Nudge: Improving Decisions About Health, Wealth, and Happiness

Nudge: Improving Decisions About Health, Wealth, and Happiness Probably The Most Influential Popular Science Book Ever Written BBC Radio Nudge Has Changed The World You May Not Realise It, But As A Result Of Its Findings You Re Likely To Live Longer, Retire Richer And Maybe Even Save Other People S Lives The TimesFrom Cass R Sunstein And Richard H Thaler, Winner Of The Nobel Prize In Economics, Nudge Is The Book That Has Changed The Way We Think About Decision Making Nudge Is About Choices How We Make Them And How We Can Make Better Ones Every Day We Make Decisions About The Things That We Buy Or The Meals We Eat About The Investments We Make Or Our Children S Health And Education Even The Causes That We Champion Or The Planet Itself Unfortunately, We Often Choose Poorly We Are All Susceptible To Biases That Can Lead Us To Make Bad Decisions And, As Thaler And Sunstein Show, No Choice Is Ever Presented To Us In A Neutral Way By Knowing How People Think, We Can Make It Easier For Them To Choose What Is Best For Them, Their Families And Society Using Dozens Of Eye Opening Examples And Original Research, The Authors Demonstrate How To Nudge Us In The Right Directions, Without Restricting Our Freedom Of Choice How Often Do You Read A Book That Is Both Important And Amusing, Both Practical And Deep A Must Read For Anyone Who Wants To See Both Our Minds And Our Society Working Better Daniel Kahneman, Author Of Thinking, Fast And Slow I Love This Book It Is One Of The Few Books I Ve Read Recently That Fundamentally Changes The Way I Think About The World Steven D Levitt, Co Author Of Freakonomics

Richard H Thaler was awarded the 2017 Nobel Prize in Economics He is the Charles R Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago s Booth School of Business, where he is the director of the Center for Decision Research He is also the co director with Robert Shiller of the Behavioral Economics Project at the National Bureau of Economi

➪ Nudge: Improving Decisions About Health, Wealth, and Happiness Read ➲ Author Richard H. Thaler – Ultimatetrout.info
  • Paperback
  • 306 pages
  • Nudge: Improving Decisions About Health, Wealth, and Happiness
  • Richard H. Thaler
  • English
  • 13 January 2018
  • 9780141040011

10 thoughts on “Nudge: Improving Decisions About Health, Wealth, and Happiness

  1. says:

    I don t understand why this is a runaway bestseller it s just not that enthralling I ve been reading lots of books lately about behavioral psychology and economics why people make the decisions we do, economically and in other life areas But Predictably Irrational and Made to Stick both explore these questions in a much engaging way Nudge is mostly concerned with how companies and governments can practice what the authors term libertarian paternalism gently, noncoercively pushing people toward doing something that they really want to do For example, a company might, by default, enroll new employees in a 401K plan and put a certain salary percentage into that plan The employees can opt out or change their contribution amount at any time, but by enrolling everyone by default, the company does an end run around its workers natural procrastination tendencies, without forcing them into anything.Another use of nudging, this one on the state level, might be to require that everyone signing up for a driver s license check a box saying either Yes, I want to be an organ donor or No, I don t wish to be an organ donor Or, a state could change its laws so that people are, by default, assumed to be willing donors unless they say they don t want to This would greatly increase the number of organs available for emergency transplants.So, interesting stuff but not enough to fuel an entire book I wound up skimming quite a bit, and while some of the anecdotes are funny and interesting, many of the writers proposals are dry unless you happen to be fascinated by the particular social or economic issue they re addressing It s worth picking Nudge up to see if it grabs you just don t be surprised if it lets go about 100 pages in.

