Nudge: Improving Decisions about Health, Wealth, and Happiness

Nudge: Improving Decisions about Health, Wealth, and Happiness

by Richard H. Thaler, Cass R. Sunstein

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Product Details

ISBN-13: 9780143115267
Publisher: Penguin Publishing Group
Publication date: 02/24/2009
Edition description: Updated
Pages: 320
Sales rank: 11,272
Product dimensions: 5.40(w) x 8.40(h) x 0.90(d)
Age Range: 18 Years

About the Author

Richard H. Thaler, a pioneer in the fields of behavioral economics and finance, 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 Economic Research and the 2015 President of the American Economic Association. He has been published in several prominent journals and is the author of a number of books, including Misbehaving: The Making of Behavioral Economics.
 
Cass R. Sunstein is the Robert Walmsley University Professor at Harvard Law School, where he is the founder and director of the Program on Behavioral Economics and Public Policy. He is by far the most cited law professor in the United States. From 2009 to 2012 he served in the Obama administration as Administrator of the White House Office of Information and Regulatory Affairs. He has testified before congressional committees, appeared on national television and radio shows, been involved in constitution-making and law reform activities in a number of nations, and written many articles and books, including Simpler: The Future of Government and Wiser: Getting Beyond Groupthink to Make Groups Smarter.

Read an Excerpt

Common "Nudges"

  1. The design of menus gets you to eat (and spend) more. For example, lining up all prices on either side of the menu leads many consumers to simply pick the cheapest item. On the other hand, discretely listing prices at the end of food descriptions lets people read about the appetizing options first…; and then see prices.
  2. "Flies" in urinals improve, well, aim. When Amsterdam's Schiphol Airport was faced with the not uncommon issue of dirty urinals, they chose a unique solution: by painting "flies" in the (center of) commodes, men obligingly aimed at the insects, reducing spillage by 80 percent.
  3. Credit card minimum payments affect repayment schedules. Among those who only partially pay off credit card balances each month, the repayment level is correlated with the card's minimum payment — in other words, the lower the minimum payment, the longer it takes a consumer to pay off the card balance.
  4. Automatic savings programs increase savings rate. All over the country, companies are adopting the Save More Tomorrow program: firms offer employees who are not saving very much the option of joining a program in which their saving rates are automatically increased whenever they get a raise. This plan has more than tripled saving rates in some firms, and is now offered by thousands of employers.
  5. "Defaults" can improve rates of organ donation. In the United States, about one–third of citizens have signed organ donor cards. Compare this to Austria, where 99 percent of people are potential organ donors. One obvious difference? Americans must explicitly consent to become organ donors (by signing forms, for example) while Austrians must opt out if they do not want to be organ donors.

(Continues…)



Excerpted from "Nudge"
by .
Copyright © 2009 Richard H. Thaler.
Excerpted by permission of Penguin Publishing Group.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

NudgeAcknowledgments
Introduction

Part I: Humans and Econs

1. Biases and Blunders
2. Resisting Temptation
3. Following the Herd
4.When Do We Need a Nudge?
5. Choice Architecture

Part II: Money

6. Save More Tomorrow
7. Naive Investing
8. Credit Markets
9. Privatizing Social Security: Smorgasbord Style

Part III: Health

10. Prescription Drugs: Part D for Daunting
11. How to Increase Organ Donations
12. Saving the Planet

Part IV: Freedom

13. Improving School Choices
14. Should Patients Be Forced to Buy Lottery Tickets?
15. Privatizing Marriage

Part V: Extensions and Objections

16. A Dozen Nudges
17. Objections
18. The Real Third Way
19. Bonus Chapter: Twenty More Nudges
Postscript: November 2008
Notes
Bibliography
Index

What People are Saying About This

From the Publisher

"Fundamentally changes the way I think about the world. . . . Academics aren't supposed to be able to write this well." —Steven Levitt, co-author of Freakonomics

"[An] utterly brilliant book. . . . Nudge won't nudge you-it will knock you off your feet." —Daniel Gilbert, author of Stumbling on Happiness

"Nudge is as important a book as any I've read in perhaps twenty years. It is a book that people interested in any aspect of public policy should read. It is a book that people interested in politics should read. It is a book that people interested in ideas about human freedom should read. It is a book that people interested in promoting human welfare should read. If you're not interested in any of these topics, you can read something else." —Barry Schwartz, The American Prospect

"This book is terrific. It will change the way you think, not only about the world around you and some of its bigger problems, but also about yourself." —Michael Lewis, author of Moneyball

Interviews

A conversation with Richard Thaler & Cass Sunstein

Q: What do you mean by "nudge" and why do people sometimes need to be nudged? 

