Nudge: The Final Edition

by Richard H. Thaler

If you look at economics textbooks, you will learn that Homo economicus can think like Albert Einstein, store as much memory as Google does in the cloud, and exercise the willpower of Mahatma Gandhi.

Econs (and some economists we know) are pretty unsociable creatures. They communicate with others only if they can gain something from the encounter, they care about their reputations (because a good reputation is valuable), and they will learn from others if actual information can be obtained, but Econs are not followers of fashion.

golden rule of libertarian paternalism: offer nudges that are most likely to help and least likely to inflict harm.fn11 A slightly longer answer is that people are most likely to need nudges when decisions require scarce attention, when decisions are difficult, when people do not get prompt feedback, and when they have trouble translating aspects of the situation into terms that they can easily understand. When people are in situations that are unfamiliar or rare, they might well need a nudge.

Our primary mantra is a simple one: if you want to encourage some action or activity, Make It Easy.

many people will take whatever option requires the least effort, or the path of least resistance. Recall the discussion of inertia, status quo bias, and the “yeah, whatever” heuristic. All these forces imply that if, for a given choice, there is a default option—an option that will prevail if the chooser does nothing—then we can usually expect a large number of people to end up with that option, whether or not it is good for them. And as we have also stressed, these behavioral tendencies toward doing nothing will be reinforced if the default option comes with some implicit or explicit suggestion that it represents the normal or the recommended course of action.

During winter, a 1°C decrease in the default caused a significant reduction in the average setting. But when choice architects reduced the default setting by 2°C, the reduction in the average setting was actually smaller. The reason? A lot of employees thought that it was too cold, and promptly returned the setting to the one that they preferred. The general rule appears to be that even Humans will reject a default if it makes them really uncomfortable.

Architectural solutions, making things easy or automatic, can have a much bigger impact than asking people to do the right thing.