Monday, May 25, 2009

Nudge: Improving Decisions About Health, Wealth and Happiness

Defaults. I read half of Richard Thaler and Cass Sunstein’s collaboration, Nudge, a few months ago. Then I set it aside, and finished it up recently. It’s possible that the pause made me like the book even more. Just when I thought I had read enough, and got their point, I stopped reading. After I returned, I learned more that I thought I knew, and found them even more clever as a result of reading Nudge to the end. The authors observed that humans make decisions in ways different from that expected by economists, or the way econs think they would be made to optimize outcomes. The path of least resistance makes a world of difference, so default choices matter a lot. An expectation of error can also lead to improved decision making because it turns out that humans aren’t great decision makers. A nudge is anything that influences our choices, so well constructed nudges can produce better outcomes. These University of Chicago professors have written a cogent, thoughtful and entertaining book about an important subject, and chances are any reader will come away from the book with an increased thoughtfulness about decision making.

Rating: Three-star (Recommended)

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