Nudge: Improving Decisions About Health, Wealth, And Happiness by Richard H. Thaler

Mar 22, 2009 Trevor rated it 4 of 5 stars · review of another edition

Shelves: behavioural-economics, economics, psychology, social-theory

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 w...more

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Oct 22, 2008 David rated it 5 of 5 stars · review of another edition

Shelves: read-in-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 m...more

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Aug 18, 2008 Chris rated it 4 of 5 stars · review of another edition

Shelves: cognition, development

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"...more 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)(less)

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Jun 30, 2008 Nina rated it 3 of 5 stars · review of another edition

I really like a lot of the ideas presented in this book. I completely agree with their major points - that policies should pay close attention to the default option, and that one of the most effective ways of helping people make good decisions is complete and clearly presented disclosure. I know I complained that Ariely's book didn't take his theories far enough because he didn't talk about the implications of people's predictable irrationality, but now I'm going to complain that this book focus...more I really like a lot of the ideas presented in this book. I completely agree with their major points - that policies should pay close attention to the default option, and that one of the most effective ways of helping people make good decisions is complete and clearly presented disclosure. I know I complained that Ariely's book didn't take his theories far enough because he didn't talk about the implications of people's predictable irrationality, but now I'm going to complain that this book focused too much on the practical application of what behavioral economics has taught us without laying a solid theoretical or moral foundation. (Ok, so maybe I'm a little hard to please.)

In fact, I don't know if such a foundation is even necessary. This book would have worked best as a series of individual essays or empirical articles. The ideas alone are great - automatic enrollment is a clever way to get people to save for retirement by not giving them the option of succumbing to inertia, and I'm all for companies making public their carbon output. The problem with putting all these great ideas together in a book is that you have to develop an overarching theory that encompasses all your great ideas, coin it, and prove that you can generalize your theory to many other areas you may not know much about. And this is how we end up with "libertarian paternalism."

When the authors try to apply this theory to things like privatizing marriage and school choice, it comes across that they are using their nifty theory to solve complex problems, whose solutions in reality need to take into account much more than just practical considerations. Since they coined their theory with such a politically-charged term (not an oxymoron, they insist), I was expecting a more thoughtful discussion of government's responsibility to nudge people in the right direction or to let people make their own mistakes. Actually, this term kind of muddled what they were trying to say - they didn't seem to be arguing for smaller or no government (libertarians go much farther than just wanting the ability to opt out of a government's default decision, from what I gather), and paternalism just sounds scary, so they make a great effort to try to defend the parternalism part of their theory. And a lot of what they talk about actually has nothing to do with government or politics - the automatic enrollment plan has been adopted by private employers without any government mandate.

In a nutshell, this book has a lot of interesting and clever ideas that I really believe can work, but the grand theory of libertarian paternalism was not a good umbrella under which to throw all the random interesting and clever ideas the authors have. (less)

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Apr 06, 2013 Ensiform rated it 4 of 5 stars · review of another edition

Shelves: non-fiction, brain

The authors, both economists at University of Chicago, advocate what they call “paternal libertarianism” in order to improve an equal footing for all in the areas of health care, marriage, taxes, and so on, without impinging on freedom any more than absolutely necessary. They argue, reasonably, that everyone with a stake in an issue or a semblance of power is, whether they like it or not, a change architect – that even not interfering and allowing totally laissez-faire markets to evolve is still...more The authors, both economists at University of Chicago, advocate what they call “paternal libertarianism” in order to improve an equal footing for all in the areas of health care, marriage, taxes, and so on, without impinging on freedom any more than absolutely necessary. They argue, reasonably, that everyone with a stake in an issue or a semblance of power is, whether they like it or not, a change architect – that even not interfering and allowing totally laissez-faire markets to evolve is still doing something (“If you choose not to decide, you still have made a choice,” as Neil Peart says) – so governments and free markets should do their nudging in a positive and helpful way. For example, making a simple and high-returning investment the default option on a retirement package the default is a nudge that helps those who would be otherwise lost in a sea of legal and economic mumbo-jumbo if the default were “find your own damn retirement package.”

