Here are my takeaways from the book “Nudge” by Richard Thaler and Cass R. Sunstein!

  • “Libertarian paternalism”: freedom to choose is the best safeguard against bad choice architecture.
  • “Paternalism of means, not of ends”
    • “Paternalism of means”: having people’s interests at heart, and aiding them in accomplishing their goals.
    • “Paternalism of ends”: imposing “goals” on people
  • We should support people in making the best decision, as judged (in hindsight) by them.
    • Nudges counteract the fact that people do not typically act in their best interest (as judged by them).
      • Good choices are hard to come by, as they require experience (hence: wisdom of elders), good information (requiring targeted research) and quick feedback (to learn from one’s decisions).
    • Nudging people (in the direction they wish) is a way of loving them. General wishes just signify positive inclination towards strategies or action plans that would go towards them. Influencing others “for the better”, knowing what is good for them (× Wlad; × love; nurturing one’s growth)
  • No true preference. People’s decisions are predicated on the way the options are offered to them. There is no such thing as a “neutral” way of presenting things. “There is no such thing as a “neutral” design.” (× architecture) Architecture/design as the medium/framework/brain.
    • “Choice architecture” is the consequential task of designing the way options are presented.
      • Choice architecture is a lot of responsibility.
      • Choice architects are everywhere: bar managers, doctors offering treatments, merchandising.

Choice architecture

  • “Collaborative filtering” (e.g. movie recommendations based on similar users) can simplify choice.
  • Forcing people to make a choice might be counterproductive. “No decision” still offers an additional pathway to a ‘yes’ (e.g. if a person dies, asking the family’s consent for organ donation).
  • Budgeting is a model to simplify choices and reasoning. Mental accounting schemes (budgeting) (cf “gambling with the house’s money”) create mental constructs around money and how you view what you are spending (from).

Nudgebox

  • Make it automatic, make it the default. (Opt-out)
    • Though do let them know.
    • Defaults determine what people will be using and supporting.
      • Healthy defaults: e.g. installing a secure messaging app on one’s grandmother’s phone and telling her this is the only way to reach you
    • “Personalized defaults”
  • Use inertia. (Status quo bias) For example, subscription-based business models; trial periods; defaults; autoplay (YouTube, Netflix).
    • Combinable with increasing rates (escalating) (“automatic escalation”)
    • Small triggers can be enough to take one out of inertia (status quo bias), by directing one’s attention. (× drugs)
      • “Cues to pay attention”: “pattern interrupts” e.g. socially (× ELLL)
      • People are action-averse and will typically stick to past choices — which can work against them.
        • Herein lies the sneakiness and effectiveness of opt-out schemes.
  • To encourage a certain behaviour, make it easy. Make the action steps concrete. Make it fun.
    • “And if you dont’ know what fun is, then you are not having enough of it.”
      • ✝
  • And its counterpart: to discourage a behaviour, make it hard.
  • Use anchoring by example. For example, on a screen for tipping a clerk: “15% / 20% / 25% / Choose your own amount.”
    • Its counterpart: Careful the examples you give.
    • Illusion of the “middle” value.
    • Higher presets tend to raise the average, though also the rate of quitters (responding negatively to the aggressive defaults — “reactance”, refusing “out of principle” for having been bossed around)
    • “The more you ask for, the more you tend to get” (× negotiating)
  • Point out recent events (availability/recency bias) (e.g. disasters or illnesses/deaths for insurances)
  • Use loss aversion.
    • People are loss averse, hate losing things. (e.g. climate tax)
      • Synchronising pay raises with contribution increases is an example of working around that.
  • Frame differently. For example, “90% alive” vs “10% dead” (glass half-full…) ; “watchful waiting” vs “active surveillance”
    • Pose the question differently.
  • Leverage conformity. Point out common behaviour to influence using conformity (peer pressure; social influence). For example, “95% of guests return their glasses.” (× voting opinion polls)
    • The more local and, secondarily, specific (identity conscience), the more effective.
    • We pick up cues from our environment (on what is (seemingly) deemed best to do) (social influence)
    • We do not want to face the disapproval of others (peer pressure)
    • Leverage conformity with (imposed) self-image / Imposed self-confomity: “Are you ok? You’re never late!” (“Oh, that’s true, I’m the kind of person who’s never late…”)
  • Leverage identity conscience For example, the “Proud to be Texan” / “Don’t mess with Texas” anti-littering campaign
    • Combining identity conscience and social influence: “Montanans always wear masks”
  • Create clubs. Agree on measures to take together and on “in-group” privileges, in order to tackle problems that need global synchronized action (e.g. climate change).
  • Disclose others’ thoughts and opinions; provide a sharing platform for people, breeding grounds.
    • “Pluralistic ignorance”: not knowing what the rest of the population is thinking or feeling (though we would act differently if we did) (× All about love; “everybody struggling but nobody knowing that everybody else is also struggling — if people knew, they would support each other”; Sex talks; conspiracy of silence (The Design of Everyday Things); not knowing that the exact same person you’re talking to is facing the exact same problem as you) (× fall of Soviet communism as people realized other people also disapproved of the regime; #metoo; BLM)
  • Require and disclose information; enable self-regulation through transparency and publicity.
    • Require standardized disclosure of information (e.g. quantities of toxic waste, carbon emission) and make this information accessible openly (as a government). Let independent outlets point fingers at the bad actors and exert pressure on them through negative media exposure.
      • Transparency and the power of “bad publicity” naturally create a competitive environment for being “less polluting”.
        • Draw attention to the good actors as well.
      • Awareness, knowledge, transparency, changes the deal. (× Your Symphony of Selves)
    • Tracking also lets you subsequently regulate.
  • Integrate the desired action to the daily routine.
    • Every time is better than every nth time. Doing something every day is easier to remember than doing something every other day.