A: By a nudge we mean anything that influences our choices. A school cafeteria might try to nudge kids toward good diets by putting the healthiest foods at front. We think that it's time for institutions, including government, to become much more user-friendly by enlisting the science of choice to make life easier for people and by gentling nudging them in directions that will make their lives better.

Q: You discuss tricks our minds play on us, and biases we have. What are some of those? 

A: As with visual or optical illusions, our minds can play tricks on us. For example, we are very sensitive to the way choices are described or "framed." A medical treatment can be made more or less attractive depending on whether the outcomes are described in terms of the chances of survival or the chances of death, even though these are, of course, equivalent.

Q: What are some of the situations where nudges can make a difference?

A: Well, to name just a few: better investments for everyone, more savings for retirement, less obesity, more charitable giving, a cleaner planet, and an improved educational system. We could easily make people both wealthier and healthier by devising friendlier choice environments, or architectures.

Q: Can you describe a nudge that is now being used successfully? 

A: One example is the Save More Tomorrow program.  Firms offer employees who are not saving very much the option of joining a program in which their saving rates are automatically increased whenever the employee gets a raise. This plan has more than tripled saving rates in some firms, and is now offered by thousands of employers.

Q: You are very adamant about allowing people to have choice, even though they may make bad ones. But if we know what's best for people, why just nudge? Why not push and shove? 

A: Those who are in position to shape our decisions can overreach or make mistakes, and freedom of choice is a safeguard to that. One of our goals in writing this book is to show that it is possible to help people make better choices and retain or even expand freedom. If people have their own ideas about what to eat and drink, and how to invest their money, they should be allowed to do so.

