes žinosiu, kad manimi rūpinasi pasirinkimų architektai.
August 19, 2008
I second-guessed my purchase of Richard Thaler and Cass Sunstein's Nudge: Improving Decisions About Health, Wealth, and Happiness, almost the minute I received my Amazon e-mail receipt -- I had already read Malcom Gladwell's Blink, and heard about the literary disaster that is Sway, and yet there I was, reading Nudge's introduction about the arrangement of cafeteria food.
I'm glad I did. While Thaler and Sunstein are happy to revel in the small ways that their insights into "choice architecture" can lead to better or worse choices, they also lay out their political principles and detail their impact on current policy debates (e.g., Social Security, Medicare Part D, Education.) To top it all off, they begin the book with a treatment of our cognitive failings, distinguishing between our automatic and reflective processing systems (what's not to love!), leading right into their arguments for how to help the automatic majority overcome their cognitive frailty without infringing the reflective minority's ability to choose.
So what is choice architecture? Well, are you choosing out of ten choices, or 100? Are you automatically enrolled in one choice or another if you don't make an active decision? How is that default set? How is information presented to you to about the available choices? All of these questions speak to choice architecture -- in other words, the arrangement and organization of choices -- which has a nasty habit of leading individuals to choices that they themselves would not find optimal (see don't be bob bias, the mind and morality).
Furthermore, "choice architecture, both good and bad, is pervasive and unavoidable." This point is essential to Thaler and Sunstein's argument if you are a libertarian. Ignoring choice architecture won't make it go away, it will only make it more likely that the choices favored by choice architecture are more likely to be poor. For instance, you can make the default option for new employees enrolled at 5% in a 401(k) with an option to opt-out, or you can make the default option to not be enrolled (as is often the case). If you stick with the current default, many who would otherwise enjoy being enrolled will not do so because of the choice architecture. Thaler and Sunstein recommend acknowledging the importance of choice architecture and deliberately deciding on its design.
Thaler and Sunstein aren't interested in helping individuals pick out their dry cleaners; as the authors note, if a dry cleaner performs poorly, it is fairly easy for individuals to make a better decision the next team.
Rather, "people are most likely to need nudges for decision that are difficult, complex, and infrequent, and when they have poor feedback and few opportunities for learning."
Individuals are primed to make poor choices for Medicare Part D, Mortgages, and retirement investments. Thaler and Sunstein don't advocate for eliminating choices because of these problems. On the contrary, their final chapter points to the infamous "third way" -- separate from both the command-and-control left and the single-minded 'choice' monkeys of the libertarian right.
There needn't be a war between 'no choice' and 'unlimited choice.' Thaler and Sunstein spend around 250 pages explaining that this is indeed a false choice. Like myself, they side with the libertarians when it comes to the importance of choice, and side with the left when it comes to the failure of 'choice' to solve all problems. Choice is important. Coercion isn't necessary. Focus on the choice architecture.
Oh, and I have to add. As someone who has long supported responding to the gay marriage debate by taking government out of the marriage business (perhaps keeping a civil union or partnership business) and leaving it to independent churches, I was very happy to see Thaler and Sunstein put forth such an argument in Nudge.
Whether you are on the left or right, worth a read! (Taken from my post)
I'm glad I did. While Thaler and Sunstein are happy to revel in the small ways that their insights into "choice architecture" can lead to better or worse choices, they also lay out their political principles and detail their impact on current policy debates (e.g., Social Security, Medicare Part D, Education.) To top it all off, they begin the book with a treatment of our cognitive failings, distinguishing between our automatic and reflective processing systems (what's not to love!), leading right into their arguments for how to help the automatic majority overcome their cognitive frailty without infringing the reflective minority's ability to choose.
So what is choice architecture? Well, are you choosing out of ten choices, or 100? Are you automatically enrolled in one choice or another if you don't make an active decision? How is that default set? How is information presented to you to about the available choices? All of these questions speak to choice architecture -- in other words, the arrangement and organization of choices -- which has a nasty habit of leading individuals to choices that they themselves would not find optimal (see don't be bob bias, the mind and morality).
Furthermore, "choice architecture, both good and bad, is pervasive and unavoidable." This point is essential to Thaler and Sunstein's argument if you are a libertarian. Ignoring choice architecture won't make it go away, it will only make it more likely that the choices favored by choice architecture are more likely to be poor. For instance, you can make the default option for new employees enrolled at 5% in a 401(k) with an option to opt-out, or you can make the default option to not be enrolled (as is often the case). If you stick with the current default, many who would otherwise enjoy being enrolled will not do so because of the choice architecture. Thaler and Sunstein recommend acknowledging the importance of choice architecture and deliberately deciding on its design.
Thaler and Sunstein aren't interested in helping individuals pick out their dry cleaners; as the authors note, if a dry cleaner performs poorly, it is fairly easy for individuals to make a better decision the next team.
Rather, "people are most likely to need nudges for decision that are difficult, complex, and infrequent, and when they have poor feedback and few opportunities for learning."
Individuals are primed to make poor choices for Medicare Part D, Mortgages, and retirement investments. Thaler and Sunstein don't advocate for eliminating choices because of these problems. On the contrary, their final chapter points to the infamous "third way" -- separate from both the command-and-control left and the single-minded 'choice' monkeys of the libertarian right.
There needn't be a war between 'no choice' and 'unlimited choice.' Thaler and Sunstein spend around 250 pages explaining that this is indeed a false choice. Like myself, they side with the libertarians when it comes to the importance of choice, and side with the left when it comes to the failure of 'choice' to solve all problems. Choice is important. Coercion isn't necessary. Focus on the choice architecture.
Oh, and I have to add. As someone who has long supported responding to the gay marriage debate by taking government out of the marriage business (perhaps keeping a civil union or partnership business) and leaving it to independent churches, I was very happy to see Thaler and Sunstein put forth such an argument in Nudge.
Whether you are on the left or right, worth a read! (Taken from my post)
September 19, 2021
ما بیشتر اوقات برای تصمیمگیریهامون از سیستم خودکار استفاده میکنیم و متاسفانه این باعث میشه که تصمیمگیریهامون بی منطق و اشتباه بشه.
