8 of 9 people found the following review helpful
4.0 out of 5 stars Improving decisions? Or manipulating decisions? Let the reader decide.
An interesting work. . . . It speaks of how conditions can be changed and perhaps improved by "nudging" people. Rather than "beating up" on people, subtly nudge them. Fascinating reading and very provocative. Is nudging good? Or manipulative?
The authors, Richard Thaler and Cass Sunstein, faculty at the University of Chicago, define a "nudge" as (Page 6): "...
Published on January 9, 2011 by Steven A. Peterson
69 of 74 people found the following review helpful
3.0 out of 5 stars Homo Economicus Gives Way to Homo Irrationalus
The good part of this book is that it contains a lot of practical and nonpartisan policy advice, such as requiring corporations to sign people up for the 401(k) by default and then letting them opt out. This is an example of what they mean by "nudge". You don't need to coerce people; since something has to be the default option you can at least give them intelligent...
Published on October 27, 2009 by Hagios
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69 of 74 people found the following review helpful
3.0 out of 5 stars Homo Economicus Gives Way to Homo Irrationalus,
This review is from: Nudge: Improving Decisions About Health, Wealth, and Happiness (Paperback)The good part of this book is that it contains a lot of practical and nonpartisan policy advice, such as requiring corporations to sign people up for the 401(k) by default and then letting them opt out. This is an example of what they mean by "nudge". You don't need to coerce people; since something has to be the default option you can at least give them intelligent defaults.
The bad side of the book is its poor understanding of human nature. Libertarian economists such as Gary Becker have been aggressively promoting free markets based on a mathematical vision of rational decision making. Needless to say, this vision could only apply to ultra-logical people like Mr. Spock - the notorious Homo economicus. The breakthroughs of behavioral economics teach us that real people do not act like Mr. Spock. This book does an excellent job explaining the major findings of behavioral economics. But rather than try to understand the richness of real human behavior, most behavioral economists tilt towards the opposite extreme. They pronounce humans as irrational and filled with hidden biases. Homo economicus has been replaced by Homo irrationalus.
That's unfortunate because the real story of human nature is far more interesting. Consider the case of loss aversion (pp 33-34). In a classic experiment which has been replicated hundreds of times, students were randomly given free coffee mugs. The mug-less students were asked how much they would pay to get a mug and the students with mugs were asked how much they would want in order to sell their mugs. It turns out that students with mugs wanted an average of about twice as much as the mug-less students were willing to pay! This goes by the name of loss aversion, the endowment effect, and the status quo bias. It is labeled a bias because a self-respecting member of Homo economicus would think about how often he drinks coffee, how often he does the dishes, and how many mugs he currently has. Based on this analysis he would put a price on a new coffee mug. That price would not influence by whether or not he just got a mug for free. But in fact this behavior is rational. Richard Thaler and Cass Sunstein conclude that "loss aversion operates as a kind of cognitive nudge, pressing us not to make changes, even when changes are very much in our interests." (p.34)
The method behind our seemingly irrational madness is found in a classic problem in game theory - the game of hawks and doves. Hawk and dove are different strategies people can use when they are in a conflict over a prize. The prize could be anything. For butterflies it could be a sunlit leaf because male butterflies have more mating success when they occupy such a position. For feral horses it could be a pool of water (Herb Gintis reviews the literature in _The Bounds of Reason_). Doves are sharers. When two doves see a prize they will share it. When two hawks see a prize they will fight over it. When a hawk meets a dove the dove will yield the prize to the hawk. A world of all doves is basically a communist utopia where everyone shares everything. It is also efficient because people maximize the use of available resources (prizes). The problem is that it is not what biologists and game theorists call an evolutionary stable strategy. It can easily be invaded by hawks. The first person to switch to the hawk strategy will get the entire prize without cost wherever he goes. Over time more and more and people will play hawk. That's inefficient because the cost of fighting must be subtracted from the value of the prize.
