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All 16 learnings · one per slide
Nudge
Richard H. Thaler and Cass R. Sunstein, in bytes
16 key learnings on how small changes in choice design can help people make better decisions.
16 learnings · ~40 sec eachSwipe →
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Nudge, in bytes
16 key learnings from Richard Thaler and Cass Sunstein's book on choice architecture and libertarian paternalism. Each takes about 40 seconds to read. Swipe, use the arrows, or your keyboard.
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Learning 1 · Part 1
Choice Architecture
The idea
How choices are presented influences what people choose, and someone always designs that presentation.
Example
Putting fruit at eye level in a school cafeteria increases fruit choices.
Takeaway
There's no neutral design.
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Learning 2 · Part 1
Humans, Not Econs
The idea
Economics often assumes perfectly rational 'Econs'. Real humans have limited attention, willpower and knowledge.
Example
People who mean to save but never get round to it.
Takeaway
Design policies for humans.
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Learning 3 · Part 1
Two Systems
The idea
An automatic system, fast and intuitive, and a reflective system, slow and deliberate, both drive choices.
Example
Grabbing a snack automatically versus planning a diet.
Takeaway
Nudges work with the automatic system.
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Learning 4 · Part 1
Anchors and Availability
The idea
People are swayed by starting numbers and by examples that come easily to mind.
Example
Asked to estimate Milwaukee's population, people anchored on Chicago guess high, those anchored on Green Bay guess low.
Takeaway
First numbers anchor judgments.
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Learning 5 · Part 1
Libertarian Paternalism
The idea
Nudge people towards better choices while leaving them free to choose otherwise.
Example
A healthy default meal with the option to pick something else.
Takeaway
Guide, don't force.
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Learning 6 · Part 1
The Power of Defaults
The idea
Many people stick with whatever option is pre-selected.
Example
Automatic enrolment in workplace retirement plans greatly increases participation.
Takeaway
Defaults are powerful nudges.
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Learning 7 · Part 1
Following the Herd
The idea
People follow what others do, especially when unsure.
Example
Telling taxpayers most people pay on time increased compliance.
Takeaway
Show people the positive norm.
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Learning 8 · Part 1
Expect Error
The idea
Good design anticipates mistakes.
Example
Car alerts for unfastened seatbelts, or petrol caps attached to the car.
Takeaway
Design for slip-ups.
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Learning 9 · Part 1
Give Feedback
The idea
Good choice design tells people when they're doing well or making mistakes.
Example
Displays showing real-time energy use help households use less.
Try this
Make progress visible.
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Learning 10 · Part 1
Mapping
The idea
Help people map choices to outcomes they care about.
Example
Turning camera megapixels into the largest print size you can make.
Takeaway
Translate options into meaning.
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Learning 11 · Part 1
Structure Complex Choices
The idea
When choices are complex, simplify and structure options.
Example
Sorting a long menu of investment funds into a few clear categories.
Takeaway
Structure reduces overwhelm.
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Learning 12 · Part 2
Save More Tomorrow
The idea
Thaler and Shlomo Benartzi's plan lets employees commit now to save more from future pay rises.
The evidence
In early trials, savings rates rose substantially over a few years.
Takeaway
Use inertia to help people save.
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Learning 13 · Part 3
Organ Donation
The idea
Countries where donation is the default tend to have much higher registration than those requiring opt-in.
Example
The authors favour 'prompted choice', asking people to decide when they get a licence.
Takeaway
Defaults can shape life-and-death outcomes.
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Learning 14 · Part 3
Health Plan Choices
The idea
They criticise overly complex health and prescription plans that confuse people.
Example
Choosing among dozens of plans with different rules.
Takeaway
Too many options can harm choice.
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Learning 15 · Conclusion
Nudges Can Be Abused
The idea
The authors propose a publicity principle: never adopt a nudge you couldn't defend in public.
Example
Hidden fees designed to exploit inattention fail this test.
Takeaway
Use nudges to help people, not exploit them.
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Learning 16 · Conclusion
Objections
The idea
They address critics who worry nudges are manipulative or a slippery slope.
Example
They argue some choice architecture is unavoidable, so it should be designed well.
Takeaway
Design responsibly, transparently.
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All 16 learnings complete
That’s all 16 learnings.
Every choice has an architecture. What default could you change to help people choose better?
Abhay Kumar JaiswalFCA · PMP® · Workday Financeabhayjaiswal.com
Summaries in my own words. Read the book for the full stories.
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Summaries are written in my own words for learning. Read Nudge by Richard H. Thaler and Cass R. Sunstein (2008) for the full stories. More Books in Bytes