Why Nudge?: The Politics of Libertarian Paternalism (The Storrs Lectures Series) Paperback – April 28, 2015

Gift recipient very pleased.

I love the term "Nudge" because it is a perfect way to describe the role a government can play in helping people make better decisions without limiting their freedom. This book makes a strong case for active nudging by laying out the reasons why people often make bad decisions and the instances where a gentle nudge would be helpful. A must read for those who like to debate the role of government in a modern society.

From the book description "Cass R. Sunstein combines legal theory with behavioral economics ..."Can "behavioral economics" be defined in any other way than a theory of people rationally preferring lower utility and therefore give money away? Classical economics states such people rationally do not exist.

This book offers a detailed review of the philosophy surrounding the use of nudges to get people to do things the person doing the nudging wants them to do. It is thought-provoking.

"Why Nudge" has a shaky foundation that, like some Hollywood movie, requires suspension of disbelief to proceed. Once you get over that hump, the book makes great sense. The hump is John Stuart Mill's Harm Principle, which says that if something doesn't harm anyone else, you should be left alone to deal with it as you please. If no harm occurs, government should not be regulating or managing it. But it is easy to show, particularly in this litigious, liability-obsessed society, that virtually any action in a highly varied population has repercussions that harm others, if only through the expenditure of taxpayer dollars. Every traffic jam costs money in lost productivity (travel time), maintenance and pollution. Any sort of law requires enforcement (detectives, prosecutors, offices, jails ...). If you water your lawn, there's less water available to drink. It is easy to rationalize pretty much any action as harming someone else. Far from a zero-sum game, harm spreads geometrically, like the proverbial butterfly batting its wings in Brazil, causing a typhoon in Japan. But since this entire lecture series is built on the premise that paternalistic nudging of behavior can direct actions away from harm, you kinda hafta go with it. Sunstein finally dismisses this concern half way through the book, because he must. Ironically, it is Sunstein's stated purpose to "cast doubt" on Mill's Harm Principle.His main concern is whether nudges are paternalistic. He categorizes paternalism in four neat boxes; it is either soft or hard, means or ends. They are self explanatory (well named) and really easy to visualize. The least objectionable road to success is soft and means, in which gentle nudges like ratings, warnings and data help people decide for themselves. The biggest problem is that people make the wrong decisions, often choosing against their own best interests. Giving them data makes a big difference. Even just the existence of surveys colors consumers' choices. Knowing that, a skillful nudge could improve a life.But characterizing nudges as paternalism is not so easy. Consider the French Bonus-Malus, a real life program Sunstein does not examine. If you bought a small car with good fuel economy, you got a bonus of hundreds of euros towards the purchase. If you bought a poor mileage vehicle, you paid an extra fee, up to 3000 euros. The theory was it would be zero-sum, ie. self financing. "Unfortunately" it was so successful at promoting smaller cleaner cars, it bankrupted itself. This was clearly nudged behavior. The question is, was it paternalistic? In a cohesive society, the question is meaningless.At some point, America changed. From the time of hunter-gatherer societies, paternalism had been sought after. People willingly agreed to it in exchange for some sort of protection, some sort of advantage. But today, Americans view government as the problem, not the solution. This makes nudging unnecessarily controversial. If the pendulum swings back, this whole argument goes away.That this one thin volume can elicit such thoughts is a good indication of its import. Nudges, while inherent and unavoidable in many cases, need to be recognized and better employed. Sunstein has furthered the discussion with intelligent analysis. In other words, he is nudging us to appreciate nudges.David Wineberg

Having read a number of books and articles on statistical insights into how humans really behave, as opposed to how they say they say they behave, this book covers a lot of familiar territory. I would say, that a problem with all of these data driven behavioral studies, trying to make big picture policy sense out of them is difficult.

The basic idea Sunstein offers here (as he did in many of his works together with Richard Thaler on Libertarian Paternalism) is that people make mistakes in their thinking and must therefore be protected from their own mistakes, while their freedom of choice is maintained. It seems an oxymoron. But it is not. It is a perfect way of implementing policies that are good for people, since those who actually made their research will neb to affected by the "nudge" and will very probably make the right choice and those who did not do a proper research will be "nudged" in a best possible way.Humans have the potential to make rational decisions, but are soon fooled by their own rationalizations and thus often make irrational choices.The definition of the rational decision-making: Making a rational choice means that the consequence of the choice is in this (or another) person’s best interest, therefore making a choice that leads to the best possible outcome.Due to the multitude of choices an adult has to make on a daily basis (a brief research showed around 35.000 per day), whether consciously or unconsciously, it is impossible for each of those decisions to actually be carefully thought out. This leads to a person feeling overwhelmed, and thus making many choices in a hurry, without any regards to the best possible outcome. What the policy of the nudge offers are easier, cheaper and barrier-free paths towards the best possible outcome and blockades, and additional expenses on the paths that do not lead to the best possible outcome.People can very easily be persuaded (e.g. marketing); they can be led to making decisions, regardless of the outcome. Therefore, it would be wise to create a certain choice architecture, making the decision-making process easier.Sunstein's writing style is very good, clear, fun and sarcastic in a way, maybe even arrogant, but not in a bad way. I do not regret the money I spent on a book, because it offers an interesting alternative on current established systems AND it is a fun reading. Until you realize, you make everything in a wrong way.

Excellent, highly recommend.

great

Amazing concepts!