# Nudge: Improving decisions about health, wealth, and happiness > ## Preface to the Final Edition ## Preface to the Final Edition and published the first edition in spring <2008> and began revising it in summer <2020>, during the pandemic. They named it the "final edition" with a firm intention never to revise it again. (See .) New concepts added in the revised edition: - **Smart Disclosure**: The idea that governments should disclose important information in modern formats. Use the internet to make information easier to find and enable the development of online decision tools called "choice engines." - **Sludge**: Whereas nudges help people make wise choices, sludge makes wise choices harder. Additional elements of : - Personalized defaults - Make it fun - Curation Other changes: - **Climate change and the environment**: Nudges alone cannot solve the problem, but the authors suggest ways they can help. - **Evaluating long-term policy effects**: Analysis of nudges' lasting effects through Sweden's national retirement savings program, launched in <2000>. - **Organ donation**: Corrects misunderstandings about "presumed consent." (The authors clearly explain that presumed consent is wrong in almost all circumstances.) - **Financial decisions**: Ways to help consumers make better choices about credit card debt, mortgages, insurance, health plans, and more. ## Introduction ### The Cafeteria An experiment tested whether the arrangement of food could influence students' choices without changing the menu. Different schools placed desserts, French fries, carrots, and other foods in different locations. Simply changing the arrangement noticeably increased or decreased consumption of particular foods. An example of . Many people act as choice architects without realizing it: doctors explaining treatment alternatives, people creating employee benefit selection forms, ballot designers, and so on. ### Libertarian Paternalism If you think the cafeteria should be designed to encourage children to choose healthier food, you hold a [libertarian paternalist](https://wiki.g15e.com/en/pages/Libertarian%20paternalism.txt) position. - **Libertarian**: People should be free to do what they want, provided they do not harm others, and should be able to opt out of unwanted situations. - **Paternalist**: It is legitimate to steer people toward longer, healthier, better lives. The authors' goal is to help people make the choices they would have made with full attention, complete information, unlimited cognitive abilities, and complete self-control. What is a [nudge](https://wiki.g15e.com/pages/Nudge.txt)? > A nudge, as we will use the term, is any aspect of the choice architecture that alters people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not taxes, fines, subsidies, bans, or mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not. ### Econs and Humans: Why Nudges Can Help The authors call classical economics' "economic man" an Econ, distinguishing this figure from real humans with bounded rationality. High obesity rates and similar phenomena show that humans often choose against their own interests. Many studies demonstrate irrational choices. Econs respond only to incentives, while humans respond to both incentives and nudges. Arranging these appropriately can improve people's lives and help solve major social problems while preserving freedom of choice. ### A False Assumption and Two Misconceptions Those opposing all intervention and advocating maximum freedom of choice falsely assume that "almost everyone almost always makes the choices that are best for them." Two misconceptions also cause problems. - **That it is possible not to influence people's choices**: Every design influences choices, intentionally or otherwise. Governments, too, inevitably provide a starting point through policy. - **That paternalism always involves coercion**: The order of food in a cafeteria does not force anyone to follow a particular diet. ### Chapter 5. Choice Architecture in Action Consider "What would a thoughtful person choose if fully informed?" and make that the default. > Libertarian paternalists would like to set the default by asking what thoughtful and well-informed employees would actually want…. Choosers are human, so designers should make life as easy as possible. Send reminders (but not too many!) and then try to minimize the costs imposed on those who, despite your (and their) best efforts, space out. ### A New Path [Libertarian paternalism](https://wiki.g15e.com/en/pages/Libertarian%20paternalism.txt) is neither left nor right. > In short, libertarian paternalism is neither left nor right. For all their differences, we hope that people with very different political convictions might be willing to converge in support of gentle nudges. ## Part 1. HUMANS AND ECONS ### Chapter 1. Biases and Blunders #### Rules of Thumb **Anchoring** **Availability** **Representativeness** #### Optimism and Overconfidence #### Gains and Losses #### Status Quo Bias #### Framing #### How We Think: Two Systems #### So What? ### Chapter 2. Resisting Temptation #### Self-Control Strategies #### Mental Accounting ### Chapter 3. Following the Herd #### Doing What Others Do #### Cultural Change, Political Change, and Unpredictability #### Identity: What People Like You Do #### Pluralistic Ignorance #### Social Norms as Nudges ## Part 2. THE TOOLS OF THE CHOICE ARCHITECT ### Chapter 4. When Do We Need a Nudge? #### Fraught Choices **Spacing Out** **Benefits Now, Costs Later** **Degree of Difficulty** **Frequency** **Feedback** **Knowing What You Like** #### Markets: A Mixed Verdict ### Chapter 5. Choice Architecture #### Defaults: Padding the Path of Least Resistance #### Expect Error #### Give Feedback #### Understanding "Mappings": From Choice to Welfare #### Structure Complex Choices #### Incentives #### When to Take a Break ### Chapter 6. But Wait, There's More #### Curation #### Fun ### Chapter 7. Smart Disclosure #### Measurement #### Chapter 7. Smart Disclosure **Make All Disclosures Machine Readable** **You Should Own Your Usage Data** ### Chapter 8. Sludge #### Private Sector Sludge: External Facing **The Unsubscribe Trap** **Rebates** #### Shrouded Attributes as Sludge #### Private Sector Red Tape #### College Admissions #### Governments #### Chapter 8. Sludge at the Airport #### Chapter 8. Sludge vs. Sludge: Online #### Taxes #### Reducing Sludge: One Step at a Time ## Part 3. MONEY ### Chapter 9. Save More Tomorrow #### Are People Saving Enough? #### Enrollment Decisions: Nudging People to Join #### Increasing Savings Rates #### Default Investment Options **But Where Does the Money Come From?** #### Best Practices ### Chapter 10. Do Nudges Last Forever? Perhaps in Sweden #### The Default Fund #### Did Active Choosers Make Good Choices? #### Advertising #### How Long Do Nudges Last? #### Lessons ### Chapter 11. Borrow More Today: Mortgages and Credit Cards #### Mortgages #### Credit Cards ### Chapter 12. Insurance: Don't Sweat the Small Stuff #### Extended Warranties #### Deductible Aversion #### Health Insurance: Choices Guaranteed to Be Bad ## Part 4. SOCIETY ### Chapter 13. Organ Donation: The Default Solution Illusion #### Some Background #### Routine Removal #### Presumed Consent #### Explicit Consent #### Prompted Choice #### Mandated Choice #### Incentives #### Lives Saved? #### The Bottom Line ### Chapter 14. Saving the Planet #### A Perfect Storm #### Creating Cooperation #### Better Incentives **Green Taxes** **Cap-and-Trade** #### The Energy Paradox #### Feedback and Information #### Disclosing Greenhouse Gas Emissions #### Automatically Green #### Norms and Transparency ## Part 5. THE COMPLAINTS DEPARTMENT ### Chapter 15. Much Ado About Nudging #### Slippery Slopes #### Freedom and Active Choice #### Don't Nudge, Boost #### Is Nudging Sneaky? #### Drawing Lines and the Publicity Principle #### On Mandates and Bans: Beyond Nudging? ## Epilogue