The authors write in a pleasing, non-preachy, conversational style, and make their points clearly, requiring no economic understanding to follow their ideas, many of which are more or less common sense (and thus will never be implemented by our government) while others are intriguing possibilities, such as Save More Tomorrow, which ties savings plan deposits to future raises. Although I enjoyed reading the book, for me it was basically preaching to the converted, without the necessary punch behind the ideas to ever convince any Republican big-government corporate-nanny-state lover. Actually I was expecting it to be more focused on personal, psychological nudges of the kind the authors discuss at the beginning, the way perceptions can deceive, the way self-control strategies can be used to hack one’s own mind, and the values that humans give to losses and gains. When the book hit its political and social manifesto stride, I was slightly disappointed, but the authors’ chummy style and practical ideas kept me interested. (less)

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May 07, 2013 Arron Kallenberg added it · review of another edition

I read Nudge because Daniel Kahneman talked about it in his book "Thinking, Fast and Slow," which was excellent. Nudge is good, although it is not nearly as dense (or rich) as Kahneman's book. However, it is still thematically similar. Furthermore, Nudge focuses more on the practical application of many psychological theories (including those pioneered by Kahneman) and less on the and inter-workings of the theories themselves. Where Kahneman is painstakingly conveying the results of many decades...more

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Feb 17, 2009 Terry rated it 4 of 5 stars · review of another edition Recommends it for: policy wonks

Recommended to Terry by: I think it was Ars Technica

The book focuses on cases where simple changes in choice architecture (how people are exposed to options) can create significant changes in behavior. The authors immediately recognize this could be used "for evil" as it were or against the chooser such as arranging food in a cafeteria so kids buy more high margin foods but most of the cases revolve around "stove" examples. Stove cases are where slight changes in presentation create a good situation for the user like stove burner arrangements. No...more

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May 13, 2013 Erika RS rated it 4 of 5 stars · review of another edition

The short version: Humans have cognitive biases that affect their decision making. Using what we know about these biases, we can design choice architectures that make it easy for people to make good choices without taking the freedom to choose away from those who want to do so. Thaler and Sunstein describe these principles and give examples of how they can be applied to saving money, health care, and preserving freedoms.

Nudge acknowledges both the failures of one-size-fits-all government solutio...more The short version: Humans have cognitive biases that affect their decision making. Using what we know about these biases, we can design choice architectures that make it easy for people to make good choices without taking the freedom to choose away from those who want to do so. Thaler and Sunstein describe these principles and give examples of how they can be applied to saving money, health care, and preserving freedoms.

Nudge acknowledges both the failures of one-size-fits-all government solutions and why cognitive biases cause the market to fail as a mechanism for providing social good.

Details on the later since the former seems more obvious to me. The purpose of the market is to maximize profit. Ideally, this goal lines up with the goals of general social good. This is often the case because competition allows people to go with the solution that best meets their goals.

However, cognitive biases can throw a wrench in this system. Advertising is the most obvious way. The whole purpose of marketing departments is to figure out how to provide information in a way that takes advantage of cognitive biases.

Things still work out for the most part for choices that are frequent and give good feedback. No amount of marketing is going to make people like a bad candy bar. This is less true for decisions that are rare or have no feedback (e.g., health care, marriage, retirement investing, buying a house). Good decisions are hard because information is lacking, feedback is slow, and educating yourself can be difficult and confusing.

The authors suggest, and I agree, that a fruitful compromise is to use nudges. A choice architecture structured around nudges allows users to make choices but ensure that the easy decision is good enough for most users*.

An example: Many companies provide 401k plans with automatic enrollment. Getting out of these plans is easy enough, and this nudge has greatly increased 401k plan enrollment. Wonderful! The market is working all on its own**. But we can still make things better. When automatic enrollment is used, some default investment must be chosen. The default is often overly conservative because companies do not want to be liable for losses. Employees will often stay with this plan, even if they increase their contribution, because they assume the default choice is a good choice. A useful nudge here would be for the government to give best practices guidelines that suggest better investments and remove liability for losses for defaults which follow those guidelines.

That is just one example. The point is that by changing the choice architecture, we can create decisions that allow for choice while still making it easy to make a decision that is good enough. These nudges may come from the government or from the market, but both are necessary because they both have their own strengths and weaknesses.

* Yes, nudges could be used for bad as well as for good and you have to trust those making the choice architecture to make the nudged decision a good one without making alternatives too difficult. Given that, I still think nudges are better than one-size-fits-all solutions. I also believe that we already have nudges used for (sometimes) bad; it is called marketing. We may as well give the same tools to those who would use them to get rid of one-size-fits-all solutions.

