The nudge final edition was very insightful and fun to read. I remember the time, more than 10 years ago, when behaviour economics got popular. I was very impressed and fascinated by the ideas. But for the nudge, I had not read by now and I regret it now. I believe this book is the result of accumulated knowledge of the field. I felt I am lucky to read the book. I have used the ideas in the book by myself but I should have known better. I could have done much better to architect my choice. I can’t digest all the ideas in this book all at once so I will read this book again. I leave some notes here to remember.
There are a lot of chances we can use nudge ourselves, an example in the introduction is the school cafeteria. The school could make more money by architecting students’ choices better however should the should maximize the profit even by making students less healthy? We could choose to nudge the student to make them more healthy by organizing how to get the foods properly, by architecting their choices.
There are several ideas I have learnt this time,
Loss aversion (1: Biases and Blunders): We like profit but we hate loss. There is an asymmetry here. We are happy when our stocks go up but we panicked when the stocks go down. I knew it but the book tells us that loss aversion can be used as a nudge. So if you want to discourage the use of plastic bags, should you give people a small amount of money for bringing their own reusable bag, or should you ask them to pay the same small amount of money for a plastic bag? Yes, the latter works!
The single most common mistake (4: When do we need a nudge): We are a choice architect. We are trying to decide how to design the choice environment, what kind of nudge is to offer and how subtle the nudge should be. What do we need to know is the best possible choice environment. However, perhaps, the single most common mistake any of us make is just forgetting something, as if this is a self-control problem. This is a great reminder of reminding people. People just sometimes forget it is OK for us just remind them to make sure they remember. I sometimes need to remind my collaborators to submit proposals to us before the deadline, maybe a week before the deadline! Since I am the one who cares most about the number of proposals to be submitted, reminding my users to submit for us can be a good nudge. People would just say “Oh, thanks for reminding me, I was gonna submit”
Omakase (4: When do we need a nudge): At a sushi bar, a tradition is to let a chef decides what you eat. Just ask for Omakase. You might get what you have never thought and you will eat well. It is particularly hard for people to make a decision when they have trouble translating the choice they face into the experience they will have. So making decisions is a hard job, even choosing music, so streaming music services got so popular. We don’t need to choose what music we should listen to.
#Sludge (8: #Sludge): Learning sludge is also an important thing. Many organizations appear to make this asymmetry between the ease of joining and the pain of leaving an important part of their business model. In the U.S., gyms and cable companies are notorious practitioners of this strategy. Some gyms required members to come to the gym in person if they wanted to cancel their membership that is a sludge. If the business subscription is easy to get by clicking a button but to cancel it you need to make a phone call and submit the signed document, that is a sludge. So we should be aware of them.
From Chapter 9 -12, the book is talking about money. Chapter 9, how to save money better for later in our lives, such as pensions. Let’s make savings automated, so you don’t need to think about it. Chapter 10, how do we build up a portfolio? People often chose a default fund provided and stick to like forever. Chapter 11 is about borrowing money like credit cards and mortgages. Chapter 12 is about insurance. The money is important for us, however I can imagine how much we avoid thinking seriously about these things. I have to nudge myself to make decisions better, I have learnt so much from each chapter.
Chapters 13 and 14 are talking about social problems. Chapter 13 is about organ donation. It is a difficult decision how society or country currently architect people’s choices about organ donations. Chapter 14 is about climate change, everyone has the same goal but it is not easy to reach. “If the goal is to make the environment cleaner, a simple idea is to make the green option the easy option. And if the goal is to make it really easy, make it automatic”. These two chapters are difficult problems to solve. By examining these problems seriously, we can find what we value.
Chapter 15, I believe the authors are trying to explain where, when and how the nudge can help us. That chapter was for showing their standpoint about the nudge by answering critiques they have gotten since the first edition of the nudge was published. I like this chapter because the authors explain what the nudge is and their philosophy on the nudge. There is someplace where mandates, bans, taxes, economic incentives make a lot of sense. However, while we keep our freedom of choice, a well-designed choice architect can achieve a lot.
I have learnt a lot by reading this book. Even I read this book a week ago, there are some ideas I keep thinking about. I want to make a better decision so I will keep coming back to this book to see what I can do.