10 Things I Learned from “Nudge” by Thaler and Sunstein

Nudge

Most weekends, my wife and I make it a point to write out a dinner menu, spend an hour shopping, and prep for some dinners in the upcoming week.

It’s not the way we’d prefer to spend Sunday morning. It doesn’t matter. We know that having the menu ready and the food in the house is going to massively increase the chances that we will enjoy a home-cooked dinner.

"Mmmmm, Burgers!" by m01229, Flickr, CC-By-2.0
Restaurant food is always ready to please! “Mmmmm, Burgers!” by m01229, Flickr, CC-By-2.0

The ever-present alternative is restaurant food. I love restaurant food! It’s cooked, it’s salty and fatty and delicious, it’s exactly what I wanted, and I can get it brought right to my front door!

Humans are busy. We have a lot going on in life. Our focus is constantly in demand. We frequently leave tasks half finished.

We’re also a bit lazy. Rarely are people motivated to add extra work to their hectic lives. If we can skip some effort, we will.


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In the 1970s, two psychologists described our attempts to minimize deep thinking. Daniel Kahneman and Amos Tversky named the automatic response System 1, and the deeper thinking avoid System 2.

When presented with a choice, people usually stick with the default option. “Good enough” is often just that — perhaps not the best choice, but probably not the worst choice either. We have other things to do. System 1 accepts the default.

Instead of continually eating restaurant food, we have a plan and a routine. Home-cooked meals are our default. We have everything we need at the ready. We’re nudging ourselves to eat healthier and cheaper than what restaurants can provide.

Defaults Matter, argue the authors of 2008’s Nudge: Improving Decisions about Health, Wealth, and Happiness.

Nudge

10 Things I Learned from Nudge

  1. Defaults matter, because people rarely change away from the default. Therefor, the Choice Architect (person) who is designing the interface needs to take care to ensure the default is sensible. The cost (effort) to change from that default should be as minimal as possible. Any friction lowers the likelihood of the end user making a choice that she wants, which may work against her own best interests (self-determination).
  2. Behavior is hard to change. Behavior A has Outcome A. If it even occurs to someone to try a new behavior (it usually does not), he doesn’t know the outcome. The unknown is scary. Inertia is strong and people will continue their with their known behavior, even if it’s not in their best interest. Inertia has little mental discomfort. This is the status quo bias.
  3. The authors of Nudge promote Libertarian Paternalism, where they seek to preserve liberty while still nudging people towards better decisions. The authors suggest taxing unwanted behavior, rather than mandating changes by law. A person still has the liberty to smoke tobacco, for example. However, the nudge of rising costs makes people think twice about spending their limited money on tobacco.
  4. Many of the automatic rules-of-thumb that Kahneman wrote about in Thinking, Fast and Slow are discussed in Nudge. These rules-of-thumb are known as heuristic biases. Anchoring is the concept that any number that you think of (or are given) will influence the final number you pick. Availability of an idea depends how easily you can think of examples of that idea. Of course, if we can easily think of examples, we tend to believe it’s a common occurrence. Representativeness describes how we tend to think two things are similar in one regard, they therefor must be similar in other regards.
  5. Humans are overly optimistic. I bet everyone reading this thinks they’re among the top 50% of drivers. Everyone has the best opinions. Everyone opening a new business or getting marries is optimistic about their future. This optimism leads to risk-taking. Designing systems to nudge people towards statistically less-risky behaviors can improve the outcomes of decisions.
  6. Framing is one powerful way to nudge people’s lazy System 1 brain. How we frame a choice determines what information is included when making the decision. Reframing a choice to include different information can lead to different outcomes. This is why I don’t believe in common sense — the frame is never the same.
  7. People are dynamically inconsistent. Their behavior in one moment may contradict what they want for themselves at another moment. You tell yourself you’re going to bed early, but when it’s time you find yourself poking at your phone. You fully plan to eat more salad at lunch, but find yourself ordering takeout with your coworkers. These planning moments are identified as being in a cold state, when you can think clearly about your goals and the needed steps. We are in a hot state when our best laid plans are ignored in favor of our immediate desires.
  8. By providing Information, using Peer Pressure, and by Priming people, we can increase their compliance to accept the default nudge. Information teaches us and can show us modeled behavior. Peer Pressure, aka social proof, makes it easy to accept the default behavior without standing out in a crowd. Priming people with thoughts, presented positively or negatively, puts an idea in their brain. All three of these methods help to show “how it’s done” as a default — which drives people’s behaviors.
  9. Incentives in decision making can sway people’s decisions. When architecting a choice, we should ask Who Uses? Who Chooses? Who Profits? and Who Pays? Good architecture helps direct people’s attention towards important incentives.
  10. NUDGES (kinda) stands for the topics to remember when creating a choice:
    iNcentives — who is paying for these choices, and who benefits?
    Understand mappings — comparison of options can be difficult. People benefit from information being presented with uniform ‘measurements’
    Defaults — remember, people rarely change away from a default choice
    Give feedback — help people understand why a choice may not work
    Expect error — we’re only human, don’t let mistakes wipe out progress
    Structure complex choices — walk people through their options or they’ll find ways to simplify that may not be in their best interest

Nudge is filled with examples of designing better choices to help people make beneficial decisions.

Think about the decisions you made, or the automatic decisions that you didn’t really make, throughout the last few days.

Can you see any way to nudge yourself into making better decisions?

Leave a comment on the blog. I’d love to read about your experiences.

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