Customer Reviews

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Nudge 3.4 out of 5 based on 0 ratings. 80 reviews.
Romero More than 1 year ago
I bought this book for my nook but was disappointed to realize, after reading a few pages, that many of the figures that are present in the print version are not present in the ebook. In place of the figures, there are boxes with a statement saying that rights were not granted for digital media, and "please refer to print version." I thought that the point of buying a nook and ebooks was to, for the most part, replace the print ones. It's an interesting book, but I wouldn't buy the e-version until they have the figures and exact same content as print. Barnes and Noble should tell people in advance whether an ebook does not have same content as the print version. Not sure if by not warning people, B&N gives grounds for a class action lawsuit, but it is, at best, unethical not give such warning. Let the buyer beware is not exactly the way to satisfy your customers.
Nilesh Saraf More than 1 year ago
Many important figures are missing. The formatting is very bad, headings are not in bold and spacing is wrong. it does not feel like a book but instead some draft version of the book. Barnes and Noble should not be selling the nook version if they arent able to deliver the e-book experience. very disappointed - dont even consider it.
Missive65 More than 1 year ago
This was recommended by someone who read the book but I should have read more excerpts before purchasing. I have only gotten through the first 3 CDs and not very motivated to spend the time listening to the remaining cds. The substance is somewhat basic, common sense. I will eventually listen to the remaining CDs and hope the content improves.
Anonymous More than 1 year ago
Anyone who has a psych degree will know these ideas/priciples. May be interesting to others though.
Anonymous More than 1 year ago
Great techniques for the slow brainwashing of the great mass of people who have no interest in thinking for themselves. A must read for any aspiring dictator, whether they dream of controling a country or a corporation.
lollo55 More than 1 year ago
Read this for a sociological project and appreciated the humor with which the authors addressed some of the issues. It contains great examples of how our benevolent overseers can nudge us in the right direction and help us as mere humans make the decisions we might otherwise be unwilling or too lazy to make for ourselves. My only criticism is that the points are made through examples from many areas and then repeated and repeated and REPEATED!!!! It could we'll have been shorter and still very good
Anonymous More than 1 year ago
Must read for anyone interested in public or private policy issues.
timtom on LibraryThing 30 days ago
In this well-structured book, Thaler and Sunstein explore the various ways to present choices to users in a way that will encourage them to wisely use their right to choose. "Choice architecture" seems a very logical concept, yet as the authors are quick to point out, life's complex choices (such as retirement plans) are usually presented in a very discouraging way and more often than not with no sensible "default option". The base idea of the book is interesting, and well illustrated, but in the end it remains a whole book centered around one single idea. And while the proposals to reform medical insurance or retirement plans are very sensible (although very US-centric), the authors also embark in half-baked and exotic ideas, such as the privatization of marriage, that tend to miss the point.People in charge of social security systems should definitely read this book. Other may skim through it to pick up the main idea, which is indeed brillant, but they won't need to read all 300 pages to do so :)
slothman on LibraryThing 30 days ago
I saw some summaries of ideas in this book and heard that they're popular among the economic advisors to the Obama campaign, so I picked up a copy to take a look.Thaler and Sunstein begin by acknowledging that the species homo economicus, Econs, are common to economists' theories, but their behavior is not that of homo sapiens, Humans. Since people do not always act in precise accordance with game theory, it behooves "choice architects" to take this into account when devising systems to serve Humans.They articulate an eloquent alternative to the "we know what's good for you and one size fits all" approach common to the left and the "every man for himself" approach common to the right. They advocate the level of choice expected of libertarian systems, but with default choices carefully architected to give good default results for people who, for whatever reason, don't do thorough research on maximizing the benefits from their array of opportunities. They also advocate mandates of transparency (so it is easy to get the data on how well you are being served) rather than mandates of performance (which are much more expensive to comply with, and can much more easily go drastically wrong if the proposed incentives turn out to be perverse).Overall, a fine starting point for policy discussions; I look forward to seeing these ideas take root in our government in the near future.
rivkat on LibraryThing 30 days ago
Sadly, Thaler and Sunstein use most of the same key research and examples as Lehrer, so doubling up was not wise. They are more policy-oriented than Lehrer: they want to change various defaults so that people do smarter things based, essentially, on the inertia of the status quo, along with a dose of changing the salience of various attributes of our possible choices. So they want to get more people saving for retirement by making enrollment in retirement plans the default, and by allowing people to choose now to save just a little bit but increase their contributions over time¿it¿s a lot easier to say ¿I¿ll save money later¿ than to say ¿I¿ll save money today,¿ but by the time later rolls around, inertia makes it less likely that you¿ll change your mind, and so you¿ll start saving more. Wonky popularizing stuff: if you didn¿t know the behavioral economics background, this would be a chewy introduction.
kristenn on LibraryThing 30 days ago
This is just "improving decisions about..." on a macro level. You won't get any self-help from it, just potential policy ideas to lobby for. I went into the book with the impression that their political views were very similar to my own and that view didn't change. Some really interesting ideas to chew on and maybe work into conversations. And refreshingly low on the ideology and partisanship. No villains screamed about. We need more stuff this mellow. Some chapters seem more thought-out than others. The marriage discussion was practically incoherent, although I did pick up on a rather disturbing endorsement of alimony. And absent-minded ivory tower stereotypes aside, it's hard to believe they genuinely can't imagine what the argument would be against paying for organ donations. The idea of waiving liability rights in exchange for reduced healthcare costs was the most interesting section. The one on public school choice skirted too many of the standard arguments to feel very useful.