این کتاب از دیدگاههای متفاوت در مورد محدودیت استدلال ماها موقع تصمیمگیریهامون صحبت میکنه و با معرفی سیستم گوشزد و پیشفرضها راهکارهایی بهمون میده تا بتونیم جلوی این اشتباهات رو بگیریم.
و جذاب ترین بخشش معماری انتخاب های دیگرانه در حوزه های مختلفه که علاوه بر کاربرد در تصمیم گیری های سیاسی و تجاری در زندگی شخصی نیز کاربرد داره واقعا کتاب جذابی بود
این کتاب از دیدگاههای متفاوت در مورد محدودیت استدلال ماها موقع تصمیمگیریهامون صحبت میکنه و با معرفی سیستم گوشزد و پیشفرضها راهکارهایی بهمون میده تا بتونیم جلوی این اشتباهات رو بگیریم.
و جذاب ترین بخشش معماری انتخاب های دیگرانه در حوزه های مختلفه که علاوه بر کاربرد در تصمیم گیری های سیاسی و تجاری در زندگی شخصی نیز کاربرد داره واقعا کتاب جذابی بود
October 1, 2022
Change is hard, yet there are things that can make it easier – or more difficult. I don't buy potato chips, as I can't just eat just one, and a quart of ice cream sitting quietly in my freezer is not quiet and, instead, seems to scream my name.
There are also things that we can do at the institutional or governmental level to facilitate good decision-making. Absence of intentional influence is not the same as no influence.
Nudge: Improving Decisions about Health, Wealth, and Happiness was written by Richard Thaler, who won the Nobel Prize in Economics, and Cass Sunstein, an attorney and director of Harvard's Program on Behavioral Economics and Public Policy. Both come from the school of thought, behavioral economics, which believes that we are not Econs (rational beings slavishly following economic principles), but Humans. We Humans are often misled by cognitive and perceptual biases, overconfident about our abilities (most of us believe ourselves above average), and loss averse in irrational ways. Fundamentally, we are not Computers, but irrational beings.
We are also beings faced with making many very difficult decisions: choosing health insurance plans, saving energy (and the planet), eating in health-promoting ways, investing wisely, and choosing a home mortgage are among the choices discussed in Nudge.
Thaler and Sunstein describe themselves as libertarian paternalists. They want to preserve choice and the freedom to choose (libertarian), while also believing "it is legitimate for choice architects to try to influence people’s behavior in order to make their lives longer, healthier, and better" (p. 5). Nudges are helpful, but Thaler and Sunstein believe we should be allowed to ignore nudges.
Better governance requires less in the way of government coercion and constraint, and more in the way of freedom to choose. If incentives and nudges replace requirements and bans, government will be both smaller and more modest. So, to be clear: we are not for bigger government, just for better governance. (p. 14)
Here are places where a nudge might be useful. Rather than making me make my retirement choice at random – should I contribute more to stocks or mutual funds? – why not recommend an option based on my age at hire, the number of years I expect to work, and the degree of risk I believe acceptable? When my employer annually asks me what charities I would like to automatically donate to, why not repopulate these fields with last year's choices (my employer leaves these blank)? I could still change my charities or amounts donated. Why not tell my parents which prescription drug plan would be best for them based on their current medications, expected future health, and willingness to accept risk? Why not tell college students that they tend to overestimate the amount that other students drink, thus drinking more themselves?
Although I was curious about the various kinds of nudges that Thaler and Sunstein would prescribe, I was also interested in their descriptions of politics, especially as I have been confused and dismayed by our present administration and why they attracted any votes. I haven't found Jonathon Haidt's books on political values terribly convincing or helpful. Thaler and Sunstein helped:
Democratic Party has shown a great deal of enthusiasm for rigid national requirements and for command-and-control regulation. Having identified serious problems in the private market, Democrats have often insisted on firm mandates, typically eliminating or at least reducing freedom of choice. Republicans have responded that such mandates are often uninformed or counterproductive—and that in light of the sheer diversity of Americans, one size cannot possibly fit all. (pp. 255-256)
Of course, Thaler and Sunstein are right, but also wrong. Democrats put limits on pollution; increase taxes to support education, the arts, and anti-poverty programs; and support gun control and affirmative action. Although Republicans want no part of the above – at least as Democrats frame solutions – Republicans focus on other types of control, more social as opposed to environmental (e.g., abortion, feminist issues, stem cell research, three strikes prison terms).
In other words, Thaler and Sunstein's delineation doesn't really hold up.
In sum, though, Nudge was clear, interesting, and helpful. Time well used.
There are also things that we can do at the institutional or governmental level to facilitate good decision-making. Absence of intentional influence is not the same as no influence.
Nudge: Improving Decisions about Health, Wealth, and Happiness was written by Richard Thaler, who won the Nobel Prize in Economics, and Cass Sunstein, an attorney and director of Harvard's Program on Behavioral Economics and Public Policy. Both come from the school of thought, behavioral economics, which believes that we are not Econs (rational beings slavishly following economic principles), but Humans. We Humans are often misled by cognitive and perceptual biases, overconfident about our abilities (most of us believe ourselves above average), and loss averse in irrational ways. Fundamentally, we are not Computers, but irrational beings.
We are also beings faced with making many very difficult decisions: choosing health insurance plans, saving energy (and the planet), eating in health-promoting ways, investing wisely, and choosing a home mortgage are among the choices discussed in Nudge.
Thaler and Sunstein describe themselves as libertarian paternalists. They want to preserve choice and the freedom to choose (libertarian), while also believing "it is legitimate for choice architects to try to influence people’s behavior in order to make their lives longer, healthier, and better" (p. 5). Nudges are helpful, but Thaler and Sunstein believe we should be allowed to ignore nudges.
Better governance requires less in the way of government coercion and constraint, and more in the way of freedom to choose. If incentives and nudges replace requirements and bans, government will be both smaller and more modest. So, to be clear: we are not for bigger government, just for better governance. (p. 14)
Here are places where a nudge might be useful. Rather than making me make my retirement choice at random – should I contribute more to stocks or mutual funds? – why not recommend an option based on my age at hire, the number of years I expect to work, and the degree of risk I believe acceptable? When my employer annually asks me what charities I would like to automatically donate to, why not repopulate these fields with last year's choices (my employer leaves these blank)? I could still change my charities or amounts donated. Why not tell my parents which prescription drug plan would be best for them based on their current medications, expected future health, and willingness to accept risk? Why not tell college students that they tend to overestimate the amount that other students drink, thus drinking more themselves?