We have a problem. A world with doves is efficient but unstable. A world with hawks is inefficient but stable. The evolutionary biologist John Maynard Smith found the answer - the bourgeois strategy. That means "play hawk when you own the prize and dove when someone else does." A world of bourgeoisie is efficient because it eliminates fighting as effectively as the dove strategy. It is also an evolutionary stable strategy that cannot be invaded by hawks. That's because hawks are basically parasites on doves - they need the free prizes to offset the cost of fighting. A necessary consequence of adopting the bourgeois strategy is that people will value prizes that they own more than prizes that other people own. That's the real reason for loss aversion. It is not a "bias" but an efficient and stable strategy that provides the strategic foundation for the rule of law. The cost of enforcing the law goes up with the number of people who are trying to break it. If people did not have a sense of loss aversion then there would be more useful trades - but there would also be conflict and fighting over prizes.
That is just one example and this is already a long review but these kinds of lessons underlie nearly all of the so-called "biases" that Thaler and Sunstein identify. If you want to learn about Homo economicus then pick up _The Economics of Life_ by Gary Becker. If you want to about Homo irrationalus then buy this book. But if you want to learn about Homo sapiens then you will need to look elsewhere. I recommend starting with Gut Feelings: The Intelligence of the Unconscious_ by Gerd Gigerenzer. It is the book that _Blink_ by Malcolm Gladwell should have been. Books that talk discuss the hawk-dove game and other fascinating results out of evolutionary game theory are pretty scholarly. Games in Economic Development only requires high school algebra and you can easily skip over the math. I also think that most people interested in this book would enjoy Filthy Lucre: Economics for People Who Hate Capitalism. It is an accessible but sophisticated look at modern economics, including some behavioral economics.
135 of 163 people found the following review helpful
3.0 out of 5 stars Interesting premise, poor implementation,
This review is from: Nudge: Improving Decisions About Health, Wealth, and Happiness (Paperback)I liked the beginning of the book, but it became repetitive and boring after first three chapters. It could be due to the fact that I generally agree with the major premise of the book: people should be "nudged" to make a decision that will make them better off. And yes, the nudge should be transparent and not synonym to manipulating people's minds. And yes, the government has my permission to nudge me in the right direction; if as a result I will make a decision (for example) to exercise more and eat less junk food.
(As a side note, I will be happy to have such a smart government. Or well, this could be an issue. But this is a subject for another book).
I got it, and I don't need three chapters to convince me. Am I alone in this?
I was much more interested in why and how our brain works to react to the "nudges" ("popular psychology" side that was almost non-existent), than in authors' rebukes to the opponents of "libertarian paternalism" - the political implementation of their theory. The other thing that annoyed me was the authors' attempt to be funny and coin terms, names and definitions that were supposed to make the book readable. Instead, it got annoying after the third appearance of the term "libertarian paternalism" and after the fifth time I saw the term "Econ" (used for infamously rational person from economics textbooks).
I had an opportunity to listen to Thaler's presentation on this subject and it was lively and interesting. He is a brilliant speaker with many great ideas; unfortunately, it didn't translate into the brilliant writing.
I would still recommend the book for the ideas of "nudges" in different areas (personal finance, energy conservation, marketing, politics and everyday life). However, it fells short on the inspirational side. You shouldn't be able to put this book down. But you are.
56 of 68 people found the following review helpful
1.0 out of 5 stars Anecdote heavy & talks down to audience,
This review is from: Nudge: Improving Decisions About Health, Wealth, and Happiness (Paperback)Nudge mistakenly attempts to make it's simple ideas even simpler so that a popular audience can easily understand them. Unfortunately, Thaler and Sunstein set the bar way too low, and the book is annoyingly dumbed-down. Most educated people know what an externality is: you don't need to put it in quotes. Also, the endless cheekiness and attempts at humor are out of place rather than charming. One would hope that the director of the Office of Information and Regulatory Policy would write a more serious book on his theory of governmental nudging. To the authors: please challenge us with something that we (a diligent audience who wants to know what you really think) can work to understand.
Moreover, the book is structured around different contexts in which the idea of "nudging" can be applied (enviro policy, health policy, financial regulation). This easily turns into an endless stream of "nifty" anecdotes. How about organizing the book on the gradual development and exposition of the concept of governmental "nudging" and its problematics? Keynes sold hard books to a large audience, so did Schlumpeter, so did Darwin. Have people really gotten less intelligent in the last 50 years? I don't think so, but this book makes me think that these academics think so.
