Nudge: Improving Decisions about Health, Wealth, and Happiness

by Richard H. Thaler, Cass R. Sunstein

Overview

Coming soon: Nudge: The Final Edition

From the winner of the Nobel Prize in Economics, Richard H. Thaler, and Cass R. Sunstein: a revelatory look at how we make decisions—for fans of Malcolm Gladwell’s Blink, Charles Duhigg’s The Power of Habit, James Clear’s Atomic Habits, and Daniel Kahneman’s Thinking, Fast and Slow

* More than 1.5 million copies sold
* New York Times bestseller
* Named a Best Book of the Year by The Economist and the Financial Times

Every day we make choices—about what to buy or eat, about financial investments or our children’s health and education, even about the causes we champion or the planet itself. Unfortunately, we often choose poorly. Nudge is about how we make these choices and how we can make better ones. Using dozens of eye-opening examples and drawing on decades of behavioral science research, Nobel Prize winner Richard H. Thaler and Harvard Law School professor Cass R. Sunstein show that no choice is ever presented to us in a neutral way, and that we are all susceptible to biases that can lead us to make bad decisions. But by knowing how people think, we can use sensible “choice architecture” to nudge people toward the best decisions for ourselves, our families, and our society, without restricting our freedom of choice.

Product Details

ISBN-13:	9780143115267
Publisher:	Penguin Publishing Group
Publication date:	02/24/2009
Edition description:	Updated
Pages:	320
Sales rank:	31,848
Product dimensions:	5.40(w) x 8.40(h) x 0.90(d)
Age Range:	18 Years

About the Author

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 Economic Research and in 2015 was the 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, Wiser: Getting Beyond Groupthink to Make Groups Smarter, The World According to Star Wars, and Impeachment: A Citizen's Guide. He is the recipient of the 2018 Holberg Prize, awarded annually to a scholar who has made outstanding contributions to research in the arts, humanities, the social sciences, law, or theology.

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…)

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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.

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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.

Editorial Reviews

One of The Strategist’ s “13 Best Personal Finance Books, According to Money Experts”

“One of the few books . . . that fundamentally changed the way I think about the world.” —Steven D. Levitt, coauthor of Freakonomics

“Engaging and insightful . . . The conceptual argument is powerful, and most of the authors’ suggestions are common sense at its best. . . . For that we should all applaud loudly.” —The New York Times Book Review

“An essential read . . . The book isn’t only humorous, it’s loaded with good ideas that financial-service executives, policy makers, Wall Street mavens, and all savers can use.” —The Boston Globe
 
“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 and Liar’s Poker

“This gem of a book . . . is a must-read for anyone who wants to see both our minds and our society working better. It will improve your decisions and it will make the world a better place.” —Daniel Kahneman, Nobel Prize–winning author of Thinking, Fast and Slow
 
“Utterly brilliant . . . 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
 
“Engaging, informative, and thoroughly delightful.” —Don Norman, author of The Design of Everyday Things and The Design of Future Things

“A wonderful book: more fun than any important book has a right to be—and yet it is truly both.” —Roger Lowenstein, author of When Genius Failed
 
“Save the planet, save yourself. Do-gooders, policymakers, this one’s for you.” —Newsweek
 
“Great fun to read . . . Sunstein and Thaler are very persuasive.” —Slate
 
“Nudge helps us understand our weaknesses, and suggests savvy ways to counter them.” —The New York Observer
 
“Always stimulating . . . An entertaining book that also deeply informs.” —Barron’s
 
“Entertaining, engaging, and well written . . . Highly recommended.” —Choice
 
“This Poor Richard’s Almanack for the 21st century . . . shares both the sagacity and the witty and accessible style of its 18th-century predecessor.” —Law and Politics Book Review
 
“There are superb insights in Nudge.” —Financial Times

From the Publisher

"An essential read . . . an entertaining book. . . . The book isn't only humorous, it's loaded with good ideas that financial-service executives, policy makers, Wall Street mavens, and all savers can use."—John F. Wasik, Boston Globe

