{"id":50897,"date":"2021-10-17T17:37:00","date_gmt":"2021-10-17T21:37:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=50897"},"modified":"2021-10-17T17:53:18","modified_gmt":"2021-10-17T21:53:18","slug":"nudge-book-review","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/nudge-book-review\/","title":{"rendered":"Nudge: Book Review, Context, and Reception"},"content":{"rendered":"\n

Are you considering reading Nudge<\/em> by Richard H. Thaler and Cass R. Sunstein? Do you want to read a Nudge <\/em>book review before you make the purchase?<\/p>\n\n\n\n

In Nudge<\/em>, the authors explain that people are not the eminently rational beings that appear in most economic theories\u2014so-called homo economicus\u2014but instead, are fallible and often irrational economic actors prone to all sorts of biases. This book was revolutionary and even influenced policymakers when it came out in 2008.<\/p>\n\n\n\n

Keep reading for a full Nudge <\/em>review with commentary on its approach and context.<\/p>\n\n\n\n\n\n\n\n

Review of the Book Nudge<\/em><\/h2>\n\n\n\n

We will begin our Nudge <\/em>book review with a brief overview of the book. In Nudge<\/em>, Richard H. Thaler and Cass R. Sunstein propose a series of reforms\u2014\u201cnudges\u201d\u2014that can help policymakers and other choice designers<\/a> lead people to make better choices without restricting their freedom to choose<\/a><\/strong>. Thaler and Sunstein\u2019s premise is that no choice is ever neutral because the way a choice is presented, even if randomly, affects the way people engage with it\u2014and so governments, private companies, and other entities should frame options in ways that can improve people\u2019s decisions. Thaler and Sunstein call their approach to designing choices \u201clibertarian paternalism,\u201d which implies the freedom of libertarianism combined with the goodwill of paternalism. <\/p>\n\n\n\n

In this book, you\u2019ll learn how flesh-and-blood humans differ from the humans studied in economics, why people make bad investment choices, and how Thaler and Sunstein propose to revitalize the institution of marriage (by abolishing it). You\u2019ll also find commentary on the psychological research underlying Nudge<\/em>\u2019s concepts as well as more recent data that sheds new light on Thaler and Sunstein\u2019s findings.<\/p>\n\n\n\n

Richard H. Thaler<\/strong><\/h3>\n\n\n\n

Richard H. Thaler is the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago\u2019s Booth School of Business and a research associate at the National Bureau of Economic Research. Educated in economics at Case Western University and the University of Rochester, Thaler is a member of the National Academy of Science and has served as president of the American Economic Association. He won the Nobel Memorial Prize in Economic Sciences<\/strong> in 2017.<\/p>\n\n\n\n

Thaler followed Nudge <\/em>(2008) with Misbehaving: The Making of Behavioral Economics<\/em><\/a> (2015), part memoir and part <\/em>critique of traditional economic theory. <\/p>\n\n\n\n

Cass R. Sunstein<\/strong><\/h3>\n\n\n\n

Cass R. Sunstein is a professor at Harvard Law School and the founder and director of the Program on Behavioral Economics and Public Policy there. Sunstein holds a BA from Harvard College and a JD from Harvard Law School and has taught at the University of Chicago. He also clerked for Supreme Court Justice Thurgood Marshall.<\/p>\n\n\n\n

The author of hundreds of articles and dozens of books, Sunstein is known among legal scholars as an expert in constitutional law (he is the coauthor of a constitutional law casebook widely used in US law schools). He is also <\/strong>one of the most-cited legal scholars of all time<\/strong><\/a> for his work on constitutional, administrative, and environmental law<\/strong>.<\/p>\n\n\n\n

In early 2009, Sunstein was named President Obama\u2019s regulatory czar in the White House Office of Information and Regulatory Affairs (OIRA), which oversees all federal regulations. Because of Sunstein\u2019s support of libertarian paternalism<\/a>, his appointment drew critics from both the left<\/a> and the right<\/a>.<\/p>\n\n\n\n

Since the publication of Nudge<\/em>, Sunstein has continued to write books for popular audiences, among them Simpler: The Future of Government<\/em><\/a> <\/em>(2013) and The World According to Star Wars<\/em><\/a> (2016), which made the New York Times bestseller list. In 2018, he received the Holberg Prize<\/strong> from the Norwegian government, an award often described as the Nobel Prize for the law and humanities. <\/p>\n\n\n\n

The Book\u2019s Publication and Context<\/strong><\/h3>\n\n\n\n

Nudge was published by Yale University Press<\/a> in 2008 and released in paperback by Penguin Random House<\/a> in 2009. <\/p>\n\n\n\n

The Book\u2019s Context <\/strong><\/h4>\n\n\n\n

Thaler was heavily influenced by psychologists Daniel Kahneman (author of Thinking, Fast and Slow<\/em><\/a>) and Amos Tversky, with whom he worked at Stanford University. Building off their work, Thaler applied the concepts of behavioral psychology to economics, resulting in a new field: behavioral economics<\/strong>.<\/p>\n\n\n\n

Nudge <\/em>is grounded in this field. Its foundational premise is that people are not the eminently rational beings that appear in most economic theories<\/strong>\u2014so-called homo economicus<\/a><\/em>\u2014but instead, are fallible and often irrational economic actors prone to all sorts of biases<\/strong>. Because people are naturally disposed to making mistakes, Thaler and Sunstein argue, they need to be \u201cnudged\u201d toward the most beneficial decisions.<\/p>\n\n\n\n

