Nudge by Richard Thaler, if put very simply, is the condensed version of his research on psychology and behavioural economics and it’s application to some of the most important problems facing our society today. The book talks about the difference between Humans, who are not necessarily rational and Econs, who make all the economically sound and rational decisions. What the human needs to be more informed and rational like an econ is a nudge. A nudge is nothing but any small feature in the environment that attracts our attention and alters our behaviour. To accentuate his point, the approach of ‘libertarian paternalism’ gets advocated in the book. At their face value these two words seem contradictory. But according to the book, this approach pushes the human to make rational choices. Also, at the same time it makes sure the right to choose isn’t snatched from them. Thaler advocates that it is possible to achieve this goal with better ‘Choice Architecture’. Throughout the book, Thaler presents several examples and possible prospects of how and where a nudge is necessary to make sure the human makes better decisions without any third party hampering his/her freedom of choice.
For me, the most important lesson from book was how the book presents a better alternative on how the public policy can be and should be formulated which is not necessarily right or left. Humans are inevitably and inherently flawed and we all need help in making decisions. Nudge gives an option on improving choices without restricting options and without the use of bans and mandates.
The book is a brilliant and gripping read with simple language and easy to follow structure. I did struggle at times to understand the bigger picture but I believe it’s a journey we all should make to understand this concept.
I consider this book a very important one in today’s context primarily because of the failure of utopian socialism and the vices of crony capitalism. How the best of both can be used to produce something better is something we can all discuss but this book sure pushes us in that direction. .
Thank you @pallavi.wats for the suggestion. It was a great experience reading this book. - 3 days ago