Boston Globe - John F. Wasik

"The suggestions in Nudge provide fascinating examples of how tiny changes in context can cue radically different behaviour. Awareness of these cues empowers consumers, voters and decision-makers."—Rebecca Walberg, National Post

National Post - Rebecca Walberg

"Engaging, enlightening."—George Scialabba, Boston Sunday Globe

Boston Sunday Globe - George Scialabba

“How often do you read a book that is both important and amusing, both practical and deep? This gem of a book presents the best idea that has come out of behavioral economics. It is a must-read for anyone who wants to see both our minds and our society working better. It will improve your decisions and it will make the world a better place.”—Daniel Kahneman, Princeton University, Nobel Laureate in Economics

Daniel Kahneman

"A manifesto for using the recent behavioral research to help people, as well as government agencies, companies and charities, make better decisions."—David Leonhardt, The New York Times Magazine

The New York Times Magazine - David Leonhardt

"Richard Thaler and Cass Sunstein's Nudge is a wonderful book: more fun than any important book has a right to be—and yet it is truly both."—Roger Lowenstein, author of When Genius Failed

Roger Lowenstein

"Two University of Chicago professors sketch a new approach to public policy that takes into account the odd realities of human behavior, like the deep and unthinking tendency to conform. Even in areas—like energy consumption—where conformity is irrelevant. Thaler has documented the ways people act illogically."—Barbara Kiviat, Time

Time - Barbara Kiviat

“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 The Blind Side: Evolution of a Game and Liar's Poker

Michael Lewis

“This is an engaging, informative, and thoroughly delightful book. Thaler and Sunstein provide important lessons for structuring social policies so that people still have complete choice over their own actions, but are gently nudged to do what is in their own best interests. Well done.”—Don Norman, Northwestern University, Author of The Design of Everyday Things and The Design of Future Things

Don Norman

"In this utterly brilliant book, Thaler and Sunstein teach us how to steer people toward better health, sounder investments, and cleaner environments without depriving them of their inalienable right to make a mess of things if they want to. The inventor of behavioral economics and one of the nation's best legal minds have produced the manifesto for a revolution in practice and policy. Nudge won't nudge you—it will knock you off your feet."—Daniel Gilbert, professor of psychology, Harvard University, Author of Stumbling on Happiness

Daniel Gilbert

"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. Just as surprising, it is fun to read, drawing on examples as far afield as urinals, 401(k) plans, organ donations, and marriage. Academics aren't supposed to be able to write this well."—Steven Levitt, Alvin Baum Professor of Economics, University of Chicago Graduate School of Business and co-author of Freakonomics: A Rogue Economist Explores the Hidden Side of Everything

Steven Levitt

"An essential read . . . an entertaining book. . . . The book isn't only humorous, it's loaded with good ideas that financial-service executives, policy makers, Wall Street mavens, and all savers can use."—John F. Wasik, Boston Globe

— John F. Wasik

Boston Globe

"The suggestions in Nudge provide fascinating examples of how tiny changes in context can cue radically different behaviour. Awareness of these cues empowers consumers, voters and decision-makers."—Rebecca Walberg, National Post

— Rebecca Walberg

National Post

"Engaging, enlightening."—George Scialabba, Boston Sunday Globe

— George Scialabba

Boston Sunday Globe

"A manifesto for using the recent behavioral research to help people, as well as government agencies, companies and charities, make better decisions."—David Leonhardt, The New York Times Magazine

— David Leonhardt

The New York Times Magazine

"Two University of Chicago professors sketch a new approach to public policy that takes into account the odd realities of human behavior, like the deep and unthinking tendency to conform. Even in areas—like energy consumption—where conformity is irrelevant. Thaler has documented the ways people act illogically."—Barbara Kiviat, Time

— Barbara Kiviat

Time