** Not strictly true. There are laws that incentive companies to offer 401k plans, but we will ignore those for now.(less)

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Apr 04, 2013 lyell bark rated it 2 of 5 stars · review of another edition

I did not find this book very helpful in Improving Decisious About Health, Wealth, and Happiness (Hardcover) at all. I would rank it only one star, but in the midst of all the typical Ivy League gabbldeegook i found this truely inspired passage:

contemplation and hard abstract study belong to Saturn who is also the planet of the melancholy temperament, and the star which is inimical to the vital forces of life and youth. Melancholy students who have used up their vital forces in their studies, an...more

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Jan 16, 2013 Mike Schwartz rated it 3 of 5 stars · review of another edition

The first of several great books that I read this year on the relatively new discipline of cognitive neuroscience. This one focuses on how human beings make decisions that affect their lives for better or worse. Sunnstein and Thaler concentrate on the differences between our "automatic system" (the rapid, intuitive, reptilian brain) and our "reflective system" (the slow, deliberate, self-conscious part). Decisions based on the latter are often bad ones despite the fact that we think we are ratio...more The first of several great books that I read this year on the relatively new discipline of cognitive neuroscience. This one focuses on how human beings make decisions that affect their lives for better or worse. Sunnstein and Thaler concentrate on the differences between our "automatic system" (the rapid, intuitive, reptilian brain) and our "reflective system" (the slow, deliberate, self-conscious part). Decisions based on the latter are often bad ones despite the fact that we think we are rationally reviewing all the data before us to consciously make wise decisions, The authors draw our attention to mental "heuristics" or cognitive "rules of thumb" that are flawed, and which explain why we make so many poor decisions. Among these heuristics is the "optimism and overconfidence bias” which explains why we think we are making good decisions after we’ve made them (also why everyone thinks they are “above average”). There’s also: the “status quo bias” (why we pay for magazine subscriptions for years after the three-month "free" trial ends) "unrealistic optimism" (why we buy lottery tickets) and the "availability heuristic" (why people think that homicides happen more frequently than suicides: because they’re mentioned in the newspaper more, and are thus more “available” to our conscious mind). But although this book has many fascinating examples of how and why we make bad choices, the authors project is really to provide a framework for how people can be subtly influenced to make good choices. Fixing on the admittedly unfortunate phrase "libertarian paternalism" the authors show how we can gently convince children to eat fruit in the cafeteria and avoid sweets by changing the layout of the food or inducing workers to sign up for 401(k) plans by matching contributions. The “libertarian” part of this is that nobody should be coerced to do anything they don’t want to do. The “paternalism” part of this is the “nudge” that the authors recommend to help people make decisions in their best interest (by government, business, families etc.). Lest people cry out “socialism!” or “nanny state!” or “death panels!” it’s worth noting that this is already happening. The authors point to Chicago's Lake Shore Drive which has white stripes on the most dangerous parts of the road which offer drivers the illusion that their speed is increasing so that they actually decrease their speed or urinals at Amsterdam Airport have black flies painted on them in the theory that people will aim for it and reduce spillage (it works). This all qualifies as “libertarian paternalism”. Automatic enrollment is now the norm for 401(k) plans. ATMs beep to remind you that you've walked away without your bank card. Since decisions are already being made for us every day, by politicians, lobbyists, insurance companies, our employers, our hospitals, our neighborhood grocery stores, is this such a controversial argument? I think not.(less)

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Oct 17, 2012 Emily rated it 4 of 5 stars · review of another edition

