Nudge: Improving Decisions About Health, Wealth, and Happiness

by Richard H. Thaler

A False Assumption and Two Misconceptions

The standard policy advice that stems from this way of thinking is to give people as many choices as possible, and then let them choose the one they like best (with as little government intervention or nudging as possible). The beauty of this way of thinking is that it offers a simple solution to many complex problems:

The false assumption is that almost all people, almost all of the time, make choices that are in their best interest or at the very least are better than the choices that would be made by someone else.

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The first misconception is that it is possible to avoid influencing people’s choices.

The second misconception is that paternalism always involves coercion.

Choice Architecture in Action

Choice architects can make major improvements to the lives of others by designing user-friendly environments.

A New Path

Libertarian paternalism, we think, is a promising foundation for bipartisanship.

If incentives and nudges replace requirements and bans, government will be both smaller and more modest.

we are not for bigger government, just for better governance.

Table 1.1 Two cognitive systems Automatic System Reflective System Uncontrolled Controlled Effortless Effortful Associative Deductive Fast Slow Unconscious Self-aware Skilled Rule-following