  2. says:

    This one took me longer to read that is reasonable for a book of its length or the clear style it is written in I mean, such a simply written text of 250 pages ought to have finished in no time The problem was that I don t live in the US and so many of the examples made the book a struggle for me All the same, there are ideas in this book that are important no matter where you live.Don t you just love the internet I wanted to start this paragraph with that quote by G ring, when I hear the word culture I reach for my luger , but it turns out it is actually a quote from a play by Hanns Johst which is even better, Whenever I hear of culture I release the safety on my Browning I have much the same reaction when I hear the word choice There is a false equality set up between freedom and choice It is as if the two terms are identical Since I ve had to read through dozens of American examples in this book of why this identity may not always apply, I would like to give an Australian example to explain some of the key concepts of this book.A couple of decades ago Australian workers went without a national pay increase and rather had this money directed into superannuation Superannuation is essentially forced saving for retirement Over the years this required percentage of an employee s wage dedicated to superannuation has increased so that today it stands at 9% Everyone knows that if people are to retire on anything like their current salary they need to put aside around 15% of their lifetime earnings The gap between 9% and 15% is one that will be, for most people, borne by reduced living standards at the end of their lives.The previous Australian Government decided that it would be a good idea to introduce choice into the superannuation system So whereas previously most people were corralled into mostly industry superannuation funds that were not for profit meaning they had low fees and profits went back into the fund , the new system opened up the superannuation business to private operators People would now be able to choose which fund to invest their money in Where did I put that Luger The industry funds obviously didn t like this idea But like choice, competition is always a good thing and can never be criticised, right Well, it is not quite so easy The problem is that the industry funds asked the previous government to structure the new system so that all funds would have to disclose all fees and charges associated with their products This would clearly have favoured the industry funds that often don t charge fees at all The government refused to include this disclosure of information as a proviso in the legislation.Of course, this made freedom of choice a bit of a joke You can t really have freedom if your choice is also based on your being free from vital information.What made matters worse was that the financial planning industry in Australia isn t as well regulated as it might be Financial planners generally receive commissions from the financial institutions whose products they sell oh, sorry, encourage you to take up So, rather than providing you with a plan that is unequivocally in your best interests, the financial planner you are seeing may have actually, will have a strong motivation to provide you with information that is in their best financial interests, rather than yours.Economists would say that despite all of the obvious problems with this new system of choice it is still better as people always act in their own best interests as rational economic agents and choice even if some of those choices might be biased against people is always better.The writers of this book define themselves as Libertarian Paternalists Essentially, they also believe that choices are good things however, they acknowledge that choice alone isn t enough and that people aren t always economically rational entities.One of the ideas I found most useful in this book is the idea of choice architecture They do not believe in taking choices away from people, but they recognise that being presented with a bewildering array of choices is often enough to stop people from making any choice at all The book opens with a discussion of a school cafeteria and how you can affect the eating habits of kids simply by how you place the food on display That is, putting healthier food at eye level, rather than fatty, sugary foods, will nudge kids towards eating healthy food This is not a subtle change this nudge can drastically improve the eating choices made by the kids The kids still have a choice to eat rubbish, but this simple change nudges them towards eating better The point is that you simply don t have the option to display the food in a non nudge way You have to make some choice about how you are going to display the food so doesn t it make sense to set up the display so that people are nudged towards eating well, rather than badly Choices don t occur in a vacuum and one of the lessons of this book is that if we are going to provide choices we need to think about the consequences of the choice architecture we put in place in which those choices are going to be made.Another of those pieces of choice architecture is going to depend on what is the default choice This is because, people being people, many of us are going to get bored early on in the decision making process and just go for the default Therefore, the default should be the choice that is most likely to meet the needs of those required to make the choice There is a very disturbing discussion of the Part D prescription drug coverage process in the US in which people who do not make what is an incredibly difficult choice are randomly assigned to a range of default plans that takes the principle of government non intervention to absurd extremes.The other idea that is very strongly pushed in this book is that people are very much loss averse This is an idea that has been in virtually every book I ve read lately, but this book does than most to explain the consequences of this aversion Going back to our superannuation example, one of the reasons why people don t increase their superannuation contributions despite knowing that it would be good for them in the long term is that it involves them in a perceived loss now The authors discuss a way of encouraging higher contributions which they call the pay later plan Essentially people are encouraged to commit to increasing their contributions at the time of their next pay increase This way the increase in contributions does not feel like a loss and the authors show that this way of increasing contributions leads to higher contributions than virtually any other method.I particularly liked their solution to the gay marriage issue that is producing so much heat and so little light in society lately Their answer is for the government to get out of the marriage business altogether That the government should enable people to have their relationships recognised on the basis of it being a civil union and that this be open to all couples, irrespective of their sex or the sex of their partner This civil union would be the legal and social recognition of a couple s partnership Marriage then would be left up to religious bodies to worry about If a particular church refuses to marry you because you want to marry someone they don t think you should well, find yourself another church or even better yet, avoid churches altogether.The last part of this book is a defence of the idea of nudges against radical free market types the sorts of people who, like our previous government, think that choice is always good and ill informed choice is even better The idea that people might be nudged towards donating their organs after they ve finished with them, nudged to eat better food or to get better health care cover or to slow down when approaching a dangerous intersection all just seem obviously good to me, so this part of the book was preaching to the converted.But then, like Hegel, I don t equate freedom with choice, but with needs and how we understand those needs I think freedom has less to do with getting to choose and to do with getting adequate information on the consequences of that choice This book doesn t go as far as I might along this path but at least it recognises that we are human and that we often need help in making decisions that are in our own best interests If it was up to me there would not only be no freedom of choice in superannuation, but superannuation would be a tax and would be run by the Australian Tax Office But don t get me started This would be an even interesting book if you live in America, given the nature of the examples, but either way, this is still worth a look.

