Written by R. Thaler and C. Sunstein, this is a book exploring the world of behavioural economics and its role in improving people’s decisions from day-to-day to long-term – all with a simple ‘nudge’.
Nudge: The Final Edition is a captivating book written by renowned economists Richard Thaler and Cass Sunstein, and it explores the applications of behavioural economics in the case of the nudge. A ‘nudge‘ is defined as an action or change which can influence decisions without restricting the choices they have, and the authors use a term known as ‘libertarian paternalism’ to describe this. The paternalistic nature comes from trying to influence an individual’s decision to encourage them to choose what is best for them, while the libertarian aspect is shown by still keeping the same range of choices to not be restricting.
‘Nudge: The Final Edition’ also covers the different human heuristics and biases that can cause us the make irrational decisions and then proceeds to explore various examples of where this can occur. In addition, the writers analyse past attempts at solving these biases in different decision-making processes, such as retirement savings schemes. These are especially important as it is one of the most critical decisions in a person’s life that happens over a very long period of time – this time frame issue means that people are prone to be myopic or short-sighted, causing serious problems several decades into the future of that person’s life. Thaler and Sunstein evaluate plans implemented by different countries to try and fix this issue, as well as suggest their own improvements and ideas about solving the various problems covered in the book, and all of their proposed answers revolve around the initial idea of the nudge – helping people make the best possible choice for themselves without controlling their options.
I have written a series of articles going into more detail on behavioural economics, which are based off many of the ideas in Nudge, and you can find links to them embedded within the article or just go through the menu!
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