Wednesday, September 21, 2011

Nudge by Richard Thaler and Cass Sunstein

In which we learn about how simple nudges could help us make better decisions.

Nudge is about how people make less than optimal choices, as determined by themselves or by other standards. We eat more than we know we should, work out and save less, yet it's hard for most of us to do what we know we should. Nudge is about how we (or in some cases some third party) can cause better choices to be made in simple ways.
 Nudge is supposed to be a reasonable important book in applied/popularized economics which is why I read it.  I found it to be a little too popularized or fuzzy.  It didn't really say much, but it said it tediously.  I didn't enjoy this book much partly because I found the logic flawed in some circumstances, partly because I think my mood/events at the time were clashing with it, and partly because I found it really boring.

The most significant issue I had with this book was the idea that once these "nudges" were pointed out by clever Mr. Thaler and Sunstein they would be widely adopted.  They ignore the obvious truth that for a lot of the cases in the book, it's not in the party who could implement the nudges interest to do so.  For example, a lot of attention in Nudge is given to workplace benefits.  Companies offer them, employees don't always bother to sign up.  Nudge discusses ways that companies could nudge employees to use more benefits without really mentioning that this would require the companies to spend more money.  Companies win when employees fail to utilize matching 401k contributions because they don't have to pay it!  In most of the examples of nudges *someone* should engage in, the incentives were absolutely not there for the nudger to do what Thaler and Sunstein said they should.

The other issue I had with this book was its insulting nature.  The reader is repeatedly and unflatteringly compared to Homer Simpson in terms of intellect and foresight.  It's pointed out repeatedly how you are less than perfectly rational.  Maybe I shouldn't have taken it so personally, but to have a book with other flaws tell me how dumb I am over and over is not appealing to me.

I would not recommend this book.  It wasn't the worst thing I have ever read, but it had few redeeming qualities (mainly interesting anecdotes) and notable flaws.  Insulting, boring and flawed is not an awesome combination.  Read Rock, Paper, Scissors or the Freakanomics books instead.

2/5 stars

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