| 
 enlarge | Authors: Richard H. Thaler, Cass R. Sunstein
Publisher: Yale University Press
Category: Book
List Price: $26.00
Buy New: $16.29
You Save: $9.71 (37%)
New (30) from $16.29
Avg. Customer Rating:  40 reviews
Sales Rank: 259
Media: Hardcover
Number Of Items: 1
Pages: 304
Shipping Weight (lbs): 1.3
Dimensions (in): 9.3 x 6.2 x 1.1
ISBN: 0300122233
Dewey Decimal Number: 330.019
EAN: 9780300122237
ASIN: 0300122233
Publication Date: April 8, 2008
Availability: Usually ships in 1-2 business days
Condition: Brand New, Perfect Condition, Please allow 4-14 business days for delivery. 100% Money Back Guarantee, Over 1,000,000 customers served.
|
| Customer Reviews:
 Interesting Book June 18, 2008
2 out of 4 found this review helpful
I found this book to provide an interesting perspective into human behavior. The authors make a good case for Libertarian Paternalism. The book is well written and accessible to a wide audience.
Enjoyable June 12, 2008
0 out of 4 found this review helpful
I liked the book. It was interesting and well written...not extremely addicting, but enjoyable.
 A hollow and anti-democratic worldview June 7, 2008
38 out of 47 found this review helpful
My dictionary tells me that "nudge," which rhymes with "judge" and means a gentle push, is probably of Norwegian origin. The authors are careful to distinguish this from the Yiddishism "noodge," meaning pest or bore (@4). So maybe a bakkel, which is what they call doughnuts in Norway, would be a more appropriate analogy for this book than a bagel. But either way, the book is missing something at its core. And it is not as much of a departure from the Chicago School worldview as some reviews would have you believe.
1.Richard Thaler (RT) and Cass Sunstein (CS) base their recommendations on the experimental studies of A. Tversky, D. Kahneman and, among others, RT himself. As developed during the past three decades or so, these have led to the field of "behavioral economics" (and a Nobel Prize for Kahneman). The gist is that people have certain "irrational" ways of looking at the world that lead them to act differently from the way most economists assume for their convenience of their theories. By "nudge" they mean a design element in a thing or in a process that anticipates these psychological tendencies, and steers people toward behavior that, ideally, helps them without limiting their freedom.
Many of the principles and techniques they describe (which other reviewers on this page summarize) have been known and exploited for far longer than there were fancy names for them. Retailers have set at prices $9.98 rather than $10.00 since time immemorial, relying on "availability". The wisdom of writing contracts and designing business processes with "idiot-proof" procedures (the term I was taught decades ago, in lieu of "nudge") is similarly ancient, at least within better law firms and companies. So RTCS's notion that nudges could be used more often when designing social policy shouldn't be very controversial. And on their face, many of their analyses make sense.
2.RTCS do skate on thin ice near the end, when they make it explicit that they're relying on "the invisible hand" of markets to make their proposals work (e.g., @239-240) - a hand whose existence, or at least invisibility, is controversial. They're also on shaky ground when they suggest that John Rawls's "publicity principle" should be a constraint on nudges "in both the public and private sectors" (@244-245). This principle states that governments shouldn't select policies that they wouldn't be willing or able to defend publicly to their own citizens. RTCS don't spell out, though, the scope of this principle in the private sector. Should the analogue of "citizen" be shareholder, or indeed all citizens? If the latter, what's the source of this duty? If to shareholders only, where does that leave the rest of us?
3.But those are details. The deeper problem is what's missing from the big picture of this book. Namely: society.
"There is no such thing as society. There are individual men and women, and there are families." So said Margaret Thatcher, and though RTCS don't quote her, they seem to share this view. Everything in this book is focused on decisions made by individuals (called "Humans" by RTCS) for their own good or ill, and based on their own preferences. The only other entity is a "Planner", such as a legislature, bureaucracy, judiciary or corporate management. Its relationship to individuals is top-down. Moreover, the Planner's own psychological quirks are rarely discussed. In effect, the "homo economicus"-type of rationality that behavioral economics denies to Humans is shifted up one level to the Planner.
