Marks54's Reviews > Nudge: Improving Decisions About Health, Wealth, and Happiness

Nudge by Richard H. Thaler
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Mar 30, 2012

really liked it
Read in March, 2012

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.
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