Nudge: Improving Decisions About Health, Wealth, and Happiness

“As we shall see, small and apparently insignificant details can have major impacts on people’s behavior. A good rule of thumb is to assume that everything matters.”

Thaler and Sunstein set up the premise of their book: that small changes in the structure of decision-making can lead to significantly different outcomes in human behavior. Scientific attention to detail is key to government and corporate policy making. It is incumbent on “choice architects” to manage the context of decision-making with the best interests of people in mind.

“The false assumption is that almost all people, almost all the time, make choices that are in their best interest or at the very least are better than the choices that would be made by someone else. We claim that this assumption is false—indeed, obviously false. In fact, we do not think that anyone actually believes it on reflection.”

Thaler and Sunstein thoroughly discount the idea of Homo economicus, the model of human behavior, typically accepted in classical economics, that humans are rational actors. The view is so intuitively preposterous, and at odds with experience, that Thaler and Sunstein dismiss it out of hand. The libertarian paternalist view that they expound is premised on the idea that humans are fallible creatures who do not always have access to the time, resources, or information to make the most rational decision.

“So, to be clear: this book is not a call for more bureaucracy, or even for an increased role of government. We just strive for better governance. In short, libertarian paternalism is neither left nor right. For all their differences, we hope that people with very different political convictions might be willing to converge in support of gentle nudges.”

The goal of Thaler and Sunstein’s work is not to propose a political theory. It is to propose a theory for more effective and efficient government practice, regardless of the political ideology. They believe that nudges are effective regardless of the direction in which the person is being nudged and that conservatives and liberals alike can make use of better choice architecture in the implementation of their agendas.