Although I was curious about the various kinds of nudges that Thaler and Sunstein would prescribe, I was also interested in their descriptions of politics, especially as I have been confused and dismayed by our present administration and why they attracted any votes. I haven't found Jonathon Haidt's books on political values terribly convincing or helpful. Thaler and Sunstein helped:
Democratic Party has shown a great deal of enthusiasm for rigid national requirements and for command-and-control regulation. Having identified serious problems in the private market, Democrats have often insisted on firm mandates, typically eliminating or at least reducing freedom of choice. Republicans have responded that such mandates are often uninformed or counterproductive—and that in light of the sheer diversity of Americans, one size cannot possibly fit all. (pp. 255-256)
Of course, Thaler and Sunstein are right, but also wrong. Democrats put limits on pollution; increase taxes to support education, the arts, and anti-poverty programs; and support gun control and affirmative action. Although Republicans want no part of the above – at least as Democrats frame solutions – Republicans focus on other types of control, more social as opposed to environmental (e.g., abortion, feminist issues, stem cell research, three strikes prison terms).
In other words, Thaler and Sunstein's delineation doesn't really hold up.
In sum, though, Nudge was clear, interesting, and helpful. Time well used.
May 6, 2012
It would be unfair to label Nudge as 'one of those pop-psychology books' as a. I frown on pop psychology and rate Nudge higher, and b. I'm trying not to generalise.
What I'm trying to say is Nudge fits into the same category as other insightful books such as Gladwell's Blink, or the recent Redirect
[[ASIN:0316010669 Blink: The Power of Thinking Without Thinking]]
[[ASIN:0316051888 Redirect: The Surprising New Science of Psychological Change]]
Beginning with a non-partisan disclaimer Nudge explores the concept of choice architecture: essentially controlling the environment in which people make choices to encourage well-being without directly controlling peoples choice.
Like most insightful type books, Nudge occasionally errs from actually discussing Nudge's and becoming the author's expression of 'how things should be in the world' but is an enjoyable and balanced read nonetheless.
Highlights include The author's discussion of the affects of medical liability insurance, and the privatisation of marriage, but issues from environmentalism and eating peanuts at a party are also included.
Much recommended for anyone wanting to think about politics and interventions a little differently.
What I'm trying to say is Nudge fits into the same category as other insightful books such as Gladwell's Blink, or the recent Redirect
[[ASIN:0316010669 Blink: The Power of Thinking Without Thinking]]
[[ASIN:0316051888 Redirect: The Surprising New Science of Psychological Change]]
Beginning with a non-partisan disclaimer Nudge explores the concept of choice architecture: essentially controlling the environment in which people make choices to encourage well-being without directly controlling peoples choice.
Like most insightful type books, Nudge occasionally errs from actually discussing Nudge's and becoming the author's expression of 'how things should be in the world' but is an enjoyable and balanced read nonetheless.
Highlights include The author's discussion of the affects of medical liability insurance, and the privatisation of marriage, but issues from environmentalism and eating peanuts at a party are also included.
Much recommended for anyone wanting to think about politics and interventions a little differently.
August 2, 2023
I was very familiar with most of the ideas in Nudge from reading many of the underlying papers that Cass Sunstein and Dick Thaler draw on and that they themselves wrote plus from working in public policy and lots of conversations. But I had never read the actual book and thought I should finally get around to it.
I can see why it was such a hit. It is a true joy to read. The authors enthusiasm, humor, good intentions, and personalities show through, including the many anecdotes about both of them that are used to illustrate their points. It also does a delightful job of wearing its erudition lightly while breezily covering a wide range of behavioral economics, public policy and deeper dives into a few discrete public policy areas (including retirement savings, organ donations and climate change). Aficionados of this area will not learn a huge amount new but that is partly because of the success of the authors in conveying the ideas in so many ways.
As a matter of public policy or company behavior there is little downside to the Nudge approach. The authors are very clear that Nudges can and are used both for good and for bad, they’re not automatically good. Sure libertarians worry about a slippery slope to something more like a shove while liberals worry that it will turn into a substitute for times when shoving is truly necessary. But choice architecture is unavoidable, it should be done intentionally.
The bigger issue is how large the upside is. The authors are very enthusiastic about the upside and cite specific research and examples to back that up. I remain somewhat less convinced. The only truly large intervention in the economic space is automatic enrollment (and sometimes escalation and investment) in 401(k)s. Of the major economic policy developments in the last decades, including the Affordable Care Act, various fiscal plans, evolution in antitrust, etc. etc., Nudging takes a backseat to mandates, subsidies, and taxes. This is not a criticism of the approach, see the previous paragraph, just a sizing of its consequences.
Finally, I wished the book did more to explore some of the difficult cases and delineate where nudges are appropriate and where other remedies are needed. Some of this comes through, particularly in the very subtle, thoughtful and persuasive discussion of organ donation (they’re in favor of “prompted choice” that encourages and makes it easy for people to opt in rather than “presumed consent” that people can opt out of) and climate change. But it never systematically enunciates the principles that tell policymakers when to use what tool. And it only addresses issues where the behavioral mistake people are making is consistent with social goals (e.g., people eat more than they want to, nudging them can help save them money while helping society) but does not address the harder cases where they are not aligned (e.g., how to do automatic enrollment in health plans for young healthy people when they might want to select a plan that is good for them but society would rather they default into pooling with sicker people).
The book is labelled “Final Edition,” which the authors describe as a commitment device to avoid doing another edition. But whether or not they do they both have many, many more contribution in lots of other forms—so maybe we’ll even get more medium- and large-sized interventions. Until then it is well worth being intentional about getting even the smaller ones right.
