Vince Wu's Reviews > Nudge: Improving Decisions About Health, Wealth, and Happiness

Nudge by Richard H. Thaler
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Dec 31, 10

Read in July, 2010

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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