12 of 14 people found the following review helpful
3.0 out of 5 stars A nudge in the other direction,
This review is from: Nudge: Improving Decisions About Health, Wealth, and Happiness (Paperback)I bought this book because of all the great blurbs all over the cover quoted from publications that I respect. And frankly, after reading the book I am a bit disappointed. It doesn't take long to understand the concept of choice architecture. And then the book begins to feel repetitive. The books ends up being "okay," and I wouldn't really recommend it.
8 of 9 people found the following review helpful
4.0 out of 5 stars Improving decisions? Or manipulating decisions? Let the reader decide.,
This review is from: Nudge: Improving Decisions About Health, Wealth, and Happiness (Paperback)An interesting work. . . . It speaks of how conditions can be changed and perhaps improved by "nudging" people. Rather than "beating up" on people, subtly nudge them. Fascinating reading and very provocative. Is nudging good? Or manipulative?
The authors, Richard Thaler and Cass Sunstein, faculty at the University of Chicago, define a "nudge" as (Page 6): ". . .any aspect of the choice architecture that alters people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives." Indeed, they define their perspective as "libertarian paternalism." They believe in freedom but also wish to use "nudges" to induce people to improve their health, and live longer and happier.
One simple example? Has any male ever used a urinal with a fly painted onto it? This simple nudge reduces "spillage" by 40% as males involuntarily try to hit the "target." In the process, there is a benefit, less smelliness and messiness in the restroom.
The book applies the nudge argument to investments, health, school choice, organ donation, the environment, marriage, and so on. In each case, they try to show how nudges and libertarian paternalism can improve the quality of life of individuals as well as providing social benefits.
Questions do arise, as the authors themselves admit. Is this a manipulative approach? Do we subtly manipulate people into doing things that they might not voluntarily wish to do? Thaler and Sunstein address these issues. Each reader will have to determine how well they succeed. A provocative and fascinating work, well worth reading.
37 of 49 people found the following review helpful
1.0 out of 5 stars A Case for Elitist Manipulation and Exploitation,
This review is from: Nudge: Improving Decisions About Health, Wealth, and Happiness (Paperback)This book is an unequivocal "dummies' guide" to how current power structures use unconscious manipulation for various forms of social control. Though many of the examples provided to articulate the book's fundamental ideas seem trivial and benign, one mustn't put forth much effort to extrapolate how the widespread apathy, misinformation, and malleability needed in order to 'Nudge' citizens toward more 'automated' decisions or outcomes presupposes a highly complacent and disengaged population. Moreover, the authors not only seem contented with fostering the easily exploitable human characteristics which lead to automated decision making, but have the gall to say that it is in our (we, the general, non-elite, decision-ratifying populace) best interest. So long as the real decision making 'Econs' - i.e. the social, political, economic, and academic elite - are the ones nudging us plebeians towards choices deemed acceptable for us, all is well, calm, and as it should be.
There is, of course, an alternative narrative that can be constructed, namely one that portrays our tendency towards unreflective (re)actions and hierarchical subjugation as categorically negative; one that does not perceive a condescending analysis of how humans (besides the authors and their peers presumably) make decisions as quaint or endearing. The only problem with this narrative is that it doesn't coincide with the current power structures that Sunstein and Thaler are apart of, and wont serve to profit the advertising and PR industries billions of dollars a years.
Worth reading if you're unfamiliar with why current sociopolitical/economic trends are steamrolling forward with little to no resistance. If that is something you're already educated on and are not interested in its perpetuation, then I can comfortably suggest you apply your time, money, and, most importantly, intellect elsewhere.
12 of 15 people found the following review helpful
3.0 out of 5 stars Disappointing and political,
This review is from: Nudge: Improving Decisions About Health, Wealth, and Happiness (Paperback)As an economist, Nudge was a book that I desperately wanted to like. Unfortunately, I was disappointed. Perhaps my low rating of the book stems from my high expectations of a book co-authored by the well-regarded behavioral economist Richard Thaler. Without such expectations, my rating might have been higher. But at the same time, without such expectations, I might not have bothered to read the book at all.
