Book Review: “Nudge”

I recently finished reading a fascinating book entitled Nudge: Improving Decisions About Health, Wealth, and Happiness. The most basic idea behind the book is everything matters. Humans are constantly influenced unconsciously by seemingly trivial details. Put simply we are always being “nudged”. This book aims to harness the ways humans are nudged and use “choice architecture” in increase our quality of life.

The book begins by outlining some of the ways humans make decisions. Using insights from the growing field of behavioral economics, the authors explain how the vast majority of humans fail to follow the rules of rational choice theory in economics. Understanding these insights is paramount to understanding how humans make decisions and how to help humans make better decisions. (If these details sound interesting to you, read the book or take a microeconomics class, I am not going to take the time to outline them here.)

I will jump to some of the unique ideas proposed in this book about how to solve some of our world’s most complex and pressing challenges. As you will see choice architecture, seems to introduce interesting and innovative ideas for families, business people, and policy makers to consider.

– Organ Donations –

It is not difficult to understand that our doctors could save more lives if more people donated their organs when they no longer needed them (aka when they die). Currently the process for becoming an organ donor ignores how humans make decisions. Humans tend to be influenced by a “status-quo bias”. Said differently, we tend to remain locked into the default choice even if that choice is not what we really want. In the context of organ donation, the default status is non-organ donation. Because the default choice for organ donation is non-donor most humans are not organ donors. So it seems a way to save more lives would be a “presumed consent” method, which would flip the default status from “no” organ donor to “yes” organ donor. However this policy would probably be a difficult political sell. So a slightly less beneficial, but defiantly more agreeable policy would be a “mandated choice” policy. Under this policy everyone applying to receive a drivers licence must make a decision about whether or not to be an organ donor. A decision must be made in order to receive a driver’s licence. This policy would definitely increase the number of people who are organ donors and would translate into an increase in lives saved.

– Environmental Stewardship –

Caring for our earth’s recourses is an important issue no mater where you stand on the political spectrum. The challenge individual humans face with environmental care is the difficulty of grasping the total environmental cost (or “social cost” in economics jargon) of our choices. Trash cans are convient, gas prices are “too high”, and pollution/ global warming/ greenhouse gasses are largely invisible and offer little feedback.

Trash can are very convenient. Almost everything we interact with everyday can go into a trash can. Humans like trash cans because we don’t have to think. We don’t have to separate our trash into paper, plastic, or cardboard. The danger is we often don’t think when we throw away something. However when asked and required to think, most humans will display a preference to recycling. So what if trash cans were no longer labeled “trash” but rather labeled “landfill”. The reality of our choice would almost slap us across the face. We would be forced to think while disposing of our trash.

This past week included the 4th of July, Independence Day for the United States. Gas prices always seem to rise due to the increased holiday travel. With the increase in gas prices comes an increase in complaining about the extremely high cost of gas. (And the inevitable good-ole-days story from a family member about when gas cost $1 or less.) What if gas prices were actually too low? What if instead of complaining about gas prices being too high we advocated for the increasing of gas prices? Consider the cost of a gallon of gas on the environment. The exhaust from a gallon of gas leaves the engine of a car, settles in the atmosphere creating a greenhouse effect that warms the temperature of the earth and increasing the need for other energy powered appliances like air conditioners. Also a gallon of gas is almost invariably used on a road, which wears down over time and must be replaced or repaired requiring more gas from the machines that fix the road. Next think of where that gallon of gas is transporting you too. Are you using energy or gas in that location with that activity? Now consider the health problems associated with pollution and the costs accrued through those health issues. Also consider the cost of forgoing the benefit of a natural environment or resource such as a lake that is no longer available for use because of acid rain, erosion, or some other side-effect of pollution. All of a sudden paying $4 for a gallon of gas is very inexpensive. The reality is we do not pay the true social cost of gas. Perhaps a higher gas tax is in order. Or a community commitment to recognizing the true cost of gas. Whatever it is, we need some sort of signal communicating the real cost of our activities.

– Health Care –

The issue of health care is a polarizing topic in today’s pre-election political arena. It seems everyone has a legitimate opinion on how health care in the United States ought to be. The reason this is such a contentious topic is simply, health care is really expensive. Whatever policy our legislators decide to roll with will have enormous effects on the lives of millions of citizens of the United States. The idea proposed in this book seeks to simply decrease the cost of health care. The authors claim that there is one thing that consumers of health care in the United States are forced to buy, “the right to sue the doctor for negligence”. This becomes a forced lottery medical patients must play. Sometimes the pay-out is large and benefits the patient. But most of the time, patients do not receive any benefit close to the cost of the “lottery ticket”. The basic idea here is to give patients the choice to purchase the right to sue their doctor. If they feel they will receive a benefit greater than or equal to the cost then the patient will purchase the right to litigate. But if the patient does not feel the need to purchase this right, they don’t have to. And in effect lowering the total cost of the medical service.

– Other Nudges –

A Charity Debit Card which simplifies the hurdle and hassle of the tax deduction process of donating money to charities.

The iPed a piece of jewelry, perhaps a lapel pin, that changes color based on one’s carbon footprint. Electricity and gas use, airplane travel, ect.

Eliminating dividing lines on roads which makes drivers more cautious, decreasing speeds and the distance between oncoming trafic.

Tray-less Cafeterias which decrease the amount of food patrons can bring back to their table.

Procrastinators clock which varies the amount of time it is fast from zero to fifteen minutes. The procrastinator must always be aware of the time and will never be able to adjust for the time difference on the clock.

Homeless Meters are parking meters that provide funding for community oriented projects that support the homeless such as meals, job training, affordable housing, and educational services.

Flys in Urinals are used to give men something to aim at, decreasing cleaning costs to up to 80%.