Henk's Reviews > Nudge: The Final Edition

Highly readable and interesting how small biases can have enormous effects on everyday life
Objections to nudging perse make as much sense as being against breathing or water, even if you don’t like it, it’s all around you

Very interesting and illuminating how we are constantly being nudged as consumers and citizens. Nobel Prize winner Richard H. Thaler argues that in the face of the many biases present in human nature, we should be choice architects, creating the context in which people make decisions in an optimal way, while allowing them opt-outs as well. The seemingly paradoxical term Liberatarian paternalism is chosen to underpin that nudging should be done for good, instead of being coercive. Some observations from reading Nudge: Improving Decisions About Health, Wealth, and Happiness are below.

Nudges in themselves don’t chance economic costs but do impact choices of people in a predictable way. Think of just adding a sticker that a dish is the most ordered on a restaurant menu, leading to an item being ordered even more and reducing variability of orders (and potentially also increase margins for the restaurant)
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Default options and opt-in versus opt-out influences the choices from real humans, while they would not impact choices of the illusory homo economicus. Choice architecture is not optional, every system has some implicit and more explicit choices underpinning it, jet free (well-informed) choice being possible offers the best defence against bad designed systems.

Sensible shortcuts and rules of thumb can degenerate into a status quo bias and risk aversion.
Taking a lot from the work of Thinking, Fast and Slow, Thaler describes hot states (doers, system 1) versus cold states (thinkers, system 2) inside of each person. System 1 leads to many "Intranilities", moving bad outcomes to your future self.
Concepts from Influence: The Psychology of Persuasion also comes back a lot, with the use of social pressure/proof enforcing conformity.

Importance of curation of choices and making efforts feel like fun/gamefied, which is used by choice engines, a way to typecast for instance Booking.com and Expedia.
This has a dark side, making total, all-in prices less transparant via “sludge”, with quitting being made hard or via charging of hidden ex-post fees.

Extreme stickiness of pension fund choices, with even a fraud in Sweden leading to only 16% of people switching out of that fraudulent fund is another indication that not just choice is important, but also how apathy and inertia should be accounted for.
Illogical outcomes stemming from this is for instance the fact that one has a 3 times higher chances of being in need of an organ than being a donor statistically due to the long waiting lists and with 60% of people dying while on the list.
Small steps can have huge impacts, like Apple’s health app registering over 6 million people in the US as an organ donor.