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generalheff 's review for:
Nudge: Improving Decisions about Health, Wealth, and Happiness
by Richard H. Thaler, Cass R. Sunstein
This book describes how behavioural insight and economics can combine into something the authors call "libertarian paternalism" - meaning a method of structuring choices to improve outcomes for people (the "paternalism" bit) while retaining the right to easily and at low cost opt to do something completely different and possibly much worse (the "libertarian" bit).
The authors excellently show how nudges pervade our lives even where we do not think we are being influenced. Their inaugural example is a menu: experiments have shown that the simple order of a set of main courses influences what children eat. Put pizza and burgers above the healthy options and children will choose those and vice-versa. This is a classic example of "choice architecture" - a brilliant phrase I will now use. It simply means that the framing of choices, their context (social for instance) and the views of others all come together to alter decisions people make. If it is pointed out to people that most have already paid their taxes, tardy individuals are more likely to get on with submitting their returns. In the case of the menu, a bit of libertarian paternalistic nudging is to simply place the healthier items more prominently on the menu: they are not forced to choose healthier meals, but experience suggests this may improve diets overall.
The book starts by introducing the basics of choice architecture and nudging - and then steps through a whole array of such examples, showing how from environmental concerns to health insurance, things like providing more information, setting intelligent default, simplifying choices and understanding how abstract choices map onto concrete outcomes are effective ways of ensuring that outcomes are improved while allowing people to make different choices if they so wish.
The balancing act of freely permitting choice while at the same time nudging people in directions that would likely benefit them (often by choice of defaults or provision of information) seems like a great solution to some seemingly intractable problems.
For example, the authors have an intriguing chapter on privatising marriage as a means of splitting the issue of providing benefits to partnered people ('civil unions') from the far more contentious official labelling of some partnerships with the religious label 'marriage'. The state would offer a contractual union entitled 'civil' unions; the private sector (e.g. churches) could label things marriages or whatever they wished. So much, so libertarian. The nudging aspect comes from thinking about how to frame civil unions in a way that improves outcomes without forcing any particular outcome. The authors discuss a range of topics, one such is the notion of default prenuptial agreements (easy to opt out of if the people wish) that would sign the higher-earner up to certain obligations, or set defaults for joint custody of children (under certain safeguards including that neither guardian is demonstrably negligent).
I could go on with these examples but hopefully this gives enough of a flavour of this book. It brilliantly combines concrete evidence on actual behaviour with attempts to guide people in ways that they would want to be guided (few people want insurance that costs more and offers less) to show how, without banning or regulating anything, outcomes can be improved in a range of fields. Given, as they point out, the often unavoidable nature of people being nudged in some direction or other, this books is surely indispensable reading for anyone required to frame important choices in some way or other.
The authors excellently show how nudges pervade our lives even where we do not think we are being influenced. Their inaugural example is a menu: experiments have shown that the simple order of a set of main courses influences what children eat. Put pizza and burgers above the healthy options and children will choose those and vice-versa. This is a classic example of "choice architecture" - a brilliant phrase I will now use. It simply means that the framing of choices, their context (social for instance) and the views of others all come together to alter decisions people make. If it is pointed out to people that most have already paid their taxes, tardy individuals are more likely to get on with submitting their returns. In the case of the menu, a bit of libertarian paternalistic nudging is to simply place the healthier items more prominently on the menu: they are not forced to choose healthier meals, but experience suggests this may improve diets overall.
The book starts by introducing the basics of choice architecture and nudging - and then steps through a whole array of such examples, showing how from environmental concerns to health insurance, things like providing more information, setting intelligent default, simplifying choices and understanding how abstract choices map onto concrete outcomes are effective ways of ensuring that outcomes are improved while allowing people to make different choices if they so wish.
The balancing act of freely permitting choice while at the same time nudging people in directions that would likely benefit them (often by choice of defaults or provision of information) seems like a great solution to some seemingly intractable problems.
For example, the authors have an intriguing chapter on privatising marriage as a means of splitting the issue of providing benefits to partnered people ('civil unions') from the far more contentious official labelling of some partnerships with the religious label 'marriage'. The state would offer a contractual union entitled 'civil' unions; the private sector (e.g. churches) could label things marriages or whatever they wished. So much, so libertarian. The nudging aspect comes from thinking about how to frame civil unions in a way that improves outcomes without forcing any particular outcome. The authors discuss a range of topics, one such is the notion of default prenuptial agreements (easy to opt out of if the people wish) that would sign the higher-earner up to certain obligations, or set defaults for joint custody of children (under certain safeguards including that neither guardian is demonstrably negligent).
I could go on with these examples but hopefully this gives enough of a flavour of this book. It brilliantly combines concrete evidence on actual behaviour with attempts to guide people in ways that they would want to be guided (few people want insurance that costs more and offers less) to show how, without banning or regulating anything, outcomes can be improved in a range of fields. Given, as they point out, the often unavoidable nature of people being nudged in some direction or other, this books is surely indispensable reading for anyone required to frame important choices in some way or other.