Thaler, R et al ~ Nudge – Improving Decisions About Health, Wealth and Happiness

They differentiate Humans (homo sapiens) and Econs (homo oeconomicus).

Chapter 1 – Biases and blunders (traits of people)

Automatic and Reflective System of thinking

Rules of thumb:
Anchoring (compare with something we know: population of my city, etc.))
Availability (how present is sth. In our mind/memory: recent flood, etc.)
Representativeness (certain characteristics make us expect sth.: 7inch African-American is good at basketball)

Optimism and overconfidence (we nearly all are both of these)

Gains and losses (we fear losses more than we appreciate gains)

Status quo bias (inertia)

Framing (we will do things we normally wouldn’t if they are phrased the right way)

Chapter 2 – Resisting temptation (people have trouble resisting it)

Temptation (definition: being in a “hot” and not in a “cold” state)

Mindless choosing (most of the things we do work via our Automatic System: we don’t think)

Self-control strategies (examples of them)

Mental accounting (a specific and good example)

Chapter 3 – Following the herd (how group dynamics can be nudged)

Doing what others do (everybody does)
“Consistent and unwavering people, in the private or public sector, can move groups and practices in their preferred direction.”

The spotlight effect (we always think everybody is looking at us, that’s why we do what we expect them to expect us to do)

Cultural change, political change, and unpredictability (we do what others do and they do what we do)

Social nudges as choice architecture (by telling people what other people are doing, we can make them behave in a certain way)

Priming (if we prepare all the steps people have to take to do sth. we can raise the probability of them doing it)

Chapter 4 – When do we need a nudge? (the preconditions of situations that might require nudges)

Fraught choices (5 preconditions)
Benefits now – costs later (costs and benefits don’t happen at the same time)
Degree of difficulty (difficult situations)
Frequency (how often are we confronted with this situation?)
Feedback (we don’t see the effects of what we do immediately)
Knowing what you like (we don’t have a clear preference)

Markets: a mixed verdict (markets are sometimes disadvantageous for Humans)

Chapter 5 – Choice architecture (advice on how to design choices)

iNcentives (price and other)
Understand mappings (understand how a certain choice leads to higher welfare)
Defaults (the more complex the choice, the more important a good default selection is)
Give feedback (implement direct feedback into the choice)
Expect error (anticipate people to err and make fool-proof systems)
Structure complex choices (see what people did before and suggest accordingly or suggest new things)

Chapter 6 – Save more tomorrow

People don’t save enough money for their retirement, so nudges are necessary:
1. Make enrolment the default option.
2. Make enrolment automatic.
3. Education and forced choosing is nice in theory.
4. Save more tomorrow (contribution rises automatically with salary raise)
5. Governments should perhaps adopt this approach for the general public (at the moment in the USA it’s just specific companies that do this)

Chapter 7 – Naive investing

Retirement investment is long-term oriented. There was no 20 year time frame in history that didn’t show growth on the stock market. Loss seems to occur only short-term. Therefore everybody should invest at least part of their money in stocks, not just bonds. But they don’t do it. Nudges are necessary.

Chapter 8 – Credit market

Examples: mortgages and credit cards.
Both should be made more transparent and feature nudges, because especially lower-educated people get bad deals.

Chapter 9 – Privatizing Social Security

USA should do what Sweden did but with nudges.

Chapter 10 – Prescription Drugs

Automatic enrolment and nudges would help with the new medicare system in the USA.

Chapter 11 – How to Increase Organ Donations

Change the laws so that people can be nudged towards being organ donors.

Chapter 12 – Saving the Planet

Feedback and transparency would make people save energy without really changing or costing anything.

Chapter 13 – Privatizing Marriage

Legallly the term marriage should not exist anymore. Then the state wouldn’t have to fight with various religious and other institutions about laws governing it. Marriage should become a term solely used by private institutions, religious and other.

Chapter 14 – A Dozen Nudges

12 more examples for nudges.

Chapter 15 – Objections

They discuss several objections and explain why they are irrelevant.
The Slippery Slope: once you allow nudges, they will become more extreme with time.
Evil Nudgers and Bad Nudgers: lobbies will decide on nudges.
The Right to be Wrong: if somebody wants to be wrong he should be able to.
Of Punishment, Redistribution, and Choice: richer ones should not have to support poorer ones.
Drawing Lines and the Publicity Principle: when are subliminal nudges OK and when not?
Neutrality: government should be neutral.
Why Stop at Libertarian Paternalism: why only nudge if you can force?

Chapter 16 – The Real Third Way

This book offers a real alternative to the unnecessarily divided political landscape.

Postscript: The Financial Crisis of 2008

Great 4-page account of the reasons behind the financial crisis! It should be in my sources folder.

About the author

Woitek Konzal

Producer, Consultant, Lecturer & Researcher. I love working where technology meets media in novel ways. Once, I even won an Emmy for digital innovation doing that. Be it for a small but exciting campaign about underground electronic music collectives or for a monster project combining two movies, various 360° videos, 72 ARG-like mini puzzles, and a Unity game, all wrapped up in one cross-platform app – I have proven my ability to adapt to what is required. This passion for novel technologies has regularly allowed me to cross paths with tech startups – an industry and philosophy I am all set to engage with more. I intensely enjoy balancing out my practical work with academic research, teaching, and consulting. Also, I have a PhD in Creative Industries, a M.Sc. in Business Administration, and love to kitesurf.

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