I can see why it was such a hit. It is a true joy to read. The authors enthusiasm, humor, good intentions, and personalities show through, including the many anecdotes about both of them that are used to illustrate their points. It also does a delightful job of wearing its erudition lightly while breezily covering a wide range of behavioral economics, public policy and deeper dives into a few discrete public policy areas (including retirement savings, organ donations and climate change). Aficionados of this area will not learn a huge amount new but that is partly because of the success of the authors in conveying the ideas in so many ways.
As a matter of public policy or company behavior there is little downside to the Nudge approach. The authors are very clear that Nudges can and are used both for good and for bad, they’re not automatically good. Sure libertarians worry about a slippery slope to something more like a shove while liberals worry that it will turn into a substitute for times when shoving is truly necessary. But choice architecture is unavoidable, it should be done intentionally.
The bigger issue is how large the upside is. The authors are very enthusiastic about the upside and cite specific research and examples to back that up. I remain somewhat less convinced. The only truly large intervention in the economic space is automatic enrollment (and sometimes escalation and investment) in 401(k)s. Of the major economic policy developments in the last decades, including the Affordable Care Act, various fiscal plans, evolution in antitrust, etc. etc., Nudging takes a backseat to mandates, subsidies, and taxes. This is not a criticism of the approach, see the previous paragraph, just a sizing of its consequences.
Finally, I wished the book did more to explore some of the difficult cases and delineate where nudges are appropriate and where other remedies are needed. Some of this comes through, particularly in the very subtle, thoughtful and persuasive discussion of organ donation (they’re in favor of “prompted choice” that encourages and makes it easy for people to opt in rather than “presumed consent” that people can opt out of) and climate change. But it never systematically enunciates the principles that tell policymakers when to use what tool. And it only addresses issues where the behavioral mistake people are making is consistent with social goals (e.g., people eat more than they want to, nudging them can help save them money while helping society) but does not address the harder cases where they are not aligned (e.g., how to do automatic enrollment in health plans for young healthy people when they might want to select a plan that is good for them but society would rather they default into pooling with sicker people).
The book is labelled “Final Edition,” which the authors describe as a commitment device to avoid doing another edition. But whether or not they do they both have many, many more contribution in lots of other forms—so maybe we’ll even get more medium- and large-sized interventions. Until then it is well worth being intentional about getting even the smaller ones right.
October 17, 2012
Loy Machedo’s Book Review – Nudge by Richard H. Thaler and Cass R. Sunstein
I love reading book.
Books on Thought-Provoking, Critical-Thinking, Cognitive Science, Business, Biographies, Self-Improvement and so on. But the most important characteristic I admire and love about a book, is its ability to make something simple and understandable.
Nudge is one book that fails to qualify the last criteria.
I presumed that this book was in relation to how we think, how the mind works and connect that to either the economy or money - More like Steven D. Levitt’s Freaknomics or Malcolm Gladwell’s The Tipping Point or the Outliners. However, this book turned out to be a blue-print that most probably only someone from United States would relate to – as most of the content in between was all about 401K’s, Taxes and other stuff that I don’t find appealing at all.
Now, these are what I felt the authors tried to do:
1) Cover a lot of ground without being deep.
2) Cherry Picked popular points of Psychology and Influence which have been covered by other authors and streamline them into this book (the smiley face technique, public statement on losing weight, the paradox of choice, peoples inability to explain why they do what they do etc.)
3) And then bring in taxes, organ donation, medical insurance plans (that was never ending), privatizing marriages, political decisions, social security and its benefits, libertarian paternalism – and well the list goes on.
By the time I reached the book half way, from loving the book, I began hating the book. I honestly could not bear to read it. And then I struggled to complete it. Predominately, it was the Political theories they had in place that totally put me off. I mean why can’t you stick to either a) Politics or b) How the Mind works?
Personally, I feel the authors tried to replicate and combine a style of what Freakonomics (Dubner and Levitt), Predictably Irrational (Dan Ariely), Influence (Robert Cialdini) and Tipping Point (Malcolm Gladwell) all have done and ended up messing up a good book.
Overall Summary
A confusing book that miscommunicates to the read what the book is about. The Authors tried to be everything to everyone and ended up being nothing to no one. In my opinion, I feel there are two books here and the Authors need to divide these two books, make them two separate titles and sell them to two different audience groups. Otherwise, they will end up having more people give negative feedback to this book than positive.
Overall Ratings
0 out of 10
That was my opinion and feel for this book as I found nothing of value that I could use or didn’t know off from other authors.
March 26, 2017
Even though it has a very valuable core idea, it was a very difficult read for multiple reasons.
It's way too verbose and way too American.
I was expecting universal personality nudges, not american health industry changes that politicians should do, or 401k changes that Americans should consider, or the Boston system for choosing schools, or how you should allocate your stocks and bonds.
And all these in separate, excruciatingly long and detailed chapters, outlining history and unrelated details, that don't apply to the rest of the world.
Or maybe they do, because the authors did mention other countries as good (Sweden, Finland, Netherlands) or bad (Romania, my home country) examples. However, they were rather used as contrast between countries; what I wanted was contrast between people/behaviors.
The good part can probably be summed up in a few simple sentences:
* most big problems have relatively small weak spots
* find the weak spot and only attack that, not the whole monster
* if you focus on that, big changes are possible
The book could have come up with more real-life examples for this point.
It's way too verbose and way too American.
I was expecting universal personality nudges, not american health industry changes that politicians should do, or 401k changes that Americans should consider, or the Boston system for choosing schools, or how you should allocate your stocks and bonds.
And all these in separate, excruciatingly long and detailed chapters, outlining history and unrelated details, that don't apply to the rest of the world.
Or maybe they do, because the authors did mention other countries as good (Sweden, Finland, Netherlands) or bad (Romania, my home country) examples. However, they were rather used as contrast between countries; what I wanted was contrast between people/behaviors.
The good part can probably be summed up in a few simple sentences:
* most big problems have relatively small weak spots
* find the weak spot and only attack that, not the whole monster
* if you focus on that, big changes are possible
The book could have come up with more real-life examples for this point.
October 29, 2010
This is not a well-written book. The writing is prosaic. The pacing is meh. You will almost certainly have no trouble putting it down. It is, however, a book almost everyone should read - especially politicians, technocrats, and others in positions of public policy.
