Thaler & Sunstein’s Nudge: how to make better decisions

Nudge cover

Nudge: Improving Decisions About Health, Wealth and Happiness by Richard H. Thaler and Cass R. Sunstein

We make decisions all the time, big and small. What to have for breakfast, what to wear, whether to buy a new TV or car, whether to change careers or commit to someone for life. Unfortunately, as Richard Thaler and Cass Sunstein argue in Nudge, we often choose poorly.


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This is because we’re never presented with a truly neutral choice. We’re biased, and that affects our decision-making.


DECISIONS / NUDGE

“Often we can do more to facilitate good behavior by removing some small obstacle than by trying to shove people in a certain direction.”


Thaler, Professor of Behavioral Science and Economics at the University of Chicago, and Sunstein, a Harvard Law professor and expert in behavioral economics, draw on their significant expertise to show us how people think, and how they can be nudged onto the right path without restricting their freedom of choice.

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Thaler and Sunstein list 5 biases that affect our decision-making:

  • Anchoring: relying too heavily on one piece of information and making (usually) false assumptions because of it.
  • Availability heuristic: overstating risk, or predicting the frequency of an event based on the number of examples of it (for example, thinking that murders are more common than suicides because we hear more about the former).
  • Representativeness heuristic: seeing patterns in random information.
  • Status quo bias: doing something that has traditionally been done even though it may not be the best thing for you personally. We have a tendency to resist change unless the benefits are clear.
  • Herd mentality: we’re heavily influenced by others, and peer pressure can be a major factor in the choices we make.

Once you understand how your different biases work, you can control them. You’ll be able to make better choices and improve your health, wealth and happiess, and help others do the same.

Check out our favorite nuggets from Nudge below!


Want to get the full book in Kindle version? Get it from here:
AmazonNudge by Richard H Thaler & Cass R Sunstein from Audible


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