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Nudge
Improving Decisions about Health, Wealth and Happiness
The message of Nudge is to show us how we can be encouraged, with just a slight nudge or two, to make better decisions. The book starts by explaining the reasons for wrong decisions we make in everyday life.
- Anyone who wants to live a healthier, more disciplined life
- Anyone interested in how countries and companies can influence people’s decisions
Richard H. Thaler (b. 1945) is a professor of Behavioral Science and Economics at the University of Chicago. Cass R. Sunstein (b. 1954) is a professor at Harvard Law School and serves as an advisor to president Barack Obama.
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Nudge
Improving Decisions about Health, Wealth and Happiness
- Read in 16 minutes
- Audio & text available
- Contains 10 key ideas
Synopsis
The message of Nudge is to show us how we can be encouraged, with just a slight nudge or two, to make better decisions. The book starts by explaining the reasons for wrong decisions we make in everyday life.
Key idea 1 of 10
We often make bad decisions based on either too little or overly complex information.
Why do we so often make decisions that aren’t really the best choices for us? In many cases, we simply have too little or too much information, or we can’t foresee the consequences of our actions. It’s only when we have, and can process, the right amount of information that we are in a place to make rational decisions.
For example, when we have to choose an ice cream flavor at an ice cream shop, we usually make that decision rather quickly. We see which flavors there are and we know from experience that strawberry ice cream tastes better than mango, i.e., we have all the necessary information and can process it rapidly.
However, we feel differently in more serious situations, like when deciding whether to take out a loan. After all, there are all different kinds of loans: purchases on account, deferrals, consumer loans, securities, preliminary financing, interim financing, and many more. Some of them have a fixed interest rate, others a variable; all of them have different additional costs. And this information isn’t exactly laid out in plain writing. Usually, it’s hidden in the small print on the bright and colorful advertisement.
In other words, even when we are privy to all the relevant information, it can still be difficult to sort it all out and compare the services objectively. Situations like this can make us feel completely overwhelmed.
We often make bad decisions based on either too little or overly complex information.
Key ideas in this title
- We often make bad decisions based on either too little or overly complex information.
- Human beings act mainly on gut feelings.
- Sometimes we make faulty decisions because we succumb to temptation or act without thinking.
- Some companies exploit the human tendency to make the wrong decisions.
- Nudges are subtle changes in context that help us avoid making bad decisions.
- Defaults are highly effective nudges that cause people to automatically do what’s best for them.
- Nudges are most useful when we have too many choices or when the future is at stake.
- Many people use nudges to achieve their goals.
- States and other institutions should use nudges to encourage wise decisions.
- Final summary
