Nudge: Improving Decisions about Health, Wealth, and Happiness

Nudge: Improving Decisions about Health, Wealth, and Happiness by Richard H. Thaler and Cass R. Sunstein Penguin 2009 312 pages ISBN: 978-0143115267 Reviewed by Scott Flanagan In higher education, the power to influence is often more potent than position authority (Bergquist 1992; Birnbaum 1988). Nudge explores the relationship between decision process design (choice architecture) and decision making and suggests that conscious choices about choice architecture can improve decision making. College campuses are full of intelligent people who sometimes struggle to understand behavior that is not rational. Nudge helps to explain the reasons why and how rational decision making can be supported by choice architecture. The authors, Richard Thaler and Cass Sunstein, worked on this book during the course of their years together as faculty members at the University of Chicago. Since then, the authors have reportedly become part of a "behavioral dream team" (Grunwald 2009, p. 29) that influenced then-Senator Obama's campaign, and President Obama has appointed Sunstein to a leadership role in reviewing and crafting federal policies. While college and university planners are not its primary target authence. Nudge carries implications that planners can use to enhance the effectiveness of their work. Thaler and Sunstein collaborated during weekly lunches at the same restaurant. At times the book has the comfortable, colloquial feel of a conversation among colleagues. The book is written in an accessible manner for a broad authence with examples liberally and skillfully used to illustrate key points. It is not the result of new research, but is rather the distillation of previous work in the field of behavioral sciences, presented in a manner easy to understand and apply. In this respect, it is similar to Freakonomics (Levitt and Dubner 2005), 77ie Tipping Point (Gladwell 2000), Outliers (Gladwell 2008), The Black Swan (Taleb 2007), and other recent works that communicate complex ideas simply. The book contains sufficient scholarly background, which gives its observations and recommendations more weight than other recent popular works that seem to be only a series of anecdotes loosely organized around a theme. Nudge is organized in five parts: an introductory exploration of the concept of libertarian paternalism, the impact of nudges upon financial, health, and lifestyle decisions (respectively), and a concluding section suggesting other specific applications of the concept. The book is built on two key foundations. The first is that there is no such thing as neutral design. Whether intended or not, the choice architecture of every process influences the likelihood of particular outcomes. Exposing the myth of neutral design is one of the most powerful ideas in the book. Second, individuals do not tend to act rationally. Most of us have every good intention to pursue financial and physical health, yet we often buy more investments when the stock market is increasing in value, save less than we know we should, eat unhealthy food too frequently, exercise too infrequently, etc. Thaler and Sunstein describe this pheonmenon by contrasting the decisions of two groups of people: Econs (mythical individuals who make perfectly rational decisions) and Humans (who are subject to flaws in decision making). While the non-existent Econs have no trouble translating their rationality into action. Humans are easily confused and sometimes paralyzed by decisions with many options. Further, Humans have difficulty associating short-term decisions with the long-term impact of those decisions (hence the difficulties with the saving habits and waistlines of many Americans). Taken together, these two foundations lead to a conclusion that Thaler and Sunstein term "libertarian paternalism." The authors summarize the logic behind the idea of libertarian paternalism accordingly: "Choice architecture and its effects cannot be avoided, and so the short answer is an obvious one. …