The idea that people might act together to influence the Planner, select the Planner, communicate their will to the Planner, or rebel against the Planner is totally missing from this book (aside from a passing reference in a footnote (@238). This is very much in line with Robert Reich's observation in "Supercapitalism" (2007) that collective action and debate in American democracy has been replaced by an atomistic consumerism affecting all aspects of life, including politics.
The worldview expressed in "Nudge" is a far cry from the idea of "active liberty" described by Supreme Court Justice Stephen Breyer in his book of that name (2005). Democratic participation in lawmaking is central to Breyer's view, and policy decisions should be based on facilitating that participation. OTOH, in their footnote, RTCS make the conjunction of good laws and popular will sound like an occasional happy accident: "Social practices, and the laws that reflect them, often persist not because they are wise but because Humans, often suffering from self-control problems, are simply following other Humans. ... We do not mean here to question the view that laws that really do embody the judgments of many people often deserve support for that reason" (@238n). Of course one can think of examples where what RTCS say here is right; slavery, for example. But many other cases are less clear-cut (not that RTCS even express any opinion on the slavery issue or the "wisdom" of any other human rights). This footnote embodies the entire discussion of democracy you'll find in this book. RTCS don't even specify who those "many people" might be -- "Planners" perhaps?
4.A corollary of RTCS's ignoring society is that they have no sensitivity to culture (notwithstanding numerous references to TV shows). This is most obvious in their chapters on organ donations (Ch. 11) and marriage (Ch. 15). The idea of a market for the purchase and sale of human organs "has obvious merit, [but] it is also spectacularly unpopular for reasons that are not well understood" (@175). Maybe the reason is that peoples' cultural beliefs lead them to find the idea of such a market repugnant?
Or how about RTCS's proposal that the institution of marriage be left to private religious groups, with government providing only the institution of civil union - for everyone. They don't consider the idea that a nation's laws should express the cultural values of its people. Nor do they consider whether civil unions would be accepted without stigma in society - or even within families. Since many inter-faith marriages wouldn't be recognized under the laws of any specific religion, do RTCS expect people to shop around for a more convenient religion, or give up religion altogether? Maybe someday people will come around to RTCS's ultra-rational view (which may also be tinted by the apparently divorced status of at least one of them), but we're a long way from it. They need to deal with that.
One more thing about culture: RTCS assert that Tversy & Kahneman-type psychological tendencies arise from brain function (@19), and throughout the book they use the word "Human" to describe people who display those tendencies. I'm not an expert in this area of research, but it isn't clear how much of it has relied on subjects from non-Western cultures. Previous multi-cultural studies in behavioral economics, such as "Foundations of Human Sociality" edited by J. Heinrich & al. (2004), show considerable variation across cultures. So the details of "choice architecture" may be far more culturally-specific, and less scientifically grounded, than RTCS acknowledge. Certainly the book's point of departure, how to engineer behavior on the basis of individual preferences to behaviors, is very American. It would be quite alien to many books on social policy from France, Germany or Japan, for example. BTW playing this scientistic rhetorical trump card in matters of policy is a hallmark of the Chicago School. See, e.g., James Hackney Jr.'s "Under Cover of Science" (2007), which, despite not being enitrely convincing about the historical reasons for this rhetorical trope, is entirely correct in identifying it.
5.CS was close with the Clinton Administration, and an early supporter of Obama. He's probably on the short list for a Federal judgeship - even to fill a Supreme Court vacancy - next time the Democrats take the White House. Before reading this book, I'd have welcomed such an appointment. Now, I'd be much more cautious to do so. America is a society in addition to being a group of individuals. And that society is the source of any "Planner's" authority. I hesitate to give such authority to anyone who forgets where it comes from, and forgets the values that underlie it. Unfortunately, that is exactly what the authors of "Nudge" appear to have forgotten.
A Triumph for Behavioral Economics May 29, 2008
5 out of 7 found this review helpful
Richard Thaler, an economist at the University of Chicago School of Business, is one of the founders of modern behavioral economics, along with economists Amos Tversky and Daniel Kahneman. Cass Sunstein is a legal scholar and political science professor at the University of Chicago, and has been at the forefront of applying the results of experimental economics to social problems, especially in the field of law.