Nudge, is a motivational best seller about behavioral economics. It mainly illustrates a number of principles about decision making, and how society may give a “nudge” to all our ultimate decisions. The book begins by explaining the types of people in our society or How We Think. There is an intuitive, automatic system, and then a reflective, and rational system. According to Thaler and Sunstein the automatic system is uncontrolled, fast, and effortless. While the reflective system is controlled...more Nudge, is a motivational best seller about behavioral economics. It mainly illustrates a number of principles about decision making, and how society may give a “nudge” to all our ultimate decisions. The book begins by explaining the types of people in our society or How We Think. There is an intuitive, automatic system, and then a reflective, and rational system. According to Thaler and Sunstein the automatic system is uncontrolled, fast, and effortless. While the reflective system is controlled, slow, rule-following. (Nudge 20). They then go into explaining the Rules of Thumb which are anchoring, availability and representativeness. Many decisions people make are by irrelevant activity, or events that are very recent in our minds. For example if a tornado have had greater estimates of likelihood to die from rather than a more common cause. Representativeness is one concept I find particularly interesting. If a basketball player shoots from the same spot and makes it almost every time, it is a “sweet spot” but this has been proved that a “sweet spot” or hot hand is ultimately a myth. Optimism and Overconfidence is said to be when we, as a society over-estimate our abilities to achieve. For example, Thaler gives an anonymous survey at the beginning of the year with one of the questions being, “In which decile do you expect to fall in the distribution of grades in this class?”. (pg31). Realistically only 10 percent will be in the top decile. Many studies will show that we are overachievers, we have more confidence than we should in most cases. Losing is never something someone can enjoy, in our society people hate losing. Thaler and Sunstein talk about Loss aversion, which is that losing something is valued at least twice as highly as gaining something. If I own a bag, and my neighbor does not, I am not willing to give it up buy offering a very high price for her to purchase it. The emotion of decision-making plays a major role. Someone whom is very energetic and easily motivated has more of a nudge to go for a run, rather than someone whom has just worked a 12 hour day.
The authors next go into a section of mindless choosing, which I found very fascinating. We as a society mainly do daily tasks on autopilot, not thinking about that route we take to work every morning or eating meals. One experiment by Brian Wansink and his colleagues in a Chicago movie theatre, where consumers were given a free bucket of stale popcorn. Some said it did not taste good, yet of those given a big bucket a remarkable 53% ate more popcorn, than those who received medium size buckets.(pg 43) This to me expresses how robotic our society has become that we can not differentiate between stale and fresh popcorn. Mental accounting is a skill that we each obtain at some point. It is technically known as a form of inner-self control. If someone has a certain account that they will strictly use for home repairs, and another they will use for vacations, this is form of mental accounting. Following the Herd is the next point made by Thaler and Sunstein, does being in a group effect a person’s decision? Well the answer is yes, politics, and social influences are all a bit of a nudge in decision making. The three social influences Nudge spotlights are information, peer pressure and priming. Feedback is really a wonderful concept that some may not be able to accept. Positive or negative feedback is all effective in helping each of us learn and better ourselves. Practice is often designed for negative feedback to make us better with what we are attempting to achieve. Choice architecture is a great way of having an influence over decisions, or being able to overcome the difficulty of choice architecture. By having a door that looks designed to be pulled, actually opens outward. This is an example of choice architecture. (pg83). Thaler and Sunstein have created six principles of good choice architecture, Incentives, Understand mappings, Defaults, Give Feedback, Expect Error and Structure complex choices. (pg102).
Money and the difference of Humans and Econs are discussed in the last parts of the book Nudge. It goes into detail about saving, investing, borrowing and how we can do a better job with these tasks. Econs are savers and they spend money responsibly. While the same cannot be said for humans. The book discuses the nudges in our society that can be influencing humans saving decisions. Social Security, retirement funds, and credit cards are all within the choice architecture approach. They way we want them to be viewed are how we will base our decision. Health is also a major choice architecture. Doctors, Medicare and Organ donations are all nudges in our health decisions. As much as we do not believe so they truly are great influences in our lives.
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Oct 17, 2012 Loy Machedo rated it 1 of 5 stars · review of another edition

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...more

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Sep 09, 2012 Suhrob rated it 4 of 5 stars · review of another edition

This is a good choice to read after Kahneman's "Thinking, fast and slow" (in fact Kahneman approves of "Nudge" at the end of his book). The book is a large list of policies in all venues of political and personal life which try to correct (and/or utilize) inherent humant cognitive biases to improve our well being while retaining the principle of free choice*.

The last part of the book then contains pre-emptive responses to the main (mostly libertarian) criticism of this approach. I think this apo...more

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Aug 12, 2012 Patrick rated it 4 of 5 stars · review of another edition

This is a wonderful book. The authors put forth the idea of "libertarian paternalism" as a sort of third way of envisioning how we should think of making policy decisions that would enhance people's lives. They really put forth a great argument, and I shall be using some of the theory in this book in my classroom this year, in the way of creating incentives that may be more compelling for high school students.

