Economics
by Richard H. Thaler and Cass R. Sunstein
Can a menu ever be neutral?
Every menu and every form has to list something first, and what comes first gets picked more. So someone is always steering you, say Richard Thaler and Cass Sunstein. Their book asks how to steer people towards better choices while leaving them free to choose otherwise.
Hear a sample · read by Laura
Economics textbooks imagine Econs, who calculate perfectly and never run short of willpower. Thaler and Sunstein write about Humans, who put things off and copy the crowd. We each have a fast Automatic System and a slow Reflective one, and the fast one often answers first.
Whatever happens if you do nothing is the default, and people cling to defaults. When American firms sign new staff up to the company pension and let them opt out, far more end up saving than when staff have to sign up themselves.
The authors call their approach libertarian paternalism. Paternalist, because it aims to leave people better off as they themselves would judge it. Libertarian, because nobody is forced. So a nudge must be cheap and easy to ignore. Fruit at eye level counts as a nudge. Banning junk food doesn't.
Thaler and Shlomo Benartzi designed a plan for people who can't face saving today. Workers agree in advance to put part of each future pay rise into their pension. Take-home pay never goes down, so it never feels like a loss, and savings climb with every rise.
Humans
Economic models assume flawless Econs. Real people, whom Thaler and Sunstein call Humans, forget things and give in to temptation.
Choice architecture
Someone always decides how choices are laid out, like which food sits at eye level in a canteen.
Nudges
A nudge steers people towards better choices but leaves every option open and easy to take.
Defaults
Most people stick with the default, so pick it with care. Automatic pension enrolment makes far more people save.
Save More Tomorrow
Save More Tomorrow asks workers to put part of future pay rises into savings, so saving never feels like a cut.
A story from the book
The book opens with a woman the authors call Carolyn, who runs the food for a big city's school canteens. Tests showed that laying out the same food differently changed what children ate. She has to arrange it somehow. So which layout should she pick?
One thing to try
Pick one thing you keep meaning to do more of and make it the default. Put the fruit bowl where the biscuits used to live, or set a transfer to savings for the day after payday. Then leave it alone for a month and see what changes.
Knotd has the key ideas from 250+ non-fiction books, each in a few minutes, in plain words. Nudge comes with a Name That Idea round to make it stick.
Get the whole book on KnotdOpen in the appCan a menu ever be neutral? Every menu and every form has to list something first, and what comes first gets picked more. So someone is always steering you, say Richard Thaler and Cass Sunstein. Their book asks how to steer people towards better choices while leaving them free to choose otherwise.
Econs and Humans; The pull of doing nothing; Steer, but don't block; Save More Tomorrow.
Pick one thing you keep meaning to do more of and make it the default. Put the fruit bowl where the biscuits used to live, or set a transfer to savings for the day after payday. Then leave it alone for a month and see what changes.
Yes. Knotd has the key ideas from Nudge in a few minutes, in plain words, plus a Name That Idea round to test them. It's one of 250+ non-fiction books in the app.
