Review: Nudge–Improving Decisions About Health, Wealth, and Happiness

5 Star, Communications, Decision-Making & Decision-Support

NudgeInnovative, Helpful, Relevant: Opening Shot in Science of Choice, March 26, 2008

Richard H. Thaler

This is one of several books on decision-making and choice I have ordered, the first to arrive. I had no idea when I ordered it, based on the title, that the first author was Distinguished Professor of Behavioral Science and Economics as well as the Director of the Center for Decision Research at the University of Chicago, and the second author was Cass Sunstein, one of three lawyers I would not automatically sentence to exile.

I really liked this book. It can be read fast or slow. I went fast, if one accepts the authors’ propositions at face value, the details are not as necessary. These guys are heavy hitters with a very serious case to present. Although I did not see references to predecessors in this area, such as Herb Simon’s “satisficing,” the one word I remember from my MPA finished in 1987, the bibliography and notes are excellent and I have the feeling the authors and their research assistants have been thorough with the recent literature (last 15 years).

The book opens with a compelling example: a cafeteria manager discovers that she can seriously influence students by how the food is placed, arranged, and displayed, moving an entire student body toward healthier choices (or not).

The authors term such a person a “choice architect” and say that like physical architecture, there is no such thing as a “neutral” choice. They go on to discuss the emerging science of choice. I love this, in part because I just published a book, Collective Intelligence: Creating a Prosperous World at Peace (free online at Earth Intelligence Network) intended to force acceptance of Collective Intelligence as a sub-discipline within Cognitive Science. We succeeded.

The authors coined the term NUDGE from the ardiously broken down:
iNcentives
Understand mapping
Defaults matter
Give Feedback
Expect Error
Structure complex choices

Corney, but no worse than my own United Nations Open-Source Decision-Support Information Network (UNODIN). This is an important book, and the last one, “structure complex choices,” is in my view the critical one because we are in an era when our politically-elected leaders know nothing of the real world and are surrounded by advisors that are hacks who are terrified of anyone with a brain gaining access to “their” candidate. No one now running for President of the USA is qualified to date, for this very reason. Not one of them can appoint a transpartisan cabinet, produce a balanced budget, name the ten threats to humanity, list the twelve core policies from agriculture to water, or explain why we have less than six years to create a sustainable model that we can present to Brazil, China, India, Indonesia, Iran, Russia, Venezuela, and Wild Cards like the Congo, which is as big as the USA.

Leadership must be redefined, and I believe that the authors have put together a capstone book that is richly qualified to join books such as The leadership of civilization building: Administrative and civilization theory, symbolic dialogue, and citizen skills for the 21st century and Leadership and the New Science: Discovering Order in a Chaotic World and the oldie but goodie by Harlan Cleveland, still a best in class offering, The Knowledge Executive.

The authors distinguish between Automatic Mind and Reflective Mind, and I cannot help but tie this to the truly elegant essay The Future of the Internet–And How to Stop It in which the urgency of preserving generative freedom to innovate at the edge of the network is retained. I see such a convergence among all the books I am reading, and am reminded now of Kevin Kelly’s unigue Out of Control: The New Biology of Machines, Social Systems, & the Economic World. The problem we face is that government and all other organizations are pyramidal, secretive, selfish, and generally corrupt–and busy trying to “lock down” the appliances, one reason I will never buy an iPhone or an XBox.

The authors explore hor people are so unrealistically optemistic about their own capabilities (and I would add, unnecessarily suspect of the other, one reason I recommend to one and all Derek Leebaert’s The Fifty-Year Wound: How America’s Cold War Victory Has Shaped Our World.

I agree with their discussion of the bias toward the status quo and truly appreciated their discussion of social influences (herd mentality). This is different from wisdom of the crowds, smart mobs, etc.

They have four chapters on money (savings, investing, credit, and social security), and the bottom line for all four is this: 1) it is possible to structure complex choices so people have freedom but err on the side of wisdom; and b) defaults matter.

In the section on health they discuss prescriptions, organ donation, and the environment. Here I would simply note that we know how to cut Medicare prescription costs to 1% of their existing and projected costs, but Congress is both gutless and totally lacking in ethics. I will also note that in another book I reviewed recently, the Chinese have discovered that they are losing TEN PERCENT of the Gross Domestic Product to envrionmentally-related loss of work productivity. This is serious!

In the section on Freedom their “libertarian paternalism” shows itself in full force as they discuss school choice, doctors, and marriage. I will not be critical here, other than to note that reforming education is NOT about school choice, it is about changing the entire model to throw out rote learning in neat little rows and testing of memorized regugitation. See Pedagogy of Freedom: Ethics, Democracy, and Civic Courage (Critical Perspectives Series) and Teaching to Transgress: Education as the Practice of Freedom, among others.

They end with a dozen “example” nudges that I will not list here, in part because I do like this book, it is an easy read, and it is worthy of your time and money. Do not expect a scholarly tome with lots of pretentious mathematics. This is a good book for real people, and all the more valuable because the science of choice, like services sciences and collective intelligence as a cognitive-socio-economic ideo-cultural techno-demographic force, is going to make a very positive contribution to how we self-organize and how we respond to those who would be Epoch B leaders rather than dictators that take We the People for granted.

Buy this book–it might not improve your own decisions, but it will assuredly help you think about what to look for in a leader.

See also:
The World Cafe: Shaping Our Futures Through Conversations That Matter