The only interesting part of the book is the first part, which consists of the first five chapters. Here, the authors lay out the main premise of the book. The decisions humans make are affected by "nudges." Since nudges are not easy to define, they are best explained through examples. The clearest example of a nudge is a default. When you register online at a site, you are often asked, "Would you like to receive future emails?" By default this box could be either checked or not checked. The default matters; that is, different results emerge under different defaults. The main point of the book is that nudges matter and thus should be carefully designed.
The rest of the book presents a laundry list of policies to which we should apply this principle. For me, this got boring fast. For some reason, the authors seem to be obsessed with identifying every possible nudge and offering their nudge design suggestions. The end of the paperback version of the book became really ridiculous - a bonus chapter of twenty more nudges. I think that the hardcover version is saved from this madness, because the bonus chapter was added after the publication of the hardcover version.
Many may find Nudge overly political. The authors weigh in on what they believe to be good nudges on a large number of hot political issues such as Medicare and same-sex marriage. I personally didn't mind their political stances as much as I minded the lack of economics.
The book is also poorly written. I felt that the publishers gave the authors complete free reign since the authors were well-regarded academics, and obviously academics don't need editors. One problem with the writing was the lack of a targeted audience. The book is supposed to be targeted towards a mass audience; or at least, that is the target of the book's marketing efforts. It is not a textbook or standard teaching material targeted towards undergraduate economics majors. It is also not a serious academic discourse targeted towards other economists. And yet, although it's supposed to be targeted towards the layman, the writing is oftentimes confused about its audience. Additionally, I didn't care for the writing style. While I do enjoy a casual and conversational tone, this book suffered from unnecessary tangential remarks that detracted from the main point. All of the writing issues in this book could have been easily rectified with a good editor. I don't fault the authors as much as I do the publishers for that oversight.
I weakly recommend Part I of Nudge to the intellectually curious layman. The rest of the book I recommend only to those want to read a laundry list of political suggestions.
55 of 77 people found the following review helpful
1.0 out of 5 stars 100 year old thinking.,
This review is from: Nudge: Improving Decisions About Health, Wealth, and Happiness (Paperback)A basic truth, but nothing new. It's marketing and advertising 101, only less ethical. Walk through the supermarket. Eye-catching packages nudge you toward a product, though you are free to choose others.
Ask any retail store designer about choice architecture. It's their stock in trade. At least we know that marketers and advertisers are trying to manipulate us. How less moral is it to advocate slippery people in government deciding they know better what's good for us and secretly manipulating our choices?
3 of 3 people found the following review helpful
3.0 out of 5 stars An overly long Nudge in the right direction,
This review is from: Nudge: Improving Decisions About Health, Wealth, and Happiness (Kindle Edition)I accidentally stumbled upon a group of books that support a theory I call "our little fake worldviews." My theory is, basically, that large amounts of things we believe -- and do so very firmly in some instances -- aren't even true.
The first in the series I found was "Mistakes Were Made (But Not By Me), by Carol Tavris and Elliot Aronson. This book was followed by, The Self Illusion: Why There Is No "You" Inside Your Head, by Bruce Hood. Both of these books are highly recommended. Later, I found "Thinking, Fast and Slow," by Daniel Kahneman, which I'm reading now.
The basis of the books are that people are terribly easy to manipulate. For example, if you can prime someone by asking the question in a certain way, you can skew the answers given to the question. For example, if you ask the question, "Did Gandhi live to be 144 years old?" You can make people give a much higher age of death for Gandhi than his actual age when he died. Why? Because by inserting "144 years old" into the question, the majority of people start at 144 years old and go down, having a mental image of a very old man in the process (This example was actually from "Thinking, Fast and Slow," by Daniel Kahneman).
The first section of Nudge is very similar to the above books, being filled with interesting studies that show how little there actually is to "us." While very good, unfortunately, some of the studies had actually been covered in the above books somewhere. At some points, it seemed that entire paragraphs were interchangeable between books, as there were sections that I remember almost word for word from other books. I'm not sure who quoted, who, though, or which books even.
