Book Review: Nudge - by Richard Thaler and Cass Sunstein


How to influence people’s behavior for their own benefit, without forbidding anything or making big changes to economic incentives. It’s OK to try to influence people to make their lives healthier, better etc.


  • Companies & governments can influence people’s choices in directions that will improve their choices to help the choosers, as judged by themselves.
  • Individuals make pretty bad decisions, but would not do so if they paid attention, full information, rational brains and self-control.
  • A “nudge” is something which alters people’s behavior in a predictable way.
  • Availability heuristic: People assesss risk probaility by how easily examples come to mind. Biased assessments of risk can perversely influence how we prepare for crises, politics etc. Governments allocate resources to fit people’s fears rather than rational response to the most likely dangers.
  • The “hot-cold empathy gap.” We don’t realise how much our behaviour alters in hot state.
  • Parents should worry less about which college their kids go to and more about their roommates.
  • Collective Conservatism: groups stick to established patterns. Once a practice has become established, it is likely to be perpetuated, even if there is no basis for it. Many social practices persist for this reason, and a nudge, can stop them.
  • People paying less attention to you than you think. People do think that everyone is looking at on them and conform to what they think people expect.
  • When people are asked what they intend to do, they are more likely to act in accordance with their answers.
  • People need nudges for decisions that are difficult and rare, or where they dont get quick feedback, or when they don’t understand all of the situation.
  • Self-control issues are most likely to arise when choices and their consequences are separated in time.
  • If consumers have an irrational belief, companies may have more incentive to cater to it than to eradicate it.