modell3 on LibraryThing 30 days ago
The book starts off well, but then perseverates on the author's formula for apparently solving world hunger (RECAP). This model is never fully explained and seems naive at the outset.
Cecilturtle on LibraryThing 30 days ago
There are many factors that influence our decisions without even our realizing it. In this book, Thaler and Sunstein analyze the decision-making process, the human tendencies that impede the process, the factors that influence them and ways to help people make better decisions. It's a fairly simple concept that is well demonstrated through concrete examples and applications. The injection of humour makes this rather dry material quite palatable.For me, the theory was much more interesting than the practice and it was easy for me to relate to the various situations presented. I do not agree with their idea of privatizing marriage - their paradigms are limited to their construction, although I'm sure that presented with different arguments, the theory would uphold. Very American-centric, but interesting nonetheless.
wvlibrarydude on LibraryThing 30 days ago
This was a better summary of research into behavioral economics, psychology and decision making. With that section done, it moved into the realm of architecture in how to use that knowledge to gently "nudge" people into making decisions that are good and to avoid decisions that would be harmful. I like the bend on the "libertarian paternalism" that they promote. Basic idea is to be paternal in the architecture, but that the motivations should be gentle nudges and not forceful, especially with the ability for people to still make decisions that can harm them. Good work and analysis, but I was still left a little distant on some of the topics discussed.
EricaSJ on LibraryThing 30 days ago
If you've never read in this field before and want a quick overview, it will be interesting reading. However, many of the experiments and anecdotes sounded awfully familiar to me. If you've already read books such as The Paradox of Choice, Why Smart People Make Big Money Mistakes, The Winner's Curse and Predictably Irrational, you could probably skip this one. I was also disappointed that there wasn't more in the book about organizing things to yourself positive nudges. I don't want to depend on an employer or government to point me in the right direction--by the time they start incorporating these ideas, years may have gone by!
jstrandj on LibraryThing 30 days ago
Remarkably accessible account of behavioral economics that makes many concrete applications to personal and political life--and sparks thinking about many more possibilities to make it easier for people not only to know what they'd like to do, but actually do it.
amimariscal on LibraryThing 3 months ago
This book starts out wonderful, full of insight for marketing and decision architects, but quickly digresses when it starts to address social problems with it's brilliant insight, but does so in a limited and boring manner.
LynnB on LibraryThing 3 months ago
Nudges are small, relatively non-intrusive ways that decision makers in government or industry can encourage people to make choices that are better for their health, wealth, or other forms of well-being. The authors explain the concept of "choice architecture" and how it can be used in designing public policy.This book is well written, easy to read and explores issues of personal freedom, paternalism, and the role of the state.
NatCat13 on LibraryThing 3 months ago
The book starts off very interesting but gets boring around the middle, when it gets too technical and repetitive.
jxn on LibraryThing 3 months ago
There exists a potpourri of pop psychology/economics books that tell us we typically aren't aware or reflective about the decisions we make, the options and data before us, and the consequences of our actions (especially in the long term). Nudge is one of them, but probably not the most innovative nor the most exhaustively exploratory. Nudge is helpful and often somewhat insightful, but it is partially uncritical--not of its presumptions, as it tries to defend it's philosophical position well and succeeds at least somewhat--but of the potentially adverse fallout of some of the seemingly simple policy modifications it endorses. It furthermore fails to recognize that it's so-called "libertarian paternalist" position rejects completely the contemporary conservative/libertarian presumption that corporations deserve similar liberties as afforded individuals (or, at least, individuals should be free to exercise their rights through their corporate and commercial activities with few restrictions).Nudge is pretty good and rather interesting, though. I suspect that were it not for existing popular books offering a seemingly economic view reflecting on our awareness of our non-conscious decisions, I would probably have given the book a more favorable rating. If considering Nudge, I would suggest considering an alternative such as the following. If you are interested primarily in psychology and human error, Dan Ariely's "Predictably Irrational" is pretty good, though imperfect. If you are concerned more about the economics aspect and less about the psychology, consider the Freakonomics series. If you are interested in moral issues related to our decision-making awareness, try Kwame Anthony Appiah's "Experiments in Ethics". That said, Nudge is still worth reading--but the first chapter and the last chapter in this case will probably be enough to get all the good ideas out of this book without redundancy, unless you think you might benefit from Thaler's private financial advice sprinkled throughout the book (hint: you would probably learn something).
Opinionated on LibraryThing 3 months ago
Choice architecture is a sound principal and easy to grasp. Once you have grasped it, which will take most intelligent readers a handful of pages at most, the rest of the book seems a little redundant. In fact the authors seem to struggle for examples outside health insurance and pension planning. But I would have appreciated some discussion of choice architecture in every day life - getting people to make healthier food choices, to drive less dangerously, to exercise more, etc. Nothing to disagree with here (except the rather silly chapter on marriage), but once you have read chapter one, that's pretty much all there is. I am surprised that it made such an impact really
Anonymous More than 1 year ago
A poor attempt at disguising brainwashing for so-called enlightenment. Please don't attempt to think for yourself, you're too weakminded. Let me tell you what's best for you. Not worth any rating!
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