Nudge: Improving Decisions About Health, Wealth and Happiness [Paperback]

 

 

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I can't help thinking that the authors could very easily written the book in less than 5 pages. Much of it is little more than a collage of work which you can find in the likes of 'The Tipping Point' by Malcolm Gladwell (namely, the story about the Yale students who were more likely to go get vaccinated against tetanus if the brochure showed the map to the medical office) and 'Undercover Economist' and 'The Logic of Life' by Tim Harford (since most of both books rave about free markets and response to incentives) as well as many others of that 'genre'.

No new concepts are introduced in this work - okay, I hadn't heard about 'libertarian paternalism' but even that is only a new name for a very old concept - think about Milton Friedman and you're not far - and 'choice architect' is nothing but a fancy name for what designers do since forever - be it store designers, systems analysts or commercial managers.

You don't believe me? Well, here's a list of topics from the book. See if they really sound new to you:
1. Arrangement of items in a cafeteria (read: any restaurant or shop) influences the choices made by customers. Doesn't explain how, though it's perfectly obvious that it does.
2. Although 'pure' free market followers believe that perfect information will be used by people to make perfect choices, many people just can't or won't. The authors call these people 'Humans' and 'Econs' to those people who make perfect decisions.
3. Biases such as anchoring, availability, representativeness, status quo, framing (think about lawyers) and the feeling of loss being higher than if you win something.
4. Clocky is a vicious little wake-up clocks that runs around your bedroom until you get up and shut it down. This was an internet meme a long time before this book came along.
5. We are influenced by what other people around us do or think about us. I always thought this was called 'peer pressure' and see no reason to rehash it into this book as though it's something new.
6. The fact that we make terrible decisions in large part because the costs of that decision are far into the future - medical insurance, pensions, mutual funds - or because they occur very infrequently - such as buying a house or choosing your university degree.
7. If you are designing something that a lot of people will use and you want to ensure enrollment by as many people as possible just set sensible defaults and make it easy for people to change if they need to.
8. Expect mistakes by people, who are Humans, not Econs, and design whatever you need to design having in mind these mistakes. It's called usability but the authors didn't mention it. Do they ignore the existence of the concept?

I could go on, but I think you get the picture. If you're new to that genre of books that seem to cover everything under the sun (Business/Economics/Politics/Sociology/Psychology), then Nudge is all very interesting. But if, like me, you already follow the genre, you will find very little here. I suggest you borrow it from a friend, and skim it.

Whilst I found this to be an interesting and thought provoking book, I found the implementation of it on kindle to be most unsatisfactory. The key issue is that all the important foot notes have been placed at the end of the book, completely out of context. There is no way to find out where in the text the foot notes belong. Most readers will only find these important footnotes after reading the whole book - and will then doubtless feel as frustrated as I did. The Index is also worse than useless, as the kindle edition (at least at the time I read it) does not preserve page numbers. This mangling seems to be typical of kindle books. I am increasingly looking to source PDF versions of books which preserve the text and layout as the author intended.

Whilst I don't know if this book is quite as significant as is being made out, it's a nice and straightforward primer on behavioural economics and some of its applications.

The first section sets the scene for why nudges - policy interventions that encourage rather than mandate certain types of behaviour - may be necessary. So it builds up the argument for why we aren't the rational self-maximizers that economics has tended to assume we are. This section includes a useful run-through of some of the key heuristics and biases that have been identified and what kind of outcomes they result in. This does provide a pretty good overview of some of the major factors like anchoring, availability, representativeness, loss aversion and so on. It also stresses the importance of the design of choice, or choice architecture, and that in many cases there is no option to be 'neutral' - some kind of structure of choices has to be offered.

The second section is about financial issues, so much of this is familiar ground if you know much about recent pension reform. Still the points are worth reiterating. If you auto-enrol people into a pension most tend not to opt-out. Whereas if you don't auto-enrol many don't join. This, combined with what non-savers say themselves, suggests that non-savers aren't making a rational choice not to save. People also adopt naive diversificaton strategies - the equity content of their asset allocation (if they have made an active choice) will be heavily influenced by the allocations of the funds on offer (and what stocks are popular at the time) and what's more people don't tend to shift their initial allocation. Also it seems pretty clear less in more in fund choices - too many options puts us off choosing.