Sunstein and Thaler argue that dramatic changes in human behavior can be effected through sensible changes in "choice architecture". Choice architecture is the orchestration of options. It can range from how choices are presented (make the broccoli easy to reach and in sight, but put the double fudge cake on the bottom shelf), to default options (make retirement plans opt-out, rather than opt-in), to a wide variety of other "nudges".
Nudge presents a copious amounts of data from psychology and behavioral economics. It supplements these with examples of successful and unsuccessful choice architecture. Only the most obstinate and orthodox could read this book and not come away convinced that subtle, inexpensive reforms are capable of achieving dramatic, positive changes.
Perhaps the most exciting thing about Nudge is that the reforms it proffers are bipartisan. Give people more information about the choices they make? Set defaults that are the best for everyone? Give people feedback about how efficient and effective their decisions are? The only people who can be against these ideas are those with a vested interests in an ignorant or otherwise misled populace.
The only question I'm left asking is: why aren't more of these changes happening?
Sunstein and Thaler argue that dramatic changes in human behavior can be effected through sensible changes in "choice architecture". Choice architecture is the orchestration of options. It can range from how choices are presented (make the broccoli easy to reach and in sight, but put the double fudge cake on the bottom shelf), to default options (make retirement plans opt-out, rather than opt-in), to a wide variety of other "nudges".
Nudge presents a copious amounts of data from psychology and behavioral economics. It supplements these with examples of successful and unsuccessful choice architecture. Only the most obstinate and orthodox could read this book and not come away convinced that subtle, inexpensive reforms are capable of achieving dramatic, positive changes.
Perhaps the most exciting thing about Nudge is that the reforms it proffers are bipartisan. Give people more information about the choices they make? Set defaults that are the best for everyone? Give people feedback about how efficient and effective their decisions are? The only people who can be against these ideas are those with a vested interests in an ignorant or otherwise misled populace.
The only question I'm left asking is: why aren't more of these changes happening?
January 1, 2019
It’s the first day of 2019, and I’m writing an addendum to the first review I wrote of this book in 2013 (see below).
Although this is a tedious read. In retrospect, this book, as well as Khanaman’s Thinking Fast and Slow remain profoundly influential on my work as a therapist.
So, I feel obliged to upgrade this from a 4 to 5 star review (with an asterisk)
The important takeaway of the book is that the environment (home, work, school, the DMV etc.) has a WAY bigger effect on our behavior than we commonly understand.
Sometimes it’s easier to modify the environment, than to modify the person.
Additionally, we should be crafting our environments to elicit the types of behaviors we would like to emit.
I always say, it’s easier to choose not to eat chocolate chip cookies if there aren’t any in the house, and you have plenty of good healthy food to eat.
That sounds banal in that context, but when applied to other issues from organ donation, to saving for retirement, to recovery from addiction, the point is somewhat less obvi.
So without further ado.
Here’s the original 2013 review:
I finally finished this fascinating (yet oddly boring) book! It took a while -it sat on my currently reading list for around 3 months before I finally caved to the guilt and finished the damn thing- but finish it I did. Here's some reflections.....
Traditional economic theory assumes that consumers are rational and self interested agents that make decisions based on the facts. The findings of experimental behavioral economics paint a very different picture. For example; If given a choice between a hamburger that is 10% lean or 90% fat, traditional economic theory predicts that consumers (being rational) will be indifferent because both products are in fact identical. But behavioral economics observes that real people nearly invariably prefer one to the other.
The authors of Nudge (economist Richard Thaler and legal scholar Cass Sunstein posit that human decision making is divided between two cognitive systems; the "Reflective System" and the "Automatic System". The Reflective System is deliberate and accurate but is slower to become involved in the decision process. The Automatic System is fast but inaccurate due to the fact that it operates primarily on the basses of reflexive, innate cognitive biases and heuristics which work well on average, but fail in certain predictable ways.
Thaler and Sunstein build their central argument upon the deceptively simple observation that; the way in which choices are presented effects the choices that people make. Thaler and Sunstein refer to people that design menus of choices as "choice architects" e.g. mortgage brokers, advertisers, web designers etc. Nudges are little design tweaks in the choosing environment that correct for those cognitive biases that reliably lead modern humans to make bad decisions.
Thaler and Sunstein advocate an approach to choice architecture, which they refer to as libertarian paternalism, that "nudges" consumers to make good choices without unnecessarily limiting their individual freedom. For example, people who wish to become organ donors "opt in" to the organ donation program. Libertarian paternalism advocates making organ donation the default, unless people opt out, thereby raising life saving organ donation rates, while still allowing individuals who object to opt out if they wish.
I have to say that there is something very attractive to me about this approach. It utilizes the powerful techniques of design, public relations and advertising, combined with the insights of psychology and other social sciences, to create choosing environments that result in (lazy) people (like me) making good (or at least better) choices. I love the fact that you're still free to be a dick, but you have to work for it. There's something so right about that!
===
As previously mentioned, I’m upgrading my review from 4 stars (2013) to five stars with an asterisk because it’s a bit of a snore (2019) because of the enduring impact the book has had on my life and work.
⭐️⭐️⭐️⭐️⭐️*
Live=Learn!!!!!!
Although this is a tedious read. In retrospect, this book, as well as Khanaman’s Thinking Fast and Slow remain profoundly influential on my work as a therapist.
So, I feel obliged to upgrade this from a 4 to 5 star review (with an asterisk)
The important takeaway of the book is that the environment (home, work, school, the DMV etc.) has a WAY bigger effect on our behavior than we commonly understand.
Sometimes it’s easier to modify the environment, than to modify the person.
Additionally, we should be crafting our environments to elicit the types of behaviors we would like to emit.
I always say, it’s easier to choose not to eat chocolate chip cookies if there aren’t any in the house, and you have plenty of good healthy food to eat.
That sounds banal in that context, but when applied to other issues from organ donation, to saving for retirement, to recovery from addiction, the point is somewhat less obvi.
So without further ado.
Here’s the original 2013 review:
I finally finished this fascinating (yet oddly boring) book! It took a while -it sat on my currently reading list for around 3 months before I finally caved to the guilt and finished the damn thing- but finish it I did. Here's some reflections.....
