If you are unaware, Nudge is about, as the back cover says, "Choices-how we make them and how we're led to make better ones." It addresses common problems, such as savings rates for retirement, making better health decisions, reducing environmental impacts and a few other things where choices could be made better. They talk early on about nudges come from what they call "Libertarian Paternalism" and "....Influencing Choices in a way that will make the choosers better off, by their own judging." In other words, they want to make it easier for people to make better choices.
Some interesting points made in the book:
- No matter how much we believe otherwise, we are all "Sheeple" (my words, not theirs) and are prone to being influenced by other people or outside factors, even if unconsciously.
- Because we do crave approval from others or want to do what others are doing , if people are doing something that is good/better than others, it is best not to tell them so. A line from the book that I liked on this subject was: "If you want to nudge people into socially desirable behavior, do not, by any means, let them know that their current actions are better than the social norm." An example they give on this, is people in a certain city/neighborhood being given information on their energy use in comparison to their neighbors', and those that were told their use was lower than the average use, their consumption went up but those who were told that their use was higher than average brought theirs down. But when given either a smiley face or frownie face for good/bad usage, those with good usage didn't tend to change to a higher consumption. So, overall, don't tell people if they are doing better than average or normal.
- For Increasing people's retirement savings rates, they propose employers have automatic enrollment into retirement plans for employees, with an opt-out option instead of the current opt-in that most employers have currently. The authors also talk about an idea, "Save More Tomorrow", which automatically increases the contribution account at a set time frame (e.g every 6 months). I think this is a great idea, and if implemented by more companies (some already do), it could really help reduce the crises of people not being prepared for retirement and not having enough from social security.
- Speaking of Social Security, the authors talk about how Sweden had semi-privatized Social Security by setting aside part of the fund into investment accounts for individuals and allow them to select the investments or to use the default fund that was selected by experts. I think this idea is really interesting. People have to pay social security tax anyway, so to have a chance to have a say in how it is accumulates/grows is quite a concept. I would really be interested in learning more about this...
- One other Nudge that I found interesting was, in relation to increasing organ donorship, the authors talk about a mandated choice program (being required to choose whether your answer is yes or no), and mentions how Illinois has a similar program in place already where when at the DMV you have to select if you are a donor or not before the license can be renewed/etc. If you say yes, they will advise you that family cannot override this and if you would like to reconsider. I find this to be an interesting concept because it helps for the greater good (more organ donations) without intruding on people's right to decline to be a donor, and makes it convenient--which is the entire point of a NUDGE.