The book covers much of the same ground as other investigations of human behavior and cognitive biases<\/a>. For example, Thaler and Sunstein describe two systems of brain functioning: the \u201cAutomatic System\u201d and the \u201cReflective System.\u201d These two systems are similar to <\/strong>Kahneman\u2019s \u201cSystem 1\u201d (thinking fast) and \u201cSystem 2\u201d (thinking slow)<\/strong><\/a>. <\/strong>The two systems<\/em> theory also plays an integral role in Philip E. Tetlock and Dan Gardner\u2019s Superforecasting<\/em><\/a> <\/em>and Nassim Nicholas Taleb\u2019s The Black Swan<\/em><\/a>. <\/p>\n\n\n\n

Nudge <\/em><\/strong>departs from other accounts of cognitive biases in its examples and proposed solutions<\/strong>. Thaler and Sunstein\u2019s object is to teach choice designers\u2014public and private policy makers\u2014how they can \u201cnudge\u201d people toward better<\/em> choices.<\/p>\n\n\n\n

The Book\u2019s Impact<\/strong><\/h4>\n\n\n\n

Upon its release, Nudge <\/em>was reviewed by a host of periodicals, including The New York Times<\/em><\/a>, The Guardian<\/em><\/a>, The New Yorker<\/em><\/a>, and The Sunday Times<\/em> (London)<\/a>. The Economist<\/em><\/a> picked Nudge <\/em>as one of the best books of 2008.<\/p>\n\n\n\n

As its authors intended, the book also had an influence on policymakers<\/strong>. As noted above, Sunstein was appointed by President Obama to apply libertarian paternalism approaches to US federal regulations. Additionally, the UK established a \u201cBehavioral Insights Team\u201d\u2014colloquially known as the \u201cNudge Unit\u201d\u2014in 2010 to help British citizens make better choices through nudges<\/a>.<\/p>\n\n\n\n

Critical Reception<\/strong><\/h3>\n\n\n\n

Positive reviewers of Nudge <\/em>lauded the authors\u2019 ability to make academic research accessible to a popular audience<\/a> and largely agreed with the book\u2019s argument that, because people are liable to make decisions that don\u2019t serve their best interest, choice designers and policymakers should use non-coercive measures like nudges to improve people\u2019s choices<\/strong>. <\/p>\n\n\n\n

Reviewers also had critiques of the book<\/strong>. In The Guardian<\/em>, policy analyst and Brookings Institution fellow Richard V. Reeves found some of the book\u2019s examples \u201ctrivial\u201d as well as controversial. For example, he took issue with Thaler and Sunstein\u2019s suggestion that governments institute mandatory waiting periods before their citizens could get married<\/a> (to help reduce divorce rates). For Reeves, a nudge like this brings libertarian paternalism closer to paternalism than libertarianism.<\/p>\n\n\n\n

In The<\/em> New York Times<\/em>, Harvard economics professor Benjamin M. Friedman minimized Thaler and Sunstein\u2019s contribution as simply proving that \u201ccommon sense\u201d exists<\/a>. For Friedman, many of the nudges suggested by Thaler and Sunstein\u2014for example, making \u201cyes\u201d to organ donation the default rather than \u201cno,\u201d or making employees opt out <\/em>of regular contributions to a retirement plan rather than opt in\u2014<\/em>would be obvious to anyone with a bit of common sense<\/a>. <\/p>\n\n\n\n

Behavioral economics in general, too, has come in for criticism<\/strong>. On the scholarly side, academic economists and psychologists have questioned the validity of behavioral economists\u2019 experiments and their interpretation of the experimental results<\/strong>. For example, psychologist Gerd Gigerenzer argues that libertarian paternalism overstates people\u2019s irrationality and selectively reports research findings<\/a>.<\/p>\n\n\n\n

Critiques of behavioral economics have also appeared in publications for general readers. In The New York Times<\/em>, University of Illinois at Chicago professor of marketing David Gal argues that behavioral economists concentrate too much on how <\/em>human behavior deviates from standard economic models and give short shrift to explanations why <\/em>it does. Gal also notes that the evidence for the effectiveness of nudges is scant<\/a>.<\/p>\n\n\n\n

In a review of two of Sunstein\u2019s later books, NYU law professor Jeremy Waldron wonders whether Thaler and Sunstein skirt the ways in which entities, especially governments, could use nudges for ill<\/a>. In another, Yale law professor Samuel Moyn questions the effectiveness of nudges when an entire social system disadvantages certain people<\/a>.<\/p>\n\n\n\n

Commentary on the Book\u2019s Approach<\/strong><\/h3>\n\n\n\n

Thaler and Sunstein write accessibly and, often, humorously. One way the authors engage readers is by beginning chapters with effective examples of the cognitive bias<\/a> or behavioral foible they\u2019re focusing on. For instance, they open by inviting readers to look at two drawings of a table. At first glance, the tables seem to be quite different: the one on the left appears to be long and narrow, the one on the right shorter, with sides of more equal length. But, in fact, the tables are of equal size; they look different because of the way they\u2019re positioned on the page. <\/strong>This illustrates that certain errors of judgment are human nature.<\/p>\n\n\n\n

In general, each nudge that the authors discuss is tied to a specific cognitive bias drawn from the behavioral psychology literature<\/strong>. For example, nudges to help increase the number of organ donors rely on \u201cstatus quo bias\u201d\u2014the idea that people will typically not change the default setting that\u2019s selected for them.<\/strong> However, the authors often suggest nudges but don\u2019t <\/em>explicitly connect them to any specific cognitive bias.<\/p>\n\n\n\n

Commentary on the Book\u2019s Organization<\/strong><\/h3>\n\n\n\n

Nudge\u2019s<\/em> structure gives the reader a solid grounding in the concepts Thaler and Sunstein will be using before illustrating the real-life applications:<\/p>\n\n\n\n