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nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.
setting default options, and other similar seemingly trivial menu-changing strategies, can have huge effects on outcomes,
Table 1.1 Two cognitive systems Automatic System Reflective System Uncontrolled Controlled Effortless Effortful Associative Deductive Fast Slow Unconscious Self-aware Skilled Rule-following
In many domains, the evidence shows that, within reason, the more you ask for, the more you tend to get.
If people can easily think of relevant examples, they are far more likely to be frightened and concerned than if they cannot.
We often see patterns because we construct our informal tests only after looking at the evidence.
the representativeness heuristic can cause people to confuse random fluctuations with causal patterns.
Unrealistic optimism can explain a lot of individual risk taking,
losing something makes you twice as miserable as gaining the same thing makes you happy. In more technical language, people are ‘loss averse.’
Loss aversion helps produce inertia, meaning a strong desire to stick with your current holdings.
people have a more general tendency to stick with their current situation.
‘framing.’ The idea is that choices depend, in part, on the way in which problems are stated.
When in a cold state, we do not appreciate how much our desires and our behavior will be altered when we are ‘under the influence’ of arousal.
Self-control problems can be illuminated by thinking about an individual as containing two semiautonomous selves, a far-sighted ‘Planner’ and a myopic ‘Doer.’
households adopt mental accounting schemes that violate fungibility for the same reasons that organizations do: to control spending.
Social influences come in two basic categories. The first involves information. If many people do something or think something, their actions and their thoughts convey information about what might be best for you to do or think. The second involves peer pressure.
consistent and unwavering people, in the private or public sector, can move groups and practices in their preferred direction.
‘collective conservatism’: the tendency of groups to stick to established patterns even as new needs arise.
The moral is that people are paying less attention to you than you believe.
in part because people do think that everyone has their eyes fixed on them, they conform to what they think people expect.
Small interventions and even coincidences, at a key stage, can produce large variations in the outcome.
We are also greatly influenced by consumption norms within the relevant group.
public knowledge is subject to a kind of escalation or spiral, in which most people come to think that optimistic view is correct, simply because everyone else seems to accept it.
It follows that either desirable or undesirable behavior can be increased, at least to some extent, by drawing public attention to what others are doing.
If you want to nudge people into socially desirable behavior, do not, by any means, let them know that their current actions are better than the social norm.
Sometimes the merest hint of an idea or concept will trigger an association that can stimulate action. These ‘primes’ occur in social situations, and their effects can be surprisingly powerful.
to behavior that people ‘want’ to take. Often we can do more to facilitate good behavior by removing some small obstacle than by trying to shove people in a certain direction.
need nudges for decisions that are difficult and rare, for which they do not get prompt feedback, and when they have trouble translating aspects of the situation into terms that they can easily understand.
Both investment goods and sinful goods are prime candidates for nudges.
rare, difficult choices are good candidates for nudges.
When feedback does not work, we may benefit from a nudge.
It is particularly hard for people to make good decisions when they have trouble translating the choices they face into the experiences they will have.
When people have a hard time predicting how their choices will end up affecting their lives, they have less to gain by numerous options and perhaps even by choosing for themselves.
A well-designed system expects its users to err and is as forgiving as possible.
The best way to help Humans improve their performance is to provide feedback.
transforming numerical information into units that translate more readily into actual use.
using a simplifying strategy of this kind, alternatives that do not meet the minimum cutoff scores may be eliminated even if they are fabulous on all other dimensions.
the choices become more numerous and/or vary on more dimensions, people are more likely to adopt simplifying strategies.
Collaborative filtering is an effort to solve a problem of choice architecture. If you know what people like you tend to like, you might well be comfortable in selecting products you don’t know, because people like you tend to like them.
One way to start to think about incentives is to ask four questions about a particular choice architecture: Who uses? Who chooses? Who pays? Who profits?
The most important modification that must be made to a standard analysis of incentives is salience. Do the choosers actually notice the incentives they face?
iNcentives Understand mappings Defaults Give feedback Expect error Structure complex choices
The more choices you give people, the more help with decision making you need to provide.
It is usually good to provide people with lots of options, but when the question is complicated, sensible choice architecture guides people in the right directions.
change is to be seriously addressed, the ultimate strategy will be based on incentives, not on command-and-control.
when choices are fraught, when Nudgers have expertise, and when differences in individual preferences are either not important or can be easily estimated, then the potential for helpful nudging is high.
cooling-off periods make best sense, and tend to be imposed, when two conditions are met: (a) people make the relevant decisions infrequently and therefore lack a great deal of experience, and (b) emotions are likely to be running high.