Traditional economic theory assumes that consumers are rational and self interested agents that make decisions based on the facts. The findings of experimental behavioral economics paint a very different picture. For example; If given a choice between a hamburger that is 10% lean or 90% fat, traditional economic theory predicts that consumers (being rational) will be indifferent because both products are in fact identical. But behavioral economics observes that real people nearly invariably prefer one to the other.
The authors of Nudge (economist Richard Thaler and legal scholar Cass Sunstein posit that human decision making is divided between two cognitive systems; the "Reflective System" and the "Automatic System". The Reflective System is deliberate and accurate but is slower to become involved in the decision process. The Automatic System is fast but inaccurate due to the fact that it operates primarily on the basses of reflexive, innate cognitive biases and heuristics which work well on average, but fail in certain predictable ways.
Thaler and Sunstein build their central argument upon the deceptively simple observation that; the way in which choices are presented effects the choices that people make. Thaler and Sunstein refer to people that design menus of choices as "choice architects" e.g. mortgage brokers, advertisers, web designers etc. Nudges are little design tweaks in the choosing environment that correct for those cognitive biases that reliably lead modern humans to make bad decisions.
Thaler and Sunstein advocate an approach to choice architecture, which they refer to as libertarian paternalism, that "nudges" consumers to make good choices without unnecessarily limiting their individual freedom. For example, people who wish to become organ donors "opt in" to the organ donation program. Libertarian paternalism advocates making organ donation the default, unless people opt out, thereby raising life saving organ donation rates, while still allowing individuals who object to opt out if they wish.
I have to say that there is something very attractive to me about this approach. It utilizes the powerful techniques of design, public relations and advertising, combined with the insights of psychology and other social sciences, to create choosing environments that result in (lazy) people (like me) making good (or at least better) choices. I love the fact that you're still free to be a dick, but you have to work for it. There's something so right about that!
===
As previously mentioned, I’m upgrading my review from 4 stars (2013) to five stars with an asterisk because it’s a bit of a snore (2019) because of the enduring impact the book has had on my life and work.
⭐️⭐️⭐️⭐️⭐️*
Live=Learn!!!!!!
May 20, 2018
This is an excellent book if you go into it with a little bit of an open mind. It will challenge many of your fundamental beliefs and principles. And while it might have not changed my core beliefs about supporting quality public education and gay marriage, it still provided a very solid argument to understand the opposing views. I believe everyone will find something on which to be challenged and at times offended. That will apply more so to the liberals than the conservatives. There were a few sections that I found not only disagreeable but quite honestly repulsive and wrong. There is in particular one section. In that, the authors propose an idea for engineering a society that can both allow gay marriage but also allow for a literal interpretation of religious texts. Their solution is to not call the union a marriage anymore. They argue that on every legal document such union should be referred to as a civil union. If you believe in equality for all people, you will on principle disagree with this section. But it shouldn’t stop you from enjoying the rest of the material.
The two authors introduce a few interesting concepts. A “nudge” is a small behavior trigger that encourages humans to make a more correct decision. A nudge can be as simple as placing a fly sticker in a urinal so men aim for that to reduce spill. The authors also talk about humans vs econs. An econ is the perfect human if humans could always make rational choices. A human on the other hand, is irrational, arrogant, forgetful and in most cases uninformed. But the human in their view is manipulable. So they argue that a nudge can guide a human to make the rational choice. To make this idea palatable to the conservatives, they introduce the concept of libertarian paternalism. Which they argue means allowing for freedom of choice and personal rights while nudging the uninformed, the non econ, the human, to the right direction. A nudge can be as simple as placing that fly sticker in the urinal, or selecting a good default plan for people’s retirement accounts. But a nudge can also be as grandiose as not allowing people to enter a marriage without a prenuptial agreement. Depending on where you are on the “Free to Choose” scale your blood might be boiling at this point but again keep an open mind and continue reading the book. You will be challenged but you will learn too.
The book is dense and you need a lot of will power and mental stamina to get through it. Each section has at least one anecdote to surprise you, perhaps we can call them “huh inspiring”. And this book is full of huh inspiring sections. That for me was very enjoyable. As for the format, the book is what you would expect when an economist and a lawyer collaborate. It is long, detailed and at times reads like a rental lease agreement. What I am saying is that this can be like a textbook but stay strong and positive.
The book eases you into the theory of nudging. It starts by providing interesting examples of nudges in everyday life. These chapters might be very applicable for those who design products or architect a service. The middle sections is solely dedicated to personal finance. There is a lot to learn there for every adult. The final section is mostly about applying the nudge theory to a larger society. This part was in fact the most memorable part for me and the most unsettling. That said, I found all of the presented arguments to be very well crafted and thought through. In fact, as a thought exercise I tried to come up with better proposal but at the end I almost always ended up agreeing with what they presented. Richard Thaler is a Noble laureate and a former adviser to Barak Obama but he has also worked in republican think tanks so what you get here reads more like a policy mandate than a book but it should not stop you from enjoying the ocean of ideas in there.
The two authors introduce a few interesting concepts. A “nudge” is a small behavior trigger that encourages humans to make a more correct decision. A nudge can be as simple as placing a fly sticker in a urinal so men aim for that to reduce spill. The authors also talk about humans vs econs. An econ is the perfect human if humans could always make rational choices. A human on the other hand, is irrational, arrogant, forgetful and in most cases uninformed. But the human in their view is manipulable. So they argue that a nudge can guide a human to make the rational choice. To make this idea palatable to the conservatives, they introduce the concept of libertarian paternalism. Which they argue means allowing for freedom of choice and personal rights while nudging the uninformed, the non econ, the human, to the right direction. A nudge can be as simple as placing that fly sticker in the urinal, or selecting a good default plan for people’s retirement accounts. But a nudge can also be as grandiose as not allowing people to enter a marriage without a prenuptial agreement. Depending on where you are on the “Free to Choose” scale your blood might be boiling at this point but again keep an open mind and continue reading the book. You will be challenged but you will learn too.