  3. says:

    The book has some value, but the title led me to pick it up under the belief that it might help me to understand myself better and learn better ways to navigate my choices It turned out to be of a laundry list of examples how businesses try to manipulate us, a list that was nudged into book length

  4. says:

    December bookclub read for my sit in bookclub and when I checked in my book shop for this Book and was directed to the ECONOMICS BUSINESS section I did quite a bit of eye rolling, I had automatically decided I wasn t going to like this book and as christmas reading goes this was going to be a taxing read But I was pleasantly surprised at how readable and relatable the book was and how our decision making can be influenced by Nudges of all kinds and how society reacts to Nudges.Only 3 out 10 people in the group finished the book and yet the discussion created was lively and interesting with everyone participating and having an opinion Not one I would be recommending but certainly a book that has food for thought.

  5. says:

    This comes with a whole bunch of big name endorsements the physicist Brian Appleyard, Stephen Leavitt of Freakanomics fame and we re told by the end of Introduction that it is making an impact with Obama and Cameron and so having a policy impact in both the UK and USA What is , it is now marketed as a new international edition As I ploughed my way through this I kept thinking of a comment by the great photographer Eve Arnold to the effect and with a few expletives that she was not the genius many proclaimed, it was just that everyone else was so mediocre the praise singers do themselves no favour by shouting about the marvel that this book is.It has one central idea, grounded in social psychology, that with careful thought and planning people can be encouraged to freely chose things that are good for them, with the corollary that too much choice or unclear choices will lead to many most people making bad choices So far, so good and the first part about of the book does a pretty good job of explaining some interesting but not that complex social psychology Alas, then the new international edition goes off track in that, aside from a brief postscript considering some issues about the circumstances of the 2008 financial crisis, the vast majority of the examples under discussion rely on a some pretty detailed explorations of US based material which is a perverse understanding of international made all the frustrating by Thaler Sunstein s jokey, blokey little self referential asides.Leaving aside the difficulties of behavioural economics the first major problem with the book, though, is what is not in it and as a consequence what it is able to be used for There is little doubt that nudging is a good thing we know that we are likely to continue with decisions when we feel like we have chosen freely the psychologists call this compliance, and it is a big thing in theories of behaviour change The big issue for me is not how to nudge well but the direction in which we nudge, and so far it looks to me that the policy applications of this idea have in many cases been little than a cover for increased privatisation, for a removal of services and social support networks and to generally undermine the social world that many of us rely on to survive There is a further and key deficiency related to this bigger picture of what the nudges are used for, and that is its failure to explore the broader socio political question of who gets to nudge us or in their jargon, who gets to be a choice architect For a book that has as one of its areas of application politics they seem remarkably unaware of or, likely, are extremely good at obfuscating a key dynamic of politics power while at the same time having constructed a text that is all about making sure that those of us who are subject to various forms of political power be it about health care plans, buying gas, donating organs or managing our pension funds do what the wielders of power want us to do Their notion of libertarian paternalism in many ways an oxymoron but I ll cut them some slack because they are, after all, economists applying psychology to broader social contexts so have to grapple with two discipline areas that claim to be sciences in an effort to assert their credibility seems to be a synonym for soft power , so beloved of contemporary liberal imperialists They set up two ideal type figures Econs and Humans and then build a text around a series of methods that enhance the likelihood that irrational Humans will make better decisions, where better is defined by what the rational Econs would do In short, hidden within all the popularising language, this is text that is designed to promote ways to make us like the Rational Economic Man so beloved of neo classical economics It is not that they want us to become powerful people or to gain a greater degree of autonomy and control over our own lives, it is that they want to make us compliant by making the decisions others want us to make.So, my problem is two fold First, this is a book that is dangerous because it focuses only on the means and not the ends, in that the ends that seem to be taken for granted are those that are defined by a model and theory of economics that lies at the heart of the current crisis Second, even if I accept that model and its theories which I don t it is not that this book is wrong, just that it is disappointing Now I admit that this may be a characteristic of these popular academic titles and if I read of them I d be less disappointed but as I continued through this I felt and like Eve Arnold wearied by the mediocrity of others I get enough of that in my own writing.

