Nudge, by Robert Thaler – Book Review

Nudge: Improving Decisions About Health, Wealth and Happiness, is a global bestseller by Professor of Economics and Behavioural Science at the University of Chicago’s Graduate School of Business, Robert Thaler. It is described as one of the most influential books of the 21st century, putting forward an argument about human behaviour that has big implications for how we can optimally live our lives. Below, we explore his thesis and what it means for you.

Thaler’s book is, in essence, a defence of a set of ideas called “libertarian paternalism”. This claims that private and public institutions influence how people behave whilst allowing them the freedom to make their own decisions. More specifically, Thaler advocates “nudge theory” – which proposes that compliance can be achieved apart from education, legislation or enforcement. Rather, a “nudge” on human behaviour must be easy and cheap to avoid.

“Putting fruit at eye level counts as a nudge. Banning junk food does not.”

All of this is to lay the groundwork for one of Thaler’s central arguments – i.e. people tend to take the path of least resistance when making their decisions. Therefore, if “lazy” individuals are to avoid making poor choices, they need “nudges” to help them make more beneficial ones. This insight runs against the traditional understanding of economics, which argues that humans tend to make “rational choices” when left to themselves. Rather biases, busyness, and other obstacles (such as “choice paralysis”) can inhibit our abilities to effectively make up our minds.

The great news is that we are not all destined to fall victim to external constraints on our rational minds. We can set up our own “nudges” to help us make productive decisions which enhance our wellbeing. In other words, we can be our own “choice architects” to help us craft better environments for our decisions. Immediate feedback is a good example.

Immediate feedback can be illustrated like this. Suppose you take a picture of something with your smartphone. Immediately, your device can show you the image – giving you an idea of its suitability and where improvements may be needed. Similarly, individuals can create their own immediate feedback systems to nudge them towards better choices. This could be applied to exercise, for instance. It is difficult for us to see the benefits of exercise immediately. Muscle growth and fat loss take time. Yet an individual could create a system of continual “nudges” to keep them committed to their training (e.g. “gamifying” their regime with a fun fitness app).

Overall, Thaler’s book is a fascinating insight into human behaviour and psychology which can help empower readers to take control of their decisions. Whilst the language can be technical, there is plenty of humour and helpful anecdotes to keep you engaged. We commend this book to you!