Nudge: improving decisions using the architecture of choice PDF
Preview Nudge: improving decisions using the architecture of choice
NUDGE This page intentionally left blank NUDGE Improving Decisions About Health, Wealth, and Happiness Richard H. Thaler Cass R. Sunstein Yale University Press New Haven & London A Caravan book. For more information, visit www.caravanbooks.org. Copyright © 2008 by Richard H. Thaler and Cass R. Sunstein. All rights reserved. This book may not be reproduced, in whole or in part, including illustrations, in any form (beyond that copying permitted by Sections 107 and 108 of the U.S. Copyright Law and except by reviewers for the public press), without written permission from the publishers. Set in Galliard and Copperplate 33 types by The Composing Room of Michigan, Inc. Printed in the United States of America. Library of Congress Cataloging-in-Publication Data Thaler, Richard H., 1945– Nudge : improving decisions about health, wealth, and happiness / Richard H. Thaler and Cass R. Sunstein. p. cm. Includes bibliographical references and index. ISBN 978-0-300-12223-7 (cloth : alk. paper) 1. Economics— Psychological aspects. 2. Choice (Psychology)—Economic aspects. 3. Decision making—Psychological aspects. 4.Consumer behavior. I. Sunstein, Cass R. II. Title. HB74.P8T53 2008 330.01(cid:1)9—dc22 2007047528 A catalogue record for this book is available from the British Library. The paper in this book meets the guidelines for permanence and durability of the Committee on Production Guidelines for Book Longevity of the Council on Library Resources. 10 9 8 7 6 5 4 3 2 1 For France, who makes everything in life better, even this book —RHT For Ellyn, who knows when to nudge her father —CRS This page intentionally left blank CONTENTS Acknowledgments ix Introduction 1 PART I HUMANS AND ECONS 1 Biases and Blunders 17 2 Resisting Temptation 40 3 Following the Herd 53 4 When Do We Need a Nudge? 72 5 Choice Architecture 81 PART II MONEY 6 Save More Tomorrow 103 7 Naïve Investing 118 8 Credit Markets 132 9 Privatizing Social Security: Smorgasbord Style 145 VII VIII CONTENTS PART III HEALTH 10 Prescription Drugs: Part D for Daunting 159 11 How to Increase Organ Donations 175 12 Saving the Planet 183 PART IV FREEDOM 13 Improving School Choices 199 14 Should Patients Be Forced to Buy Lottery Tickets? 207 15 Privatizing Marriage 215 PART V EXTENSIONS AND OBJECTIONS 16 A Dozen Nudges 229 17 Objections 236 18 The Real Third Way 252 Notes 255 Bibliography 263 Index 283 ACKNOWLEDGMENTS The research for this book would not have been possible without financial support from the University of Chicago Graduate School of Busi- ness and Law School. We have also received generous support from the John Templeton Foundation through a grant to the Center for Decision Research. Many people have helped us with this book. Sydelle Kramer, our agent, provided wonderful advice throughout. Michael O’Malley, our editor, made valuable suggestions on the manuscript. Dan Heaton, our copy edi- tor, cleaned up our writing with style and good humor. Special thanks to our fun and stellar team of research assistants, extending over two sum- mers; they include Jonathan Balz (who gets double thanks for putting up with us for two summers), Rachael Dizard, Casey Fronk, Matthew John- son, Heidi Liu, Brett Reynolds, Matthew Tokson, and Adam Wells. Kim Bartko was invaluable in helping us with the artwork in the book and with the cover design. Many colleagues made the book a lot better. For insights, hints, and even a few nudges beyond the call of both friendship and duty, we single out Shlomo Benartzi, Elizabeth Emens, Nick Epley, Dan Gilbert, Tom Gilovich, Jonathan Guryan, Justine Hastings, Christine Jolls, Daniel Kah- neman, Emir Kamenica, Dean Karlan, David Leonhardt, Michael Lewis, Brigitte Madrian, Cade Massey, Phil Maymin, Sendhil Mullainathan, Don Norman, Eric Posner, Richard Posner, Raghu Rajan, Dennis Regan, Tom Russell, Jesse Shapiro, Jennifer Tesher, Edna Ullmann-Margalit, Adrian IX
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