  6. says:

    I was pleasantly surprised by this book It starts out like many other pop psychology books, describing an array of psychology experiments that are so often in the literature But, at some point in the book, the story takes a turn into a direction that few other books seem to touch Nudge is really about the small, subtle pushes that our modern day world makes to sway one s opinion or real world choices.The book devotes a separate chapter to each of several real world scenarios When a company gives employees a choice among investment plans, how should the be described Should there be a default plan such that, if no explicit choice is made, gets chosen automatically What about health plans they are very complex, and is there one that is best for everyone Probably not Then there are mortgage plans, organ donation, college funds, and on and on.People are often lazy, and they make a choice once and then forget about it But, should a company or a government give a subtle nudge by intelligently designing a form, an intelligent default, and so on Or should the choice be left 100% to the customer The authors of this book argue that libertarian paternalism may be the answer Give people the full cast of choices, and give people the freedom to make the wrong choices But, also give people a default choice that may be better than most of the choices.Some choices are fixable If you take your clothes to a dry cleaning establishment and they do a poor job, then the next time it is easily correctable in the future just take your clothes somewhere else But other choices are not correctable How many chances do you have in choosing a spouse While in theory it is a correctable choice, it is not one that my people make over and over again And, by the way, why should the government have any say at all about marriages If there are any government benefits to marriage, say taxes, laws, etc., why not distribute those benefits to everyone The authors argue that there is not reason for the government to be in the marriage business at all.This book is a quick and easy read I recommend it to people who are trying to formulate policies and even to those who are designing forms for public use.

  7. says:

