Chapter 9Nudge Thinking: How Small Things Lead to Big Results

I'm all for empowerment and education, but the empirical evidence is that it doesn't work. That's why I say make it easy.

—Richard Thaler

Before he won the 2017 Nobel Prize in economics, Richard Thaler was most known for changing our nation's approach to 401(k)s. In 2006, his research persuaded Congress to change 401(k) enrollment from an opt-in structure to an opt-out. That difference, that little nudge, increased 401(k) participation from 30% to 90%.

A nudge makes the right thing easy. It tips the better choice into the “automatic” realm. A fuel efficiency gauge near the speedometer is a nudge toward slower and gentler driving. Displaying bottled water and healthy juices at convenient reach (and hiding soft drinks) nudges people toward healthier consumption. Those kinds of cultural nudges flow out of behavioral economics. The positive reinforcement or the gentle suggestion shifts people toward greater safety, better health, economic improvement, and other individual and group benefits.

Think about the application of nudges. The old way—informing, training, begging, encouraging, inspiring, pushing, tempting, threatening, poking, or punishing people into compliance with policies or actions—is expensive, frustrating, and ultimately ineffective. That's because people are not rational beings. We thought they were; they're not. Move on.

Society could try to coerce people to become organ donors. That should be easy, ...

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