The book is dense and you need a lot of will power and mental stamina to get through it. Each section has at least one anecdote to surprise you, perhaps we can call them “huh inspiring”. And this book is full of huh inspiring sections. That for me was very enjoyable. As for the format, the book is what you would expect when an economist and a lawyer collaborate. It is long, detailed and at times reads like a rental lease agreement. What I am saying is that this can be like a textbook but stay strong and positive.
The book eases you into the theory of nudging. It starts by providing interesting examples of nudges in everyday life. These chapters might be very applicable for those who design products or architect a service. The middle sections is solely dedicated to personal finance. There is a lot to learn there for every adult. The final section is mostly about applying the nudge theory to a larger society. This part was in fact the most memorable part for me and the most unsettling. That said, I found all of the presented arguments to be very well crafted and thought through. In fact, as a thought exercise I tried to come up with better proposal but at the end I almost always ended up agreeing with what they presented. Richard Thaler is a Noble laureate and a former adviser to Barak Obama but he has also worked in republican think tanks so what you get here reads more like a policy mandate than a book but it should not stop you from enjoying the ocean of ideas in there.
October 8, 2023
Interesting, but often simplistic. This is about how the architecture of presenting choices can drastically influence outcomes. The most well-known of the authors' arguments is about 401k retirement savings programs in the US. I have first-hand experience with this from my time as a manager in a tech company where I tried, mostly unsuccessfully, to persuade my employees to commit at least 3% of their incomes to the 401k, because the company would match the first 3%. Effectively, this was a 3% pay raise, albeit one that would be deposited in savings, but I still could never break the 25% participation level with my employees, and the company as a whole did not get above 20%. By re-structuring the choice as opt-out, versus opt-in, companies regularly achieve >60% of their employees participating in these programs, because inertia is a powerful force. If, by doing nothing, workers will automatically be enrolled at the 3% minimum level, most of them will do so, whereas, if they have to actively choose to contribute, most will not.
Thaler and Sunstein present many such examples, with the punchline being that, in most cases people will select the choice that is easiest. To me this seems obvious, and so after a bit, I started skimming many of their examples, though I did read their section on climate change carefully.
All in all, not bad, but the content could be condensed.
Thaler and Sunstein present many such examples, with the punchline being that, in most cases people will select the choice that is easiest. To me this seems obvious, and so after a bit, I started skimming many of their examples, though I did read their section on climate change carefully.
All in all, not bad, but the content could be condensed.
September 9, 2021
This book opened my eyes to how humans make decisions, and how easily they can be influenced by their peers and by the way choices are presented to them. Through engaging research and entertaining anecdotes, it shows how to “architect” choices to nudge people towards certain decisions. The authors call this “libertarian paternalism”, because it uses incentives to motivate desired behavior rather than using command and control measures like laws and bans. I highly recommend this book for its practical insight into behavioral psychology and behavioral economics.
In an ideal world, people would have the time, knowledge, and motivation to make the perfect choices. In reality, humans are irrational, emotional, ignorant, apathetic, or downright lazy, so simply providing as many choices as possible rarely works. Libertarian paternalism strikes a balance between freedom of choice and incentivizing behavior.
I read this book because it was listed in .net Magazine’s The top 25 books for web designers and developers.
The authors explain that humans have “automatic” and “reactive” systems; the automatic system is the subconscious, emotional “gut instinct”, while the reactive system is the intellectual conscious. Nudges help the reactive system overpower the automatic system.
The authors use libertarian paternalism to advocate specific policies for public and private institutions, dealing with topics in personal finance (saving, retirement, debt, mortgages), health care, education, and politics. They also address the ethical issues of choice architecture.
I love personal finance, so I especially liked seeing how nudges can lead to better retirement saving and investing. The authors show how something as simple as automatic enrollment in retirement plans results in a significant increase in participation.
I liked the RECAP (Record, Evaluate, and Compare Alternative Prices) concept, which says vendors and service providers should give consumers a statement of the costs associated with different hypothetical patterns of service usage to help them make informed choices about things like electricity and gas consumption.
I liked the authors’ idea that people should be able to waive the right to sue for medical malpractice, in exchange for lower medical costs. I’m not sure how I feel about their proposal to privatize marriage; they say this would give religious organizations the freedom to set rules about homosexuality, divorce, etc., while allowing the government to honor civil unions with benefits.
6 principles of good choice architecture
• iNcentives: motivate behavior with incentives
• Understand mappings: show the outcomes that will result from the choices
• Defaults: provide default options
• Give feedback: show people the effect their choices are having
• Expect error: make choices foolproof
• Structure complex choices: present complex choices in easily understood ways
Miscellaneous notes
• The more you ask for, the more you get.
• People hate losses twice as much as they like gains.
• People like to do what they believe most people think is right. They also like to do what most people actually do.
In an ideal world, people would have the time, knowledge, and motivation to make the perfect choices. In reality, humans are irrational, emotional, ignorant, apathetic, or downright lazy, so simply providing as many choices as possible rarely works. Libertarian paternalism strikes a balance between freedom of choice and incentivizing behavior.
I read this book because it was listed in .net Magazine’s The top 25 books for web designers and developers.
The authors explain that humans have “automatic” and “reactive” systems; the automatic system is the subconscious, emotional “gut instinct”, while the reactive system is the intellectual conscious. Nudges help the reactive system overpower the automatic system.
The authors use libertarian paternalism to advocate specific policies for public and private institutions, dealing with topics in personal finance (saving, retirement, debt, mortgages), health care, education, and politics. They also address the ethical issues of choice architecture.
I love personal finance, so I especially liked seeing how nudges can lead to better retirement saving and investing. The authors show how something as simple as automatic enrollment in retirement plans results in a significant increase in participation.
I liked the RECAP (Record, Evaluate, and Compare Alternative Prices) concept, which says vendors and service providers should give consumers a statement of the costs associated with different hypothetical patterns of service usage to help them make informed choices about things like electricity and gas consumption.
I liked the authors’ idea that people should be able to waive the right to sue for medical malpractice, in exchange for lower medical costs. I’m not sure how I feel about their proposal to privatize marriage; they say this would give religious organizations the freedom to set rules about homosexuality, divorce, etc., while allowing the government to honor civil unions with benefits.