    As an economist, Nudge was a book that I desperately wanted to like Unfortunately, I was disappointed Perhaps my low rating of the book stems from my high expectations of a book co authored by the well regarded behavioral economist Richard Thaler Without such expectations, my rating might have been higher But at the same time, without such expectations, I might not have bothered to read the book at all.The only interesting part of the book is the first part, which consists of the first five chapters Here, the authors lay out the main premise of the book The decisions humans make are affected by nudges Since nudges are not easy to define, they are best explained through examples The clearest example of a nudge is a default When you register online at a site, you are often asked, Would you like to receive future emails By default this box could be either checked or not checked The default matters that is, different results emerge under different defaults The main point of the book is that nudges matter and thus should be carefully designed.The rest of the book presents a laundry list of policies to which we should apply this principle For me, this got boring fast For some reason, the authors seem to be obsessed with identifying every possible nudge and offering their nudge design suggestions The end of the paperback version of the book became really ridiculous a bonus chapter of twenty nudges I think that the hardcover version is saved from this madness, because the bonus chapter was added after the publication of the hardcover version.Many may find Nudge overly political The authors weigh in on what they believe to be good nudges on a large number of hot political issues such as Medicare and same sex marriage I personally didn t mind their political stances as much as I minded the lack of economics.The book is also poorly written I felt that the publishers gave the authors complete free reign since the authors were well regarded academics, and obviously academics don t need editors One problem with the writing was the lack of a targeted audience The book is supposed to be targeted towards a mass audience or at least, that is the target of the book s marketing efforts It is not a textbook or standard teaching material targeted towards undergraduate economics majors It is also not a serious academic discourse targeted towards other economists And yet, although it s supposed to be targeted towards the layman, the writing is oftentimes confused about its audience Additionally, I didn t care for the writing style While I do enjoy a casual and conversational tone, this book suffered from unnecessary tangential remarks that detracted from the main point All of the writing issues in this book could have been easily rectified with a good editor I don t fault the authors as much as I do the publishers for that oversight.I weakly recommend Part I of Nudge to the intellectually curious layman The rest of the book I recommend only to those want to read a laundry list of political suggestions.

  8. says:

    Libertarians are always annoying, and these two are no exception Their particular brand of libertarianism they call libertarian paternalism and it involves the idea of nudges, which are things designs incentives that push people toward better options Better options would include choosing healthfullier food, not smoking, not driving drunk, enrolling in your company 401 k plan vs not enrolling, lessening your factory s carbon emissions An example of libertarian paternalism of which they approve is requiring fast food restaurants to list calorie counts More information to help you decide what to eat is good, they think, but banning high calorie menu items outright would constrict freedom, thus bad.The way choices are presented to you is called choice architecture An example of poor choice architecture was George W Bush s new entitlement for prescription drugs for seniors, Medicare Part D There was an enormous number of plans, no good way to compare their various elements to see which plan would work best for you, and if you were unable to decide on a plan, one was selected at random for you Not just seniors, but their doctors, pharmacists, and experts drafted by the authors found the choice architecture for Medicare Part D incredibly confusing, and picking out a plan took hours even for experts and economists Another example of horrible choice architecture, or choice design, would be Palm Beach County, Florida s infamous butterfly ballot in the 2000 presidential election Many voters couldn t tell which punch hole was designated for which candidate, and as a result voted for a candidate they had not intended to The authors discuss nudges and choice architecture in the contexts of investing, health insurance, organ donation, school choice, privatizing marriage, and other areas The most compelling chapter for me was on Medicare Part D, because I m kind of a health insurance nerd Weaker chapters were on school choice the authors uncritically accept the notion that vouchers are good and on medical malpractice insurance.On the latter they argue that the price of health insurance contains the cost of malpractice lawsuits, and therefore if a buyer of health insurance could waive filing such suits, their health insurance premium would be cheaper, and doctors and hospitals would also be able to charge them less They claim that malpractice lawsuits increase medical costs by 5 to 9 per cent First, who knows if that hazy range of numbers is accurate Although tort reform is of course lovingly put forward by Republicans every time the issue of healthcare costs arises, the consensus among non Republicans is that malpractice litigation costs are a tiny percentage of overall costs and not worth addressing What bugs me about this chapter is that the authors never bother to ask, or to address just because the cost of lawsuits might vanish from their bottom line, why do we automatically believe that doctors and hospitals would charge a patient less, rather than take the savings as increased profit How would having two types of health insurance policies, one where you could sue your doctor and one where you couldn t, affect the doctors themselves Would doctors take patients from each category, or would they restrict their practices only to patients who had agreed not to sue them If the former, would they charge different prices to the patients according to whether or not they might sue In other words, this is interesting theoretically, but how would it work in practice The authors don t care, because they are mostly interested in these clever theoretical notions.The chapter on privatizing Social Security was another instance of mental masturbation It looked at the system in Sweden, where accounts had been privatized, to see how the choice architecture had affected the way beneficiaries designed their investment plans Yet the authors don t question whether privatizing Social Security is a good idea or a terrible idea even though the paperback edition of the book went to press after the giant stock market crash of 2008 2009 and the book contains a postscript discussing some aspects of the crash that could have been avoided with proper nudges They merely advise that although George W Bush s yearning to privatize never went anywhere, some version of this proposal is likely to be considered again before long Well, the crash of 2008 killed all thoughts of Social Security privatization, at least until we become idiots again Obviously, when countries and economies are run by idiots, all bets are off.They wrap up the book with ideas presented to them, via their website, for other nudges The stupidest of these is trayless cafeterias when people use trays, they tend to waste food and napkins , which is a splendid idea for societies where people have four hands.

