Embrace Possibility Nudge by Richard Thaler and Cass Sunstein

Nudge by Richard Thaler and Cass Sunstein

Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein

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Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein

  • Published: February 2009
  • ISBN-10: 014311526
  • EP Rating: 4 out of 5 (interesting read)

EP Main Takeaway: People's choices are heavily influenced by the context those choices are presented. You can "nudge" people to certain decisions if you take advantage of natural biases and architect the frame the choices are given.

Our notes:

People are influenced by the context their choices are framed in (Be a choice architect)

No such thing as a neutral design since we have built-in biases (example: vertical lines look longer than horizontal lines)

  • Small details can have a strong impact
  • Everything matters which allows you to "nudge" others - not about taking away option

Two systems:

  • Automatic system - unconscious, skill, gut feelings (humans)
  • Reflective system - conscious, rule following, analyzing ("econs" - completely rational beings)

Three rules of thumb that we use (biases)

  • Anchoring: start with some number you know and adjust; You can nudge others by choosing the starting point (if you want the number to be higher, start with a high number)
  • Availability: likelihood of risks are based on how available they are in our experience; chance of dream job not high because examples are not available; easily remembered events inflate people's assessment of the possibility of occurrence; focus on true possibilities
  • Representativeness: similarity: how similar is A to B based on our stereotypes - Tall basketball players. We often see patterns after looking at the results - streak shooting is a myth. People are unrealistically optimistic (businesses staying in business, smokers getting cancer).

Status quo bias: people lack attention to change the status quo; leverage this bias by setting the best possible defaults!**

People hate losses and to give up things:

  • "If you save energy, you'll save $300" is a weaker statement than "if you don't save energy, you'll lose $300".
  • Framing - 90 of 100 alive vs 10 of 100 are dead.

To resist temptation, during your "cold" state, make plans to mitigate temptations. When you are in the hot state, it's hard for you to make the right decisions.

  • Far-sighted planner vs myopic doer.
  • Easy to go into mindless doing (eating) - large plates mean more eating.

Mental accounting: we keep track of score in our mind

When gambling, people earmark funds that they've won and will treat those funds more recklessly.

Couples who look alike end up being happier.

Social influence is a strong persuader - we like to conform especially if others can see our choices**

  • People tend to eat more when they eat with others as opposed to eating alone. Other people's habits are contagious. Obesity is contagious.
  • Academic success depends on academic habits of roommates.
  • Consistent and unwavering people can move people in groups that's why you want to present confidently. Sharief - people want to conform.

Spotlight effect - people change behavior or conform when they feel everyone is paying attention to them. People pay less attention to you than you think but you perceive them to pay more attention than you think.

  • Show previously downloaded or # of ratings to influence.
  • Don't mess with Texas campaign.
  • Don't let people know their actions are better than the norm - they want to normalize to the group average.

Advertisers tell you what most people are doing to influence you. Be wary of herd behavior. To nudge others, inform people of what other people are doing. Emphasize that other people are doing what you recommend.

Robert Chen

Robert Chen is the founder of Embrace Possibility and author of The Dreams to Reality Fieldbook. He helps people who feel stuck move forward by guiding them to see other possibilities for their lives. He specializes in working with high performers get to the next level. If you're going through a tough time right now, check out Robert's article on How to Feel Better Right Away and if you're having trouble getting what you want out of life, check out How to Always Achieve Your Goals.

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