This is an economics work that leans heavily on human psychology in an effort to explai...more

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Jun 01, 2012 Laura rated it 3 of 5 stars · review of another edition

The first 40% or so of this book is theory,, concisely presented. Thaler and Sunstein focus on the biases that impact our decision-making, particularly social pressure, our tendency to procrastinate (and hence stay with our default option) and our tendency to rely on emotional rather than purely rational factors in making decisions. They argue that "choice architecture" - the way choices are presented to us - impact decision making, and that we can be "nudged" (hence the title) to select the bes...more

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May 06, 2012 T. Edmund rated it 5 of 5 stars · review of another edition

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 t...more

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Mar 30, 2012 Marks54 rated it 4 of 5 stars · review of another edition

This is a good followup book to Kahneman's recent book. The authors are two academics from the University of Chicago - one a behavioral economist and the other a law school dean/professor. The intuition is to expound a case for "libertarian paternalism" - or how to prompt (nudge) people to make better/more productive/less harmful choices without forcing them to or without taking away their right to choose and make decisions on their own. It is based on the same psychology as motivate the Kahnema...more This is a good followup book to Kahneman's recent book. The authors are two academics from the University of Chicago - one a behavioral economist and the other a law school dean/professor. The intuition is to expound a case for "libertarian paternalism" - or how to prompt (nudge) people to make better/more productive/less harmful choices without forcing them to or without taking away their right to choose and make decisions on their own. It is based on the same psychology as motivate the Kahneman book, namely that people have automatic and reflective capacities for thinking and that while they generally are functional, they can also get into big trouble in certain situations that stem from failing to coordinate these capacities and work sufficiently hard at making a decision. Add to that a variety of biases, excessive optimism, and a tendency to follow the crowd, and you have the starting point for the book.
This book differs from the Kahneman book but discussing what "choice architects" should do to foster better decisions -- i.e., the book goes beyond description to prescriptions of how people should go about their lives and how government and private organizations should act so that they can do so. The result is a stimulating discussion of the ways in which people can be led to make more better choices and fewer poorer choices without excessive government intrusion. I won't give away the nifty examples but there are many of them. The book is also excellent for going into detail on important matters of everyday life, whose complexity can be daunting even for experts. This includes discussion of buying a home, investing for retirement, choosing a health care plan, and even how to ask people about being an organ donor.
It is a thoughtful, funny, and human book and a rich source of really good ideas. The discussion on marriage contracts and related issues was particularly memorable for me. It is well organized and easy to read as well. This book was published just before the financial meltdown of 2007-2008 but the authors managed to insert how the book applies in a postscript to their expanded edition.(less)

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Jan 02, 2012 Catherine rated it 4 of 5 stars · review of another edition

Shelves: bookcrossing

An interesting look at how the way in which choices are presented - or not - affects the decisions we make. It is written as a reasoned manifesto for what the authors refer to as libertarian paternalism. Many of their suggestions relate to individual economic choices, but other things are considered from the trivial (how to keep men's loos cleaner) to the fundamental (the role of marriage in modern society). Existing systems come in for praise where it is due, as well as criticism, and there is...more

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Sep 06, 2011 Bryan Kim rated it 5 of 5 stars · review of another edition

A must for anyone involved with public policy, public health, public safety... pretty much anything public. The eminently economic authors offer a dispassionate debunking of the tattered economic notion of society as a sum total of many rational units of self interest. They offer several major biases and short comings of the typical human decision making processes, offering convincing arguments from the latest research in neuro-science, sociology, evolutionary biology, etc.

Authors champion a fr...more

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Jun 12, 2011 Amber rated it 3 of 5 stars · review of another edition

Although I enjoyed reading this book, ultimately I found it not to have that much new material, relative to the collection of (libertarian) blogs I read, which have covered the authors' work in some detail.

However, I did really like the framing of "libertarian paternalism"--constructing default choices to be helpful, but still giving people choices--which is that there is no neutral choice architecture. That is, people buy stuff on the higher shelf more...but something has to go on the higher sh...more

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Apr 26, 2011 Heather rated it 3 of 5 stars · review of another edition Recommends it for: Everyone

Recommended to Heather by: Cari Rottman

Shelves: nonfiction, 2011

Nudge: Improving Decisions about Health, Wealth, and Happiness, is a book describing how humans are often influenced by contextual variables which often lead to poor decision making. However, by structuring choices differently and changing these contextual elements, it is possible to “nudge” people towards making better decisions, those that they would choose themselves if we were completely rational creatures.