The second section of the book is about retirement plans, investing, insurance, etc. The connection to the first section is that, if people are "nudged" in the right direction (by subtle manipulation), the public at large can be pushed in a direction that benefits both the individual and society as a whole. The authors seem to think they are taking a libertarian position while doing their nudging, but as someone who has studied a lot of libertarians philosophy, nothing really jumped out at me as being overtly libertarian in origin.
Unfortunately, the authors are very long winded. The first section of the book is admittedly really interesting. However, if you don't actually have investments, stock, or retirement plans at work, you can just skip the second half of the book. It is tedious and boring.
While I'm sure the book may be of some help to people who actually have investments, stock, retirement plans, etc., this book could be skipped in favor of the similar but better books mentioned above. If you are interested in this book because of its purported libertarian leanings, I would suggest something from Ron Paul instead.
All in all, I am not disappointed for buying the book, but I sure wouldn't put this at the top of my list for must reads.
5 of 6 people found the following review helpful
3.0 out of 5 stars An introductory treatment of how to affect choices,
This review is from: Nudge: Improving Decisions About Health, Wealth, and Happiness (Paperback)This book was recommended as an introduction to libertarian paternalism in a lecture on behavioral economics by Nobel-prize winner Daniel Kahneman. Per wikipedia, libertarian paternalism is "a
political philosophy that believes the state can help you make the choices you would make for yourself--if only you had the strength of will and the sharpness of mind. But unlike 'hard' paternalists, who ban some things and mandate others, the softer kind aims only to skew your decisions, without infringing greatly on your freedom of choice". It was a new concept to me, and I wanted to learn more. Based on Kahneman's recommendation and a column by George Will in Newsweek, I had expected something a bit more sophisticated---more political philosophy and less practical psychology. Although the authors mention libertarian paternalism frequently and devote the last third of the book to ways to affect social choices, there is little discussion of the basis for libertarian paternalism. . This is not a criticism, but readers should be alerted that this is not a book about libertarian paternalism. Disappointingly, the practical applications of libertarian paternalism discussed were pretty obvious once the concept is defined, although the authors seemed to dwell on them much too long, as if they needed extensive explanation.
Nudge is really more about improving decisions of all types, as the subtitle says. Judged on this basis, if you are new to the subject of how to make or influence decisions, you may enjoy it. It covers just about all the most famous experiments and the work on biases in decision-making of people like Tversky and Kahneman. It is a fascinating subject, but the discussions are so protracted that even if the material is new, I would suspect you might get as impatient as I did. The type of person who is likely to be attracted to this book is also likely to be intelligent enough not to need the implications of each idea spelled out in the detail provided here.
Readers with a long-standing interest in inteligent layman-level books on how we make decisions, such as Predictably Irrational or The Invisible Gorilla, are not likely to find much that is new in Nudge. I think there was one study in the book that was new to me. The applications to governmental "nudges" of citizen choices were not original enough to make reading it worthwhile such a reader. Once they defined the concept, the authors did not add much.
A real disappointment was the writers' inattention to precision in their writing, which grew to the point where I became reluctant to accept their facts. As an example, in the discussion of the Medicare Part D plan, the authors cited the low participation rate when the plan was introduced and said it would have been even worse except that federal retirees and many retirees of large corporations were "easily or automatically" enrolled. On the contrary, federal retirees and many retirees from large corporations already have prescription drug coverage and therefore Part D would not even be appropriate for them. I do not know if the authors did not know this or were simply imprecise on their writing, but the reader will come to the wrong conclusion in any case.
George Will's Newsweek column is a good summary of the book that can help you decide if you want to try it. However, I cannot recommend the audio version to anyone. The reader has a pleasant, clear voice, but too often he annoys with a Valley Girl-style intonation, ending factual statements with a rising questioning inflection. He also mispronounces words such as "mischievous", "laissez-faire", and "err". Both of these failings I consider inexcusable in a commercial recording.
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Nudge: Improving Decisions About Health, Wealth, and Happiness by Cass R. Sunstein (Paperback - February 24, 2009)