Robert Thaler had just received the 2017 Nobel Prize in Economics for incorporating psychologically realistic assumptions into analyses of economic decision-making. Being an enthusiastic learner of behavioral economics, it was a trigger & I wanted to know more!

And then came the final nudge! A WhatsApp message on one of my office groups, a link to an article on Thaler’s views, followed by a message recommending his book ‘Nudge’

Co-authored with Cass Sunstein, the book introduced me to two extremely useful concepts: 1. ‘choice architecture’ and 2. ‘libertarian paternalism’. Thaler & Sunstein argues the need to steer people’s choices in directions that will improve their lives. By exploring the consequences of limited rationality, social preferences, and lack of self-control, the book shows how these human traits systematically affect individual decisions as well as market outcomes.

To make the point, early on, the reader is introduced to Homo Economicus (or economic man) or Econs who paid full attention, possessed full information, had unlimited cognitive abilities and full self-control, as opposed to Humans.

The 1^st three Chapters, get you thinking as you get introduced to some simple and yet striking ideas and terrific examples around Automatic & Reflective Systems of thinking; the 3 heuristics of anchoring, availability and representativeness; Biases and Framing; spotlight effect; collective conservatism & pluralistic ignorance; and priming.

The Chapter on Choice Architecture is a gem for those designing products or programs for human users. The Six Principles of good choice architecture that when arranged (with a small fudge) emerge as a mnemonic device that reads N.U.D.G.E.!

Thaler & Sunstein then carry forward these concepts to drive home the importance of nudging humans to help them save, invest & insure better. The next part is about making choices and nudging required in medicare, organ donation, fuel saving, donations & filing tax returns. Some of these can get boring & sound like a sermon for readers not overtly enthused by these subjects.

The chapter where the authors argue about privatizing marriage is an interesting read and I guess is the future forward.

While the first half of the book is a fast,fun read and keeps you deeply engaged, the Chapters towards the end could be a drag for a normal reader. The Bibliography is a treasure of books, articles and references for the academically oriented.

I will strongly recommend it as an important read for people involved in product architecting & design, advertising, behavioral studies, economics, managing human resources and a must for those in government and politics.

Did I Nudge you?

© Sanchayan Paul