Nudge: Improving Decisions About Health, Wealth and Happiness

Nudge:  Improving Decisions About Health, Wealth and Happiness

A new book from Chicago GSB professor uncovers the subtle power of ‘nudging’
 
 
Humans are notoriously prone to making mistakes. In their new book, Richard Thaler of the University of Chicago Graduate School of Business, and co-author Cass Sunstein, explain that being human, we are all susceptible to various biases that can lead us to blunder. The authors show that by knowing how people think, we can design choice environments that make it easier for people to choose what is best for themselves, their families, and their society.
Thaler and Sunstein’s cutting-edge research on human fallibility outlines a new world that recognizes human nature for what it is, while also making wise choices easier and more likely.
 
The research, presented in an enlightening, fascinating and often funny way, extends to not only choosing the healthiest meal option or the best mobile phone plan, but to rather more serious decisions like choosing how to save for retirement, or, more pertinently in the current economic climate, how to choose the right mortgage.
 
 “Choice architecture,” as the authors call it, can be established to nudge us in beneficial directions without restricting freedom of choice.
 
The agents of change in Thaler and Sunstein’s world are what they call “choice architects.”  Anyone who influences how other people’s choices are arranged, presented, or described is a choice architect.  The director of a school cafeteria is a choice architect because, by placing the fruit in a more prominent location, she can increase the ratio of apples to chocolate bars consumed. The world is full of choice architects, including parents, religious leaders, credit card companies, bankers, teachers, pharmacists, mortgage brokers, doctors and nurses, and public officials. Choice architects can influence choices without removing options.  In so doing, they nudge—for good or for bad. And by properly deploying these nudges, the authors claim, we can augment our ability to improve people’s lives and solve many of society’s major problems.
 
 
About the authors
Considered a pioneer in the field of behavioural economics, Richard H. Thaler is the Ralph and Dorothy Keller Distinguished Service Professor of Economics and Behavioural Science at the University of Chicago Graduate School of Business. Born in New Jersey in 1945, Thaler first gained attention between 1987 and 1990 with a regular column, "Anomalies,” published in the Journal of Economic Perspectives. In this column he wrote of individual instances in which economic behavior seemed to violate traditional microeconomic theory. Thaler has since written a number of books intended for the lay reader on the subject of behavioral finance, including Quasi-rational Economics and The Winner's Curse.
 
Cass Sunstein, who graduated in 1975 from Harvard College and in 1978 from Harvard Law School magna cum laude, is a member of the Department of Political Science as well as the University of Chicago Law School. He is author of many articles and a number of books, including Behavioural Law and Economics, Designing Democracy: What Constitutions Do, Risk and Reason, The Cost-Benefit State, Punitive Damages: How Juries Decide, Why Societies Need Dissent and Laws of Fear: Beyond the Precautionary Principle.
 
Both co-authors have acted as informal advisers to Barack Obama’s presidential campaign.
 
 
Publication date: June 12, 2008 by Yale University Press, £18.
 
Further information and press copies of Nudge are available on request (in English only), as are interviews with Richard Thaler.
 
Richard Thaler will present a seminar at the Chicago GSB campus in London on July 9, as part of the school’s Global Leadership Series.