67 of 73 people found the following review helpful:
engaging and thought-provoking
Everyone seems to be talking about this book, and the Tories like it a lot (which may not necessarily be a good sign). The book shows how people often behave in irrational ways and offers some gentle 'nudging' techniques for making them behave more responsibly and sensibly. There are some very entertaining illustrations and examples - I love the story about the urinals at...
25 of 28 people found the following review helpful:
Interesting and opinionated but with some serious flaws
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)...
Everyone seems to be talking about this book, and the Tories like it a lot (which may not necessarily be a good sign). The book shows how people often behave in irrational ways and offers some gentle 'nudging' techniques for making them behave more responsibly and sensibly. There are some very entertaining illustrations and examples - I love the story about the urinals at the airport (but I won't go into any more detail here or else I'll spoil it for you.) Sometimes, however, the strategies seem to be a little less subtle than the authors suggest - for example, the idea that there should be a waiting period before people get married. Surely that's a little too much interference? Nevertheless, the book is an excellent and stimulating - and optimistic - read.
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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.
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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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The book demonstrates through a series of examples how nudges could influence your decisions on a series of varied subjects: driving, credit cards, organ donations, choice of school, marriage,... Many of those topics are well developed and explained. The style is pleasant and easy to read.
The authors define two keys notions: libertarian paternalism and the opposition between Econs and Humans. Libertarian paternalism covers the ideas that private and public institutions may affect behaviours while also respecting freedom of choice. The default option will be a form of paternalism while the choice will be the libertarian part. Econs are people who "think like Albert Einstein, store as much memory as IBM's Big Blue, and exercise the willpower of Mahatma Gandhi" and Humans are homo sapiens, so simply, every humans on earth.
If you recognise yourself as an Econ, you will probably not learn much from this book. If you think you are a human, the book may draw your attention to good examples of marketing tricks. However, the book is based on examples from the United States and while some are relevant to many nations, some are clearly specific to the authors' country and therefore uninteresting or boring for a non-American reader.
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Though there is little in this book that is completely new, it draws together many of the key current ideas on how people make decisions. In particular it shows that people may make very different decisions depending on how information about the decision is presented.
It is illustrated throughout with excellent examples, which brings the book to life.
There is material in this book that I will apply directly in the work that I do in the pensions field. However it is useful in any field where people have difficult decisions to make that may have a huge impact on their life (for example what medical treatment to have, how to invest life savings, what mortgage to take out).
Its key overall theme is that there is no neutral way to present information. We should strive to present it in a way that leads people to make what we believe is the decision that is in their best interest. Paternalism, but with freedom of choice.
This is an excellent book and well worth reading.
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This book has been heavily promoted in a certain large book chain that rhymes with 'Dorders' and had one of those little signs saying that the staff recommend it. There are a few good stories in here and some of the ideas are quite clever.
The book claims to explain how people can be influenced into making decisions almost without their awareness of it. The end result, however, was a little lacking in structure. I didn't feel that the ideas were put together in a way that made sense. Plus I have to admit that the book did feel a little like hard work quite a lot of the time - this felt like a book that was 'good for me' as opposed to a book that I wanted to read.
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This book is not only on David Cameron's reading list, but also on President Obama's. Therefore its appeal obviously goes beyond the audience of political arrivistes who will clutch at any straw in order to get elected to genuine statesmen who are likely to make a difference to our world and our lives in years to come.
First off, either the story about the urinals at Schipol is derivative or apocryphal. Urinals used to depict a bee (a Victorian pun - the Latin for bee is apis - geddit?) long before there were airports, but it may be for the same reason.
Yes, the book is American in the sense that many of the examples given are specifically from the US - 401ks, IRAs, health care plans and so on - but it shouldn't take too much imagination or application to realise that these are directly relevant to, for example, defined contribution pension plans in the UK, to private health care plan, but more importantly and more widely, to any choice we make that involves electing (or not electing, equally to the point) for a one of a range of options that may be available.
For instance, if you have failed to change your bank, your electricity or gas supplier and any other provider even though you know there are better (for example cheaper) alternatives available, then this book will tell you why, and therefore may encourage you to do something about it (although I wouldn't bet on that last bit).
Well worth a read if you want to see what methods policymakers will be trying to influence your behaviour with in the future, or if you want to understand how modern marketing works.
The downsides? Well, it is a bit repetitive - the theory is comparatively simple, so to fill a whole book there are a lot of empirical and practical examples, but that does serve to reinforce the background. And it's not exactly rocket science. But it is well-written and well-presented.
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i thought this book would be very interesting and useful, it started off with such promise but then just went on about success stories and case studies and how they have worked, i wanted some practical advice on how i could change aspects of my life and improve decisions about money, life etc. so i was dissapointed overall, could have been so much better, my advice, just rent it from the library, not a book i would read again or recommend. just fell short of what it should have been.
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In this lovely, useful book, Richard Thaler and Cass Sunstein examine choices, biases and the limits of human reasoning from a variety of perspectives. They often amuse by disclosing how they have fallen victim to the limitations of thought that they are describing. The fact that these educated, articulate professionals can fool themselves so often demonstrates how tough it is to think clearly, a point the authors emphasize and even repeat. Humans fall prey to systematic errors of judgment, but you can harness this problematic tendency productively, including by helping others make better decisions. Some of the authors' suggestions may not be practical, but many are and all are interesting. getAbstract recommends this book to anyone who wants to know how to shape responsible decisions.
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Well, never judge the book by the cover. Here it claims being downright amazing ;) It's OK and describes choice architecting - i.e. how to structure choices in a way so as to achieve a better societal result. For someone completely new to choice research the book might be a good first step (although the plentiful work by people like Kahnemann & Tversky is probably a faster and more comprehensive option).
I'd give it another star, if the authors would not fall prey to extreme carelessness and commit horrible cases of innumeracy on several occasions. They are supposed to be university professors and one of them in a relatively quantitative field (economics). So claiming that 60 or 70% of drivers cannot be better than average is not really helping their points. And while they often provide some salient evidence supporting their points, they occasionally do not and I was constantly left wondering, whether those are instances, where there is none, or all is stacked against the points they are trying to make.
Fine as entertainment, though :)
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