Beyond nudging

  • Do a raffle.
    • To fight tax evasion, the Chinese government set up a lottery system for consumers based on receipt tickets from shops; as a strategy to encourage clients to ask for the receipts; and for the transaction to have thereby been recorded.
    • Offer one big lottery prize rather than many small rewards: lotteries are more attractive than a meagre reward as incentive for an action.
  • Financially support the behaviour you want to encourage (economic incentives).
  • Discourage unwanted behaviour (tax)
    • Tax has the added benefit of bringing in more money to the government, who can spend it to further the cause.
    • Offset it to not make people worse off. Remember the well-being of people and e.g. combine with unrelated subsidies to prevent financial hardship on poor people. (× synchronizing pay raises)
  • Outlaw unwanted behaviour (mandates). For example, with codes for new buildings.

Policy making

  • “The evaluation of any rule must include all the costs and benefits that the rule creates” (extra overhead; extra time needed; impact on morale; needed extra information to collect; implementation cost)
    • Some companies benefit from unnecessary paperwork (“disabling bureaucracy”, The Toyota Way) (tax advisors/accountants, toll booth collectors, etc.), thereby lobbying against simplifying and streamlining (× luddites). People who profit from a bad system; (who have evolved to find a competitive advantage in their own unique environment; × camels)
      • Advisers (hired to help with decision-making) can have conflicts of interest, thereby neutralizing their neutrality.
    • Once the measure in effect, measure its effects; and adjust as needed (“restarts”) (× OKRs, Measure What Matters: have a goal!)
  • Go through an “impact analysis checklist” before finalizing a regulation (× Measure What Matters: make sure the measure is aligned with high-level goals, is quantifiable and directly benefits the end user)
  • “Smart disclosure”: “the timely release of complex information and data in a standardized, machine-readable format.” — such that platforms (“choice engines”) can also make use of it and aid consumers.
    • Simplify by standardizing measures: standardized units help make comparison easier (and simpler) and can be enforced by the government.
      • Trade involved standardizing over time the measurement of both quantity and quality.
    • Smart disclosure as a countermeasure to fine print — it’s not just about giving the information, it’s about presenting it in a way that is easy to comprehend (otherwise it’s bad policy). (× Signal-to-noise ratio; too much feedback, The Design of Everyday Things)
  • A (discouraged) default among very many options can still get the biggest market share, even if unpopular (× democracy and voting)
  • Simplify/Minimalism: More stuff to control means a less thorough control. Instead, minimize and manage well.
  • Patients should not have to pay for their medication (US); some skimp on them and die.
  • Nudge, and boost (educate) as well! The two are not incompatible.

Errors

Manipulation

  • Manipulative business techniques:
    • Partitioned pricing (dividing a price into its components without presenting the total)
    • Drip pricing (advertising only part of the price up front and waiting until check-out to reveal the final price (*cough* trainline *cough*)).
    • “Foot in the door”/”Shrouded attributes” pricing (cheap base product and expensive refills) (printer & ink; phone & phone operator subscription; razor & razor blade)
  • Capitalism / free-market tends not to favour the most honest (but the most manipulative, who can sell most using human biases.) Competition without regulated advertising is not in favour of the consumer.
  • Lack of incentives (hence law): nobody gains at convincing people not to buy the peddler’s snake oil. Whistleblowing is not lucrative; there is an economic lack of incentive for Good Samaritans in a free market / competitive society.
    • Reward whistleblowers, subsidize associations!

Economics

  • Pension tax synergy: retired people being paid by contributions from workers; and the workers, once retired, being paid by the contributions of the new workers. Except shit hits the fan when things become out of balance (longer lives; fewer children)
  • Small changes multiplied very many times amount to a lot (× pièces jaunes)

Life advice / serendipity

  • Explore, lest you not realize there are better alternatives: “We usually get feedback only on the options we select, not the ones we reject.”
    • “Omakase”: Letting oneself be guided and surprised by letting somebody else make a choice for us (that we would otherwise not consider)
      • (Drugs; leaps, adventures)
  • It is difficult to know until you try. (× 30-day money-back guarantee; Vinted; multiplying experiences)
  • “We have learned a lot from our critics and this book is better because of their questions and doubts.” (× Life)
  • “The ability to control one’s own destiny comes with the responsibility to make good choices.”
  • “Enjoy life now, this is not a rehearsal!”

Other

  • GPSs constantly give you the best advice from where you are now, never reproaching you for having taken a wrong turn (the best coach!) (Action-oriented, × Psycho-Cybernetics)
  • Consumer credit in installments: sellers would retain ownership of the goods as collateral.
  • The introduction of credit cards akin to the introduction of pathogens (and alcohol) in the New World (A Splendid Exchange)
  • Cf 2015 Paris Agreement: a juncture in life where you make a decision for the coming period.