Book Review: Nudge

Title: Nudge: Improving Decisions About Health, Wealth, and Happiness

Authors: Richard H Thaler and Cass R Sunstein

Publisher: Penguin Books

Year of Publication: 2009

‘Nudge: Improving Decisions about Health, Wealth, and Happiness’ by Richard H. Thaler and‎ Cass R. Sunstein is an attempt to demonstrate how one can unconsciously make better decisions by designing the environment, or through what the authors call ‘nudges’. As the title implies, the book aims to make its readers make better decisions. The book examines the principles of behavioral economics to understand and influence behaviors. In fact, it is a fine mix between psychology and economics. In many respects, the book talks about the idea of ‘free choice’. Put simply, it means that the way in which a choice is presented affects the decisions made by the chooser.


The book is co-authored by two professors: Thaler and Sunstein. Thaler is an American economic and a distinguished professor of behavioral science and economics at the University of Chicago. He has worked closely with Nobel Prize laureate Daniel Kahneman on multiple occasions in further defining his field of expertise. In fact, Thaler himself received the 2017 Nobel Prize in Economics for his work in “understanding the psychology of Economics”. Cass Sunstein, also a professor has taught law for 27 years and is a legal scholar, particularly in the fields of constitutional law, administrative law and behavioral economics. The expertise of the co-authors in behavioral economics is very well reflected throughout the book. 


Nudge is divided into four sections: Humans and Econs, Money, Health and Freedom and has a total of 16 chapters. What I really liked about the book is its brief introduction where the authors introduces to its readers various concepts: choice architecture, Liberatarian Paternalism, default options and the authors’ understanding of ‘nudge’. The introduction sets the premise for the succeeding chapters. At the very onset, the authors point out that human beings are not flawless, and that they are prone to errors, which can make their decisions flawed and biased. People are lazy and uninformed. Here the authors introduce us to the concept of nudge, which can be used to improve the decisions made by people by maximizing the number of choices and a little bit of interference (Libertarian Paternalism). According to the author the six principles of good choice architecture are: –

• Ncentives 
•  Understanding mappings 
•  Defaults 
• Give feedback 
• Expect error
• Structure complex choices

The book also recommends how society can be better if it chooses to follow some type of Paternal Libertarianism. The nudge theory can help the person to make smarter decisions while being transparent of all the options. Nudge, according to the authors are small, subtle pushes in our world to sway one’s opinion. Nudge matters, which is why they should be carefully designed. The authors presented nudges in both political and the economic space. 


One of the concepts that I found most interesting in this book is the idea of choice architecture. The idea doesn’t believe in taking choices away from people, but it believes that the decisions of people may vary if the choices are presented in different ways. The book opens with a discussion of a school cafeteria, and the authors demonstrated how anyone can affect the eating habits of kids by changing how you place the food on display. Putting healthier food at eye level rather than fatty food will nudge kids towards eating more healthy food. This nudge will improve the eating choices made by kids, while not limiting the choices of unhealthy fatty food at the same time.  Accordingly, no choice presented to us in a neutral way, and that we are all susceptible to biases that can lead us to make bad decisions. The authors’ give similar examples to build their argument, be it retirement plans or organ donors, nudges are everywhere! 


Throughout the book, the authors presents to its readers a number of examples to build their argument. I particularly liked the author’s solution for the gay marriage issue, which is for the government to get out of the marriage business altogether. The authors talks about civil union, which is open to all couples irrespective of their sex or the sex of their partner. Similarly, the anecdotes presented by the writers are funny and interesting too. 


At the same time, there are no wow moments in the book. The book took me longer to read, which is reasonable for a book of its length. Nudge barely manages to engage its readers, and the examples could help a little. Although the ideas presented in the book can be applied anywhere, a majority of the examples were from the United States, due to which I had a little difficulty in understanding the context. In fact, I had to skim through a few chapters because the writers’ arguments were repetitive. At one point of time, it feels as though the authors are identifying every possible nudge and offering their suggestions. The authors refers to themselves throughout the book in third person, which is also a little odd. 


In conclusion, the book is well written and the authors are quite systematic in laying out their cases. Both Thaler and Sustein gives it readers different perspectives on the topics covered. Nudge is set in a simple premise and authors’ view of the human nature is sound. The book can encourage intelligent discussion about the nudge theory. The book is not something to finish in a single sitting. It is nice to read it in sections and is a good way to spend random pockets of time.