Nudge: Improving Decisions about Health, Wealth, and Happiness is a book written
by University of Chicago economist Richard H. Thaler and Harvard Law School
Professor Cass R. Sunstein. The book draws on research in psychology
and behavioral economics to defend libertarian paternalism and active
engineering of choice architecture. The book received largely positive
reviews. The Guardian described it as "never intimidating, always amusing and
elucidating: a jolly economic romp but with serious lessons within." It was
named one of the best books of 2008 by The Economist.
Summary = Human behavior =
One of the main justifications for Thaler's and Sunstein's endorsement of
libertarian paternalism in Nudge draws on facts of human nature and psychology.
The book is critical of the homo economicus view of human beings "that
each of us thinks and chooses unfailingly well, and thus fits within
the textbook picture of human beings offered by economists."
They cite many examples of research which raise "serious questions about the
rationality of many judgments and decisions that people make". They state
that, unlike members of homo economicus, members of the species homo sapiens make
predictable mistakes because of their use of heuristics, fallacies, and
because of the way they are influenced by their social interactions.
Two systems of thinking The book describes two systems that
characterize human thinking, which Sunstein and Thaler refer to as the
"Reflective System" and the "Automatic System". These two systems are more
thoroughly defined in Daniel Kahneman's book Thinking, Fast and Slow.
The Automatic System is "rapid and is or feels instinctive, and it does not
involve what we usually associate with the word thinking". Instances of the
Automatic System at work include smiling upon seeing a puppy, getting nervous
while experiencing air turbulence, and ducking when a ball is thrown at you.
The Reflective System is deliberate and self-conscious. It is the one at work
when people decide which college to attend, where to go on trips, and
whether or not to get married. Fallacies and biases
Because of these differences and conflicts between these systems, people
are often subject to making mistakes that are the result of widely occurring
biases, heuristics, and fallacies. These include:
= Soft paternalism = Soft paternalism is the union of two
political notions that are commonly viewed as being at odds: libertarianism
and paternalism. Sunstein and Thaler state that "the
libertarian aspect of our strategies lies in the straightforward insistence
that, in general, people should be free to do what they like-and to opt out of
undesirable arrangements if they want to do so". The paternalistic portion of the
term "lies in the claim that it is legitimate for choice architects to try
to influence people's behavior in order to make their lives longer, healthier,
and better". Choice architecture describes the way in
which decisions are influenced by how the choices are presented. It is in
arranging the choice architecture in a certain way that individuals can be
nudged in a certain way without taking away their freedom of choice. A simple
example of a nudge would be placing healthy foods in a school cafeteria at
eye level, while putting less healthy junk food in harder to reach places.
Individuals are not prevented from eating whatever they want, but the
arranging of the food choices in that way has the effect of decreasing
consumption of junk food and increasing consumption of healthier foods.
= Policy recommendations = Sunstein and Thaler use their notions of
nudges within the context of choice architecture to propose policy
recommendations that they believe are in the spirit of libertarian paternalism.
They have recommendations in the areas of finance, health, the environment,
schools, and marriage. They believe these problems can at least be partially
addressed by improving the choice architecture.
Retirement saving Thaler and Sunstein point out that many
Americans are not saving enough for retirement. They state that "in 2005 the
personal savings rate for Americans was negative for the first time since 1932
and 1933 – the Great Depression years". One change they offer is creating better
default plans for employees. Employees would be able to adopt any plan they
like, but, if no action is taken, they would automatically be enrolled in an
expertly designed program [such as social security]. They also propose what
they refer to as the "Save More Tomorrow" plan. This is to address the
issue of people having the desire to save more, yet procrastinating on
actually doing so. This program would invite "participants to commit
themselves, in advance, to a series of contribution increases timed to coincide
with pay raises". Health care
The book contains an analysis of the Bush administration program Medicare
Part D. Thaler and Sunstein state that "on some dimensions Bush was on the
right track" with the plan, but that, "as a piece of choice architecture...it
suffered from a cumbersome design that impeded good decision making".
Specifically, they think that default choices for programs should not have
been random, and that beneficiaries of the program were not given adequate
resources to deal with the number of choices they were faced with. They think
that seniors who did not sign up for a program should have one assigned to
them, and that, yearly, they should be mailed an itemized list of all drugs
they had used and all of the fees they incurred. This information would be
freely available online, where beneficiaries could easily compare their
programs with other similar ones. Sunstein and Thaler also propose a way
to increase organ donation rates in the United States. They argue that a
mandated choice program should be put in place, where, in order for someone to
renew their drivers license, they must say whether or not they would like to be
an organ donor. They also advocate the creation of websites which would suggest
that the wider community supports organ donation in order to nudge people into
becoming organ donors themselves. Reception
George Will, in a review for Newsweek magazine, stated that "nudges have the
additional virtue of annoying those busybody, nanny-state liberals who, as
the saying goes, do not care what people do as long as it is compulsory".
