Choice Architecture

Nudge: Improving Decisions about Health, Wealth, and Happiness starts out as another fine addition to the literature on social psychology and behavioral economics (though its authors may cringe at the association with the latter). Yet it loses some of its sizzle the deeper one gets into it.

Richard Thaler and Cass Sunstein's book is all about choice architecture; that is, the way that the presentation and design of choices can (and often do) significantly influence human behavior. To illustrate, Thaler and Sunstein survey many of the celebrated concepts in behavioral science -- framing, anchoring, loss aversion and a host of other concepts besides -- to make the case that it is indeed possible to structure the choices people make to arrive at (mostly) better individual and social outcomes. Such "nudges" seem innocuous, such as the default option in a contribution-based pension plan or the layout of food in a school cafeteria. But because people are people, these nudges can have far-reaching effects, especially if the objective is to encourage a particular type of behavior.

Or at the risk of oversimplifying: the way our choices are framed affects the decisions we make.

It's an easy enough concept to wrap one's head around, yet the authors seem determined to cast it in philosophical terms. On that score, the authors contend that Nudge may also be considered an exposition of what they call "liberal paternalism", the careful use of choice architecture to shape human behavior towards desired outcomes without compromising their individual freedom. While sensible on its own and cogently discussed, this oft-repeated philosophical conceit seems at odds with the book's otherwise accessible presentation. Mostly, the book comes across as a straightforward reader on choice architecture, with Thaler and Sunstein including the occasional anecdote or (very) dry joke to get their points across. Yet they tend to muddle the issue, if not overthink it, by introducing and returning to the notion of liberal paternalism. Of course, all writers are entitled to their pet concepts and idiosyncrasies; yet in the case of Nudge, there is an argument to be made that it may have been an even better book had the authors dialed down the philosophizing, or at least decided from the start to present their ideas in a typically detached academic manner.

Thaler and Sunstein devote early chapters of the book to articulating the notion of liberal paternalism, thereafter applying their insights on choice architecture to specific cases suggested in the book's subtitle (i.e., health, wealth and happiness) that may or may not be of particular interest to readers. Hence, it has enough to offer the academically-inclined and the more practical-minded, if not anyone else who might fall somewhere in the between.