  9. says:

    This is a terrific book The authors cover terrain which has been explored recently in a whole slew of books loosely speaking, why we humans persistently engage in behavior patterns which do not benefit us in the long term Their own research, at the University of Chicago, builds upon the work of Tversky and Kahneman in behavioral economics very much in vogue this past few years In the book, they provide a funny, engaging, remarkably clear exposition of the various factors which lead us to make poor decisions This alone would make it worth reading What makes this book stand out though is that they actually suggest remedies that might help us save ourselves from our own flawed gut instincts.

  10. says:

    I second guessed my purchase of Richard Thaler and Cass Sunstein s Nudge Improving Decisions About Health, Wealth, and Happiness, almost the minute I received my e mail receipt I had already read Malcom Gladwell s Blink, and heard about the literary disaster that is Sway, and yet there I was, reading Nudge s introduction about the arrangement of cafeteria food.I m glad I did While Thaler and Sunstein are happy to revel in the small ways that their insights into choice architecture can lead to better or worse choices, they also lay out their political principles and detail their impact on current policy debates e.g., Social Security, Medicare Part D, Education To top it all off, they begin the book with a treatment of our cognitive failings, distinguishing between our automatic and reflective processing systems what s not to love , leading right into their arguments for how to help the automatic majority overcome their cognitive frailty without infringing the reflective minority s ability to choose.So what is choice architecture Well, are you choosing out of ten choices, or 100 Are you automatically enrolled in one choice or another if you don t make an active decision How is that default set How is information presented to you to about the available choices All of these questions speak to choice architecture in other words, the arrangement and organization of choices which has a nasty habit of leading individuals to choices that they themselves would not find optimal see don t be bob bias, the mind and morality.Further, choice architecture, both good and bad, is pervasive and unavoidable This point is essential to Thaler and Sunstein s argument if you are a libertarian Ignoring choice architecture won t make it go away, it will only make it likely that the choices favored by choice architecture are likely to be poor For instance, you can make the default option for new employees enrolled at 5% in a 401 k with an option to opt out, or you can make the default option to not be enrolled as is often the case If you stick with the current default, many who would otherwise enjoy being enrolled will not do so because of the choice architecture Thaler and Sunstein recommend acknowledging the importance of choice architecture and deliberately deciding on its design.Thaler and Sunstein aren t interested in helping individuals pick out their dry cleaners as the authors note, if a dry cleaner performs poorly, it is fairly easy for individuals to make a better decision the next team.Rather, people are most likely to need nudges for decision that are difficult, complex, and infrequent, and when they have poor feedback and few opportunities for learning Individuals are primed to make poor choices for Medicare Part D, Mortgages, and retirement investments Thaler and Sunstein don t advocate for eliminating choices because of these problems On the contrary, their final chapter points to the infamous third way separate from both the command and control left and the single minded choice monkeys of the libertarian right.There needn t be a war between no choice and unlimited choice Thaler and Sunstein spend around 250 pages explaining that this is indeed a false choice Like myself, they side with the libertarians when it comes to the importance of choice, and side with the left when it comes to the failure of choice to solve all problems Choice is important Coercion isn t necessary Focus on the choice architecture.Oh, and I have to add As someone who has long supported responding to the gay marriage debate by taking government out of the marriage business perhaps keeping a civil union or partnership business and leaving it to independent churches, I was very happy to see Thaler and Sunstein put forth such an argument in Nudge.Whether you are on the left or right, worth a read Taken from my post

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