British journalist Bryan Appleyard, in a review for The Times, was critical of
the book, describing it as a "very, very dull read, a dogged march through social
policies with boring lists of what nudges should be imposed and how" and
that "what the book needs is not more examples but more elaboration of the
central idea". Christopher Shea, for The Washington
Post wrote that "In the end, it must be said, the profusion of proposals in
Nudge, however worthy, and the countless summaries of studies supporting them
grow a bit wearisome. As influential as the book is likely to be, it's hard to
imagine it pushing its way alongside Malcolm Gladwell's Blink on the
bestseller list". Elizabeth Kolbert writing for The New
Yorker held reservations about some of the book's conclusions when she wrote
that many of the suggestions in Nudge seem
like good ideas, and even, as with “Save More Tomorrow,” practical ones. The
whole project, though, as Thaler and Sunstein acknowledge, raises some pretty
awkward questions. If the “nudgee” can’t be depended on to recognize his own best
interests, why stop at a nudge? Why not offer a “push,” or perhaps even a
“shove”? And if people can’t be trusted to make the right choices for themselves
how can they possibly be trusted to make the right decisions for the rest of us?
In July 2011, a subgroup of the UK House of Lords Science and Technology
Committee concluded a year-long review of behavioral change based on 148
written submissions and evidence from 70 witnesses. The review was led by
Baroness Neuberger. In an interview with The Guardian newspaper, Baroness
Neuberger reports finding “precious little” evidence for effective impact of
Nudge: You need more than just nudge ...
Behavioural change interventions appear to work best when they're part of a
package of regulation and fiscal measures ... all politicians love quick
fixes ... one of the problems with all of this is if you really want to change
people's behaviour it takes a very long time ... you have to look at a 20- to
25-year span before you get a full change of behaviour.
American law professor, Pierre Schlag, notes that for all their attention to
framing issues, Sunstein and Thaler neglect a number of important questions:
"(1) What to optimize? When is a nudge a shove? Should we prefer experts? and
When do we nudge?" ^ Sunstein and Thaler, p. 3-7.
^ "Lured Toward the Right Choice", Time.com Retrieved December 6, 2009
^ "Nudge The Gentle Power of Choice Architecture" - Capital Ideas Retrieved
December 6, 2009 ^ "Why a nudge from the state beats a
slap" - The Observer Retrieved December 6, 2009
^ Jean Hannah Edelstein. "Review: Nudge: Improving Decisions by Richard H Thaler
and Cass R Sunstein". the Guardian. ^ [1] "Pick of the pile" The Economist.
Retrieved 21 September 2014 ^ Sunstein and Thaler, p. 6.
^ Sunstein and Thaler, p. 7. ^ a b Sunstein and Thaler, p. 19.
^ Sunstein and Thaler, p. 20. ^ Sunstein and Thaler, p. 25-26.
^ Sunstein and Thaler, p. 30. ^ Sunstein and Thaler, p. 35.
^ a b Sunstein and Thaler, p. 5. ^ Sunstein and Thaler, p. 1.
^ Sunstein and Thaler, p. 105. ^ Sunstein and Thaler, p. 115.
^ Sunstein and Thaler, p. 162. ^ Sunstein and Thaler, p. 175.
^ Sunstein and Thaler, p. 182-83. ^ "Nudge Against the Fudge" -
Newsweek.com Retrieved December 6, 2009 ^ "Nudge: The Sunday Times review by
Bryan Appleyard" – Times Online Retrieved December 6, 2009
^ "Who's in Control Here?" - The Washington Post Retrieved December 6,
2009 ^ "WHAT WAS I THINKING?" The New Yorker
Retrieved December 6, 2009 ^ Julia Neuberger: "A nudge in the right
direction won't run the big society" The Guardian Retrieved July 17, 2011
^ Schlag, Pierre. "Nudge, Choice Architecture, and Libertarian
Paternalism". Rochester, NY. See also
Behavioural Insights Team Notes
References Thaler, Richard H.; Sunstein, Cass R..
Nudge: Improving Decisions about Health, Wealth, and Happiness. Yale University
Press. ISBN 978-0-14-311526-7. OCLC 791403664.
External links Official Nudge blog
Nudge at Yale University Press Cass Sunstein on bloggingheads.tv
Interview with Richard Thaler about libertarian paternalism - EconTalk
podcast Interview with Cass Sunstein about
libertarian paternalism - Grist.com Interview with Richard Thaler
Nudge Theory as a driver in HSE toolbox