The authors state the purpose of their book quite eloquently on their website: “Decis...more Nudge: Improving Decisions about Health, Wealth, and Happiness, is a book describing how humans are often influenced by contextual variables which often lead to poor decision making. However, by structuring choices differently and changing these contextual elements, it is possible to “nudge” people towards making better decisions, those that they would choose themselves if we were completely rational creatures.

The authors state the purpose of their book quite eloquently on their website: “Decision makers do not make choices in a vacuum. They make them in an environment where many features, noticed and unnoticed, can influence their decisions. The person who creates that environment is, in our terminology, a choice architect. The goal of Nudge is to show how choice architecture can be used to help nudge people to make better choices (as judged by themselves) without forcing certain outcomes upon anyone, a philosophy we call libertarian paternalism. The tools highlighted are: defaults, expecting error, understanding mappings, giving feedback, structuring complex choices, and creating incentives” (http://nudges.org/).

It’s kind of scary to think about how all the things that shouldn’t affect our decisions but do anyway. Defaults, for instance – A majority of the population says they would gladly donate their organs in the event of an untimely demise. Yet, the numbers of people who indicate their consent to donate organs on the back of their drivers license does not even come close to the numbers who claim they would donate. Why the discrepancy? Because here individuals have to opt in if they wish to donate… the default is to not. In other places where the default is to donate, the numbers who indicate they would not are far less. The examples go on and on – nearly every decision we make is influenced by the architecture of the choice. I definitely side with the authors that if we can use these tactics to nudge people towards making better decisions, why shouldn’t we?

While the topic of the book in itself is very interesting, I felt somewhat removed from this book, despite the very visible practical implications. I think part of it is just because at this point in my life, when I am riding home from school or work, I want to listen to something light that doesn’t require me to think (**cough – Tina Fey’s Bossypants—cough**) I think this book will be very helpful to come back to at a later date though. I definitely want to read up on good investing practices, because I am not at all well-versed in that area and I think I would be able to get more out of the sections on money after I am a bit more knowledgeable.

In conclusion, this book is definitely worth a read through, especially if you are looking for a book to “better yourself” by understanding the extraneous variables which unduly impact our decisions, and learning to consequently make better ones. However, I would recommend the text version and not the audio, because this narrator’s voice verged on monotone (to the point of being Kristen Stewart annoying) and he had a much harder time sustaining my attention than I’m sure reading it myself would have.
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Feb 28, 2011 Christen rated it 2 of 5 stars · review of another edition

I probably shouldn't rate and review a book I didn't make it all the way through, but I found myself getting more and more angry the further I went into this book. I liked the first part, where the authors discussed choice architecture generally. However, they then went on to discuss many choice architecture issues in a manner I found confusing. Two examples seem appropriate to consider. The authors seem to find fault with the way student loans are done. They seem to criticize schools for select...more

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Dec 31, 2010 Vince Wu rated it 4 of 5 stars · review of another edition

The central idea of the book is simple: People should be free to choose, but it's also desirable to influence people's choices for the better. In fact, the authors pretty much explain the concept soup to nuts in the introduction. The rest of the book felt a bit tedious as such... I would summarize the rest as a refresher on human fallibility and extensive examples of how choice architecture could be applied to wide ranging aspects of life.

This quote summarizes the central idea of the book:

[...]

...more The central idea of the book is simple: People should be free to choose, but it's also desirable to influence people's choices for the better. In fact, the authors pretty much explain the concept soup to nuts in the introduction. The rest of the book felt a bit tedious as such... I would summarize the rest as a refresher on human fallibility and extensive examples of how choice architecture could be applied to wide ranging aspects of life.

This quote summarizes the central idea of the book:

[...] in general, people should be free to do what they like - and to opt out of of undesirable arrangements if they want to. [...] we argue for self-conscious efforts, by institutions in the private sector and also by government, to steer people's choices in directions that will improve their lives.

