Summary Of Nudge: Improving Decisions About Health, Wealth And Happiness
Book Review
P.GURUPRASAD (UP-99) B-02 Nudge: Improving Decisions About Health, Wealth and Happiness
Authors: Richard H. Thaler and Cass R. Sunstein
Publisher: Penguin Books (2009) 306 pp
Decision makers make choices in an environment where many features can influence their decisions. Can small and apparently insignificant features of everyday situations enhance our health, wealth and happiness? With their path breaking book, Richard Thaler and Cass Sunstein suggest that it is possible to steer people to better choices by structuring choice situations without taking away their freedom. They use the term nudge to do it. Nudge normally means a gentle push to urge into action. The authors described Nudge as “….any aspect of choice architecture …show more content…
The first part of the book contains the core concepts, including libertarian paternalism, nudge, choice architecture. The second and third parts discuss a series of examples illustrating application of these concepts to various challenges in the realms of finance and health. In the fourth part, the authors try to objectively defend nudges against various possible objections through their convincing counterarguments. In the postscript the authors analyse the financial crisis of 2008 in the framework of nudge.
Sunstein and Thaler are critical of the neo classical economic view of humans which is based on the assumption of unbounded rationality. They illustrate the contrast between normal human behavior and logical behavior by presenting the construct of two different types of people called Humans and Econs. Based on research of modern behavioral economics, they reason that human beings (termed as Humans) have bounded rationality, are fallible and make predictable mistakes. They take humanness as given and aptly summarize the various biases, errors and social influences that affect the decision …show more content…
The authors claim it as their new movement. They contend that “the libertarian aspect of our strategies lies in the principle that people should be free to do what they like. In our opinion, a policy is paternalistic if it tries to influence the choices in a way that will make choosers better off, as judged by themselves..”. They also argue that Libertarian paternalism is a relatively weak, soft and non intrusive type of paternalism because choices are not blocked, fenced off or significantly burdened.(p.5). They propose it as a policy approach that preserves the freedom of people in making choices and argue for efforts by institutions, both government and private, to steer people to better choices that will improve their lives. Many people tend to reject any kind of paternalism on the false assumption that all people at all times make choices that are in their best interest or their choices are better than those that would be made by someone
P.GURUPRASAD (UP-99) B-02 Nudge: Improving Decisions About Health, Wealth and Happiness
Authors: Richard H. Thaler and Cass R. Sunstein
Publisher: Penguin Books (2009) 306 pp
Decision makers make choices in an environment where many features can influence their decisions. Can small and apparently insignificant features of everyday situations enhance our health, wealth and happiness? With their path breaking book, Richard Thaler and Cass Sunstein suggest that it is possible to steer people to better choices by structuring choice situations without taking away their freedom. They use the term nudge to do it. Nudge normally means a gentle push to urge into action. The authors described Nudge as “….any aspect of choice architecture …show more content…
The first part of the book contains the core concepts, including libertarian paternalism, nudge, choice architecture. The second and third parts discuss a series of examples illustrating application of these concepts to various challenges in the realms of finance and health. In the fourth part, the authors try to objectively defend nudges against various possible objections through their convincing counterarguments. In the postscript the authors analyse the financial crisis of 2008 in the framework of nudge.
Sunstein and Thaler are critical of the neo classical economic view of humans which is based on the assumption of unbounded rationality. They illustrate the contrast between normal human behavior and logical behavior by presenting the construct of two different types of people called Humans and Econs. Based on research of modern behavioral economics, they reason that human beings (termed as Humans) have bounded rationality, are fallible and make predictable mistakes. They take humanness as given and aptly summarize the various biases, errors and social influences that affect the decision …show more content…
The authors claim it as their new movement. They contend that “the libertarian aspect of our strategies lies in the principle that people should be free to do what they like. In our opinion, a policy is paternalistic if it tries to influence the choices in a way that will make choosers better off, as judged by themselves..”. They also argue that Libertarian paternalism is a relatively weak, soft and non intrusive type of paternalism because choices are not blocked, fenced off or significantly burdened.(p.5). They propose it as a policy approach that preserves the freedom of people in making choices and argue for efforts by institutions, both government and private, to steer people to better choices that will improve their lives. Many people tend to reject any kind of paternalism on the false assumption that all people at all times make choices that are in their best interest or their choices are better than those that would be made by someone