This book has one Big Idea, and it is a very important one. The idea is called "status quo bias," meaning that in many choice situations, people value the status quo (what they currently have), and will forgo the opportunity to switch to an alternative unless the alternative is significantly more attractive than the status quo. In situations where it is difficult to evaluate the exact benefits and costs of what one has over what one could only obtain with some conscious effort, people will tend to stick with what they have.
For example, in the United States, the default condition with respect to organ donation is "no donation," so if people want to donate their organs upon death, they must explicitly state this preference. In France, the default condition is "donation," and an individual who does not like this default condition must expressly indicate a desire not to donate. Consequently, the rate of organ donation is France is several times higher than it is in the United states.
The idea behind Nudge is that the choice of a default condition can both allow individuals to choose as they please in a democratic, market society, while at the same time improving social outcomes by providing default conditions that lead to socially useful choices. Thaler and Sunstein call this "libertarian paternalism." While one might think that this minimal sort of market intervention can have only a limited impact on social outcomes, the organ donation example suggests otherwise. Perhaps the most important policy of this type would be a mandate that employers make contributions to retirement savings, in the form of 401(k) and other plans be the default, so that individuals who do not wish to save would have to register the desire to opt out of the plans. A related ideas developed in the book is that employees commit to saving a certain fraction of future raises they are awarded by employers, the idea being that it people do not want to reduce their "status quo" income in order to save, but they may be willing to accept a lower new "status quo" when the status quo changes. This is a very sensible idea.
A second sort of libertarian paternalism takes the form of having the government require firms reveal with clarity and salience the full terms of contractual agreement with consumers. For instance, the nutritional content of restaurant food might be required on the menu, or the precise interest rate on a mortgage might be required to be posted, or all the charges of a broker might be required to be itemized on a monthly statement. These measures are "paternalistic," because if consumers were fully aware of the situation, they might demand this information from firms, and market competition would then lead to compliance. The role of the government in this situation would then be the more traditional one of enforcing "truth in advertizing"---firms are not allowed to misrepresent their offerings.
Libertarian paternalism, of course, is not a panacea, and will not replace the price system as the central mechanism for allocating goods and services, and will not obviate the need for legislation that corrects market failures, such as the tendency for excessive energy use to undermine the natural environment, and perhaps even partially offsets such "human frailties" as the tendency towards undersaving and abusing illegal substances. However, libertarian paternalism is attractive as a first line of attack on even these problems, and should be part of the policy-maker's toolkit.
Something new under the sun... May 27, 2008
12 out of 13 found this review helpful
Thaler and Sunstein pulled off something fairly rare and valuable in this book; they offered up a social/political idea that isn't currently being offered up by either the Republicans or the Democrats, but is still politically viable for either party. That's a good thing, because it can be easy to forget that the Democrats and Republicans aren't the only sources of political, social and economic ideas out there.
The authors label themselves as Libertarian Paternalists, two terms that would not normally go together. Libertarians tend to want very small government with a high degree of freedom for citizens, while paternalists tend to think the government should show citizens the right way to do things even at the expense of their freedoms.
Thaler and Sunstein marry the two ideas, saying that governments should not limit peoples' options, but should offer guidance in certain decision-making scenarios. Those decisions would be the ones that are complex for lay-people to make (like prescription drug plan options) or have many options (like choosing a manager for your retirement investments). While the authors do not want to reduce the number of options available or make the decision for anyone (libertarian), they do want to provide well-researched default options and/or forms of encouragement they call nudges to get people headed in a sensible direction (paternalism).
They give a small-stakes example of arranging the food choices in a school cafeteria so that the healthiest options are positioned at eye level at the beginning of the line so they are chosen more frequently (this apparently does really work). They don't want to take away the less healthy options, but neither do they heed the call to stay completely uninvolved. It's a hard philosophy to fault from either side of the political aisle and seems promising for implementation on a number of troubling political fronts we face right now.
Highly recommended for people who like new ideas and are curious to hear about something that isn't being talked up by either of our two major political parties right now.
|
|
|