A few examples were quite good:
- illustrating the power of social norms: Add a frown/smiley face to electricity bills based on average usage. The big energy users used less. Remarkably, the energy efficient users didn't use more (vs. another experiment that showed how much less they were using).
- illustrating the power of priming: simply asking "Do you plan to vote?" increased the voter turnout by 25%.
- illustrating "loss aversion": Split a group of people in half. Give one half something (e.g. a mug). Ask first half to mark how much they are willing to sell to the second half. Ask the second half how much they'd be willing to buy from the first half.
- "Save more tomorrow": an automatic saving rule (e.g. auto save a portion of future raises) that ends up helping people save more without removing any choices.
- Make donating organs the default. People can opt out.
- School cafeteria: load up the first section with fruits and vegetables. The "unhealthy" food is still around, but not as easily discoverable.

There were a few examples that I thought were quite odd. For example, there was a chapter on privatizing marriage which I thought was simply shifting the problem around. The authors suggested that the government could get out of the legalizing marriages business altogether, and provide the expected marriage benefits (e.g. tax savings) and enforce responsibilities (e.g. child support) via other means. Churches and other private institutions would give people the "marriage" label according to whatever rules they see fit. While this does remove the government from the debates (e.g. is gay marriage legal?), it doesn't remove any of the debates. The goal isn't clear to me.

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Dec 21, 2010 Lorna added it · review of another edition

Shelves: reading-group-jo-jody-and-hannah

Very easy to read, conversational in places between the two authors. On reflection there is much in it which seems to spell out in length things that we know to be true. I like the practical examples, especially those around the environment, saving money and so on. Discussing the book with book group friends raised lots of interesting issues. For example the danger of individualising social issues and making individuals responsible for social problems. There are other influences which the author...more

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Dec 06, 2010 Richard White rated it 3 of 5 stars · review of another edition Recommends it for: progressives, conservatives who want to understand the progressive tactics

Recommended to Richard by: Glen Beck Reading list

Sunstein and Thaler build the situation the reader needs to have in order to accept the general theories and practices put forth in this book. The new term "Liberatarian Paternalist" is coined to ease a more conservative person into acceptance of a "Choice Architect".

People are grouped into "Econs" (Smart people) and "Humans" (everyone else including all us dumb little people). Humans are continuously being shown as not able to make decisions, especially intelligent decisions.

Government oversi...more

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Oct 28, 2010 Jeremy Kauffman rated it 4 of 5 stars · review of another edition

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 (mak...more

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Sep 20, 2010 Viola rated it 3 of 5 stars · review of another edition

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...more 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. (less)

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Jul 09, 2010 Harkinna rated it 5 of 5 stars · review of another edition

Who couldn’t use a little help accomplishing a pesky goal every now and again? I know I need help sometimes to get going on a story or making it to the gym. Nudge, by Richard Thaler and Cass Sunstein (of the University of Chicago) wrote the book as a manifesto to “improve decisions about health, wealth, and happiness.” Seeking to foster what they call a new movement of “libertarian paternalism,” the idea of the book melds individual freedom with the promotion by government of socially optimal de...more Who couldn’t use a little help accomplishing a pesky goal every now and again? I know I need help sometimes to get going on a story or making it to the gym. Nudge, by Richard Thaler and Cass Sunstein (of the University of Chicago) wrote the book as a manifesto to “improve decisions about health, wealth, and happiness.” Seeking to foster what they call a new movement of “libertarian paternalism,” the idea of the book melds individual freedom with the promotion by government of socially optimal decisions, so that the citizen and the society both benefit.

If this sounds a bit different from the University of Chicago’s reputation as a libertarian, free-market school, the authors have no trouble admitting their lone-wolf status in the Economics department. According to them, because the people are only “nudged” into making better choices, their personal liberty (a paramount concern for economists) is preserved. The authors apply the Nudge model to a host of complex and seemingly intractable issues like Social Security, prescription drug coverage, and preserving the environment. For each issue, an alternative solution is explored and the reader is giving a glimpse of what life would be like if only we could be nudged into doing the right thing.

For example, how to get American workers to save more for retirement? Forget the intricate discussions on how people understand their disposable income or how America’s retirement system allocates costs to take care of the elderly; Nudge world simply makes retirement savings automatic, and forces people to opt out of the plans. Presumably, those too lazy to save (note the assumption) now would be too lazy to opt-out under the Nudge system.