The section on health has a bit of a US focus, but there is interesting stuff in there. The example of the Part D prescription drugs system is useful if only to demonstrate why a random choice for non-choosers is a bad idea. Also the section on organ donations is worth a read - I think I still favour the assumed consent approach, but the idea of mandatory choice (ie having to state your position on your driving liscence) is at least worth thinking about. Also in this section are some fairly interesting suggestions for nudging people to reduce energy consumption. These are definitely worth a look since they involve, for example, being able to make peer group comparisons. I think this would work on two levels - firstly simple self-interest, wouldn't you be annoyed to know you are spending more on energy than comparable households? Secondly I think it would give people smug points for being more energy efficient.

The fourth section I probably found the least interesting, as it deals with ideas I'm not that impressed by, such as school vouchers. Having said that the idea of privatising marriage is intriguing, if unlikely to happen. Basically they argue that the state should restrict itself to civil partnerships and the legal rights that flow from them, but that 'marriages' could be arranged by other groups. That way churches could choose whether or not they want to carry out same-sex marriages. Equally other organisations could carry them out anyway. That way, the authors argue, no-one's values get compromised but neither are anyone's rights denied.

The final section sketches out some further ideas for nudges, as well as combatting some of the counter arguments that have been put forward. This latter chapter is well worth a read as the authors do a pretty good job at arguing back at some of the half-decent arguments there are out there that challenge them. Some good pro-nudge points here include the one I've already mentioned that often there isn't a neutral option - so the absence of a nudge is a kind of nudge itself. Also it is important that nudges are made explicit, so there is no sense that Government (or whoever else is doing the nudging) is being underhand.

Thaler and Sunstein argue that their approach offers a real 'third way' since it seeks an alternative to both state mandated paths on the one hand and complete laissez-faire on the other. This they call Libertarian Paternalism. That's obviously an Americanism, since in the UK libertarianism of any stripe is not a strong theme in our political culture. As such I don't expect the label to catch on here. However overall the book does provide quite a few ideas for how we could achieve some beneficial behavioural changes without being too heavy-handed. And if you want to get into behavioural economics this probably isn't a bad place to start.

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2.0 out of 5 stars Big Brother is Nudging You!
Yes, that's right, Big Brother is nudging you. But nicely, oh so nicely. Which makes it alright then, doesn't it?

Actually no, no it doesn't. Read more

Published 3 months ago by Allen Baird

3.0 out of 5 stars take a nudge
brilliant concept, but too common sensical and long winded. the book could have been considerably condensed. Read more

Published 4 months ago by asp

4.0 out of 5 stars Good but not great
This book has one central insight which is broadly applicable (some would say applied already) in many aspects of public policy, namely that default settings matter and consumers... Read more

Published 5 months ago by James Samworth

5.0 out of 5 stars Nudge
Really good, interesting book, very topical at the moment with the Government using it- so interesting to see the clever ways to change the nation.

Published 10 months ago by Mez

5.0 out of 5 stars Ideas that stay with you
A captivating read. The basic approach is:

Choice is better than compulsion
We kid ourselves we are rational but actually we're mostly too busy to evaluate... Read more

Published 10 months ago by huskies

5.0 out of 5 stars THE NUDGE
Great book , very thought provoking
Supllied in great time , amazingly quick.
Great condition.
Excellent service.

Published 10 months ago by B. Rawlinson

4.0 out of 5 stars Influential Book

Nothing new I thought at the beginning. But it is new. It became apparent, not from reading the book, but from the radio and television which kept referring to "Nudging"... Read more

Published 11 months ago by M. Hillmann

3.0 out of 5 stars Over hyped?
Whilst I enjoyed this book, I couldn't help but compare it to the likes of The tipping Point. Unfortunately this makes for an unfavourable comparison for Nudge. Read more

Published 15 months ago by E. H. Aidoo

1.0 out of 5 stars Ideologically questionable
The book opens with the concept of 'Libertarian Paternalism', as an ethical guideline for the use of Nudge theory to 'improve' peoples choices. Read more

Published 15 months ago by A. Paradise

3.0 out of 5 stars Treatment a bit dull but subject matter fascinating
Like "Predictably Irrational" by Dan Ariely (which I read first), this is a work essentially about behavioural economics from an American academic stable - Thaler is a Professor... Read more

Published 15 months ago by R. Darlington

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