Casey Thaler Popular Books

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Nudge: Improving Decisions about Health, Wealth, and Happiness is a book written by University of Chicago economist and Nobel Laureate Richard H. Thaler and Harvard Law School Professor Cass R. Sunstein, first published in 2008. In 2021, a revised edition was released, subtitled The Final Edition. The book draws on research in psychology and behavioral economics to defend libertarian paternalism and active engineering of choice architecture. The book also popularized the concept of nudge theory. A nudge, according to Thaler and Sunstein is any form of choice architecture that alters people's behaviour in a predictable way without restricting options or significantly changing their economic incentives. To count as a mere nudge, the intervention must require minimal intervention and must be cheap. The book received largely positive reviews. The Guardian described it as "never intimidating, always amusing and elucidating: a jolly economic romp but with serious lessons within." It was named one of the best books of 2008 by The Economist. Summary Human behavior One of the main justifications for Thaler's and Sunstein's endorsement of libertarian paternalism in Nudge draws on facts of human nature and psychology. The book is critical of the homo economicus view of human beings "that each of us thinks and chooses unfailingly well, and thus fits within the textbook picture of human beings offered by economists." They cite many examples of research which raise "serious questions about the rationality of many judgments and decisions that people make". They state that, unlike members of homo economicus, members of the species homo sapiens make predictable mistakes because of their use of heuristics, fallacies, and because of the way they are influenced by their social interactions. Two systems of thinking The book describes two systems that characterize human thinking, which Sunstein and Thaler refer to as the "Reflective System" and the "Automatic System". These two systems are more thoroughly defined in Daniel Kahneman's book Thinking, Fast and Slow. The Automatic System is "rapid and is or feels instinctive, and it does not involve what we usually associate with the word thinking". Instances of the Automatic System at work include smiling upon seeing a puppy, getting nervous while experiencing air turbulence, and ducking when a ball is thrown at you. The Reflective System is deliberate and self-conscious. It is the one at work when people decide which college to attend, where to go on trips, and (under most circumstances) whether or not to get married. Fallacies and biases Because of these differences and conflicts between these systems, people are often subject to making mistakes that are the result of widely occurring biases, heuristics, and fallacies. These include: Libertarian paternalism Libertarian paternalism (also called soft paternalism) is the union of two political notions commonly viewed as being at odds: libertarianism and paternalism. Sunstein and Thaler state that "the libertarian aspect of our strategies lies in the straightforward insistence that, in general, people should be free to do what they like-and to opt out of undesirable arrangements if they want to do so". The paternalistic portion of the term "lies in the claim that it is legitimate for choice architects to try to influence people's behavior in order to make their lives longer, healthier, and better". Choice architecture describes the way in which decisions are influenced by how the choices are presented. People can be "nudged" by arranging the choice architecture in a certain way without taking away the individual's freedom of choice. A simple example of a nudge would be placing healthy foods in a school cafeteria at eye level while putting less-healthy junk food in harder-to-reach places. Individuals are not actually prevented from eating whatever they want, but arranging the food choices that way causes people to eat less junk food and more healthy food. Policy recommendations Sunstein and Thaler apply the idea of nudges in the context of choice architecture to propose policy recommendations in the spirit of libertarian paternalism. They have recommendations in the areas of finance, health, the environment, schools, and marriage. They believe these problems can at least be partially addressed by improving the choice architecture. Retirement saving Thaler and Sunstein point out that many Americans are not saving enough for retirement. They state that "in 2005 the personal savings rate for Americans was negative for the first time since 1932 and 1933 – the Great Depression years". One change they offer is creating better default plans for employees. Employees would be able to adopt any plan they like, but, if no action is taken, they would automatically be enrolled in an expertly designed program [such as social security]. They also propose what they refer to as the "Save More Tomorrow" plan. This is to address the issue of people having the desire to save more, yet procrastinating on actually doing so. This program would invite "participants to commit themselves, in advance, to a series of contribution increases timed to coincide with pay raises". Health care The book contains an analysis of the Bush administration program Medicare Part D. Thaler and Sunstein state that "on some dimensions, Bush was on the right track" with the plan, but that, "as a piece of choice architecture...it suffered from a cumbersome design that impeded good decision making". Specifically, they think that default choices for programs should not have been random and that beneficiaries of the program were not given adequate resources to deal with the number of choices they were faced with. They think that seniors who did not sign up for a program should have one assigned to them, and that, yearly, they should be mailed an itemized list of all drugs they had used and all of the fees they incurred. This information would be freely available online so beneficiaries could easily compare their programs with other similar ones. Sunstein and Thaler also propose a way to increase organ donation rates in the United States. They argue that a mandated choice program should be put in place, where, in order for someone to renew their driver's license, they must say whether or not they would like to be an organ donor. They also advocate the creation of websites which would suggest that the wider community supports organ donation in order to nudge people into becoming organ donors themselves. Origins Thaler came up with the term "libertarian paternalism" in a discussion with Casey B. Mulligan and then continued to discuss the term during a weekly lunch with Cass Sunstein. In 2003, Thaler and Sunstein cowrote articles on the topic for the American Economic Review and the University of Chicago Law Review. Thaler's name appears first because the book is based mostly on his research, and the authors decided that every chapter wou.... Discover the Casey Thaler popular books. Find the top 100 most popular Casey Thaler books.