The authors also show how people can use the Nudge model in their own lives. My personal favorite is their advocacy of the website stickk.com. It allows people to effectively nudge themselves. Say you want to lose 10 pounds and you think it will take a month to do so. Well, you go to stickk, sign-up for free, and set up your nudge. To motivate yourself, you offer to pay a friend of yours $10 week every week that you don’t hit your weight loss goal. After setting up a profile and putting $40 in your Stickk account, you weigh in once a week. If you make your goal, you get $10. If not, your friend gets a nice gift. Naturally, there are many permutations of this nudge. The key is making the nudge hurt enough so you feel beholden to it.

A quick read, the book offers some new and innovative ways at looking at public policy problems. Take this as your nudge to check it out from your library. (less)

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Jun 06, 2010 Ben rated it 5 of 5 stars · review of another edition

Our last camping trip gave me a chance to finish up Nudge, a social economics book by Richard H. Thaler and Cass R. Sunstein. The first part of the book lays out the subject of choice architecture and ways that influence can, or even has to be asserted by system designers and policy makers. The authors promote "libertarian paternalism," which seeks desirable results using nudges that largely maintain freedom of choice for participants. The remainder of the work presents numerous examples and ide...more

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May 23, 2010 Angie rated it 2 of 5 stars · review of another edition

This book was recommended as an introduction to libertarian paternalism in a lecture on behavioral economics by Nobel-prize winner Daniel Kahneman. Per wikipedia, libertarian paternalism is "a
political philosophy that believes the state can help you make the choices you would make for yourself—if only you had the strength of will and the sharpness of mind. But unlike 'hard' paternalists, who ban some things and mandate others, the softer kind aims only to skew your decisions, without infringing...more
This book was recommended as an introduction to libertarian paternalism in a lecture on behavioral economics by Nobel-prize winner Daniel Kahneman. Per wikipedia, libertarian paternalism is "a
political philosophy that believes the state can help you make the choices you would make for yourself—if only you had the strength of will and the sharpness of mind. But unlike 'hard' paternalists, who ban some things and mandate others, the softer kind aims only to skew your decisions, without infringing greatly on your freedom of choice". It was a new concept to me, and I wanted to learn more. Based on Kahneman's recommendation and a column by George Will in Newsweek, I had expected something a bit more sophisticated---more political philosophy and less practical psychology. Although the authors mention libertarian paternalism frequently and devote the last third of the book to ways to affect social choices, there is little discussion of the basis for libertarian paternalism. . This is not a criticism, but readers should be alerted that this is not a book about libertarian paternalism. Disappointingly, the practical applications of libertarian paternalism discussed were pretty obvious once the concept is defined, although the authors seemed to dwell on them much too long, as if they needed extensive explanation.

Nudge is really more about improving decisions of all types, as the subtitle says. Judged on this basis, if you are new to the subject of how to make or influence decisions, you may enjoy it. It covers just about all the most famous experiments and the work on biases in decision-making of people like Tversky and Kahneman. It is a fascinating subject, but the discussions are so protracted that even if the material is new, I would suspect you might get as impatient as I did. The type of person who is likely to be attracted to this book is also likely to be intelligent enough not to need the implications of each idea spelled out in the detail provided here.

Readers with a long-standing interest in intelligent layman-level books on how we make decisions, such as Predictably Irrational or The Invisible Gorilla, are not likely to find much that is new in Nudge. I think there was one study in the book that was new to me. The applications to government "nudges" were not clever enough to sustain interest.

A real disappointment was the writers' inattention to precision in their writing, which grew to the point where I became reluctant to accept their facts. As an example, in the discussion of the Medicare Part D plan, the authors cited the low participation rate when the plan was introduced and said it would have been even worse except that federal retirees and many retirees of large corporations were "easily or automatically" enrolled. On the contrary, federal retirees and many retirees from large corporations already have prescription drug coverage and therefore Part D would not even be appropriate for them. I do not know if the authors did not know this or were simply imprecise on their writing, but the reader will come to the wrong conclusion in any case.

George Will's Newsweek column is a good summary of the book that can help you decide if you want to try it. However, I cannot recommend the audio version to anyone. The reader has a pleasant, clear voice, but too often he annoys with a Valley Girl-style intonation, ending factual statements with a rising questioning inflection. He also mispronounces words such as "mischievous", "laissez-faire", and "err". Both of these failings I consider inexcusable in a commercial recording.(less)

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