6 principles of good choice architecture
• iNcentives: motivate behavior with incentives
• Understand mappings: show the outcomes that will result from the choices
• Defaults: provide default options
• Give feedback: show people the effect their choices are having
• Expect error: make choices foolproof
• Structure complex choices: present complex choices in easily understood ways
Miscellaneous notes
• The more you ask for, the more you get.
• People hate losses twice as much as they like gains.
• People like to do what they believe most people think is right. They also like to do what most people actually do.
August 31, 2018
کتاب تماما مثال های اقتصادی داره اما محوریت اون تصمیم گیری در زندگی در هر زمینه ای هست. مثال هایی که میزنه بیشتر در زمینه اقتصاد در تفکر سازمانی هست ( برداشت شخصی) اما بسیار میشه اون رو تعمیم داد.
در نهایت این رو بگم که تمرکز کتاب روی ایجاد شرایط بهتر برای تصمیم گیری در انسان هایی ست که میدونیم در زندگی انتخاب های زیادی دارند ولی به علت ندانستن آمار و ارقام و به علت خطاهای شناختی میتونن اشتباه فکر کنن و اشتباه تصمیم بگیرند. نویسنده به اختیار قیم مآبانه اعتقاد داره و بارها اون رو در کتاب بیان میکنه. به این معنی که ما کسی رو مجبور به گرفتن تصمیمی نمیکنیم بلکه شرایطی رو فراهم میکنیم که تصمیمی بگیره که براش مناسبتره.
حرف جالبي كه ميزنه اينه كه انسان ها در زندگي بايد تصميم هاي زيادي بگيرن، و اون ها توي تصميم گيري هايي مثل اينكه چه طعم بستني رو بخورند بيشتر متبحر هستند تا اينكه چه رشته اي رو انتخاب كنند و يا چطوري پولهاشونو پس انداز كنند يا چه خونه اي بخرند..به علت اينكه بارها و بارها ممكنه در معرض انتخاب بستني قرار بگيرند ولي تنها چندبار در بهترين و پولدار ترين حالت مي تونن در انتخاب خونه تمرين كنند. لذا وظيفه سازمان، دولت، مدرسه، ارتش و همه سازمان هايي كه در زندگي و تصميم گيري آدم ها نقش دارند اين هست كه با تكيه به مطالعات و تجربيات به مردم كمك كنند كه بهترين تصميم رو با توجه به شرايطشون بگيرند. اين سقلمه ها بعضا طوري عمل مي كنند كه آدم ها حتي متوجه نمي شوند كه اون لحظه در معرض يك تصميم گيري قرار گرفتند.
مطالعه اين كتاب رو به همه علاقه مندان به اقتصاد رفتاري توصيه مي كنم.
November 20, 2017
Kazancını maksimize etmeye çalışan akıllı yatırımcıların, her zaman aklın yolunu bulmasını bilen akılcı tüketicilerin, rasyonel insanların dünyasından "serbestçi ataerkil dürtmenin" toplumsal/ekonomik davranışlarımızı yönlendirmede en iyi yol olduğu düşüncesine geldik. Nobel ödüllü Thaler'in, davranışçı iktisat ve hukuk konularında çalışan düşünür Cass R. Sunstein'la ortaklaşa yazdığı kitap, insanların davranışlarının "istenen sonuçlar" vermesi için küçük dürtmelerle düzeltilmesi gerektiği ana fikrine dayanıyor: Tüketici davranışları, bağışlar, öğrenci kredileri, sağlık sigortaları, tasarruflar, motosiklet sürücülerinin kask takması, hatta evlilikler gibi seçim alanlarında "daha iyiye nasıl ulaşabiliriz? Dürtme, bir kitaptan çok kamu kuruluşlarına tavsiye broşürü gibi.
December 9, 2023
مردم اغلب تحتتاثیر وسوسهها و یا خطاهای منطقی هستند. وقتی افراد از اطلاعات، بازخوردها و یا تجربیات شخصیِ کافی برخوردار نیستند، احتمال اینکه انتخابهای بد انجام دهند افزایش مییابد. تاثیرات اجتماعی نیز، تصمیمگیریِ خوب را مختل میکنند. مردم، گرایشی ذاتی برای همرنگ شدن با جماعت دارند؛ آنها دوست دارند در گروهها جای بگیرند یا کاری را انجام دهند که بقیه انجام میدهند. تاثیرات اجتماعی ممکن است ظریف و نامحسوس باشند، اما میتوانند به شکلی ناخواسته منج�� به تغییرات شگرف در سطح اقتصاد ملی شوند.
تیلر در کتاب تلنگر درباره همین موضوع صحبت میکند. چگونه از تاثیرات محیطی بر تصمیمگیریهایمان به ویژه در حوزه اقتصاد جلوگیری کنیم و چگونه هوشمندانه تصمیمگیریهایمان را بهبود دهیم.
او پس از صحبتی مفصل درباره انسان و مقصدهای زندگیاش، موضوع بهبود تصمیمگری را در زمینههای کارآفرینی، ثروت، بهداشت و آزادیهای فردی بررسی کرده است.
تیلر در کتاب تلنگر درباره همین موضوع صحبت میکند. چگونه از تاثیرات محیطی بر تصمیمگیریهایمان به ویژه در حوزه اقتصاد جلوگیری کنیم و چگونه هوشمندانه تصمیمگیریهایمان را بهبود دهیم.
او پس از صحبتی مفصل درباره انسان و مقصدهای زندگیاش، موضوع بهبود تصمیمگری را در زمینههای کارآفرینی، ثروت، بهداشت و آزادیهای فردی بررسی کرده است.
October 4, 2021
الثلث الأوّل متألّق وآسِر يقدّم مناقشة فلسفية جميلة لفكرة الانحيازات والتأثير الناعم وحتميته.
الثلث الثاني يقدّم تطبيقات مستقاة من الحياة الأمريكية وهي أقل إثارةً بكثير
الثلث الأخير لم أقرأه لأني لم أستطع إكمال الثلث الثّاني
الثلث الثاني يقدّم تطبيقات مستقاة من الحياة الأمريكية وهي أقل إثارةً بكثير
الثلث الأخير لم أقرأه لأني لم أستطع إكمال الثلث الثّاني
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