Thoughts:
The most important point, that is never discussed, is what is "better"? The
book constantly talks about making good, bad, better, or worse choices, but
only faintly expands upon what is good or bad. Generally it is taken that what
most people would like is good, but that is a fallacy in and of itself. Then
you enter the murky ground of trying to maximize the good for as many people as
possible. This would lead to at least some people being unhappy. One example
given is that a tax on cigarettes is good because most people don't want to
smoke cigarettes and people would love to stop but it is too addicting. Even if
you accept this, what about the people that WANT to smoke cigarettes? Should
they be punished because most people don't want to smoke yet can't exercise
self control?
The other questionable claim is that people are unable to make knowledgeable
decisions and subsequently make bad choices. The author says that most people
are too busy living their lives to be able to educate themselves and make
better choices. In some cases this may be true, I wouldn't expect Joe Average
to be able to make complex medical decisions, but when it comes to something
like retirement saving everyone should take the time to educate themselves to
the point where they can make responsible choices. Not having time because you
are "living your life" is bullshit. How many hours do people spend in front of
the tube or on Facebook? But they can't dedicate a few hours a week for a few
months to understand something as important as retirement savings? How many
people can rattle off celebrity gossip or sports statistics yet choose to never
give a second thought to the decisions that actually impact their lives.
This brings me to the last point: why can't people make "good" decisions in the
first place? It seems like an almost learned helplessness is present in most
people. You are generally treated as if you should always defer to the
professionals and this leads to the inability to think for yourself. I think
this is much deeper than proper decision making ability and gets to the heart
of our failing education system. A hundred years ago children that would only
attend a one-room schoolhouse were seemingly better equipped to make decisions
and, although we live in a different world with more data and more choices, the
underlying structure of education and decision making have not changed one bit.
Grammar, logic, and rhetoric of a trivium method based education allow anyone
to tackle any problem, to make any decision. When we allow others to choose
for us, through choice architecture or deferring to the professionals, we rob
ourselves of what it is to be a cognisant being. This will lead to even less
ability to manage decisions and more reliance on professionals, statistics, or
the state.
Instead of manipulating people to make statistically better choices, we should
be nurturing curiosity, life-long education, and personal growth. If there is
an argument to be made for nudging people to make better decisions, does it not
follow that instilling the ability to make better decisions (self/continuing
education) should also be promoted? If this is the case, should we not tax
television viewers and Facebook junkies for the very same reasons we tax
cigarettes? Can people get tax breaks for every (nonfiction) book they read?
All in all this is nothing more than statist propaganda. Big Brother knows
best, because science and case studies and statistics!
Notes:
Table of Contents
Introduction
01: Biases and Blunders
02: Resisting Temptation
03: Following the Herd
04: When Do We Need A Nudge?
05: Choice Architect
06: Save More Tomorrow
07: Naive Investing
08: Credit Markets
09: Privatizing Social Security
10: Prescription Drugs
11: How to Increase Organ Donations
12: Saving the Planet
13: Improving School Choices
14: Should Patients Be Forced to Buy Lottery Tickets?
15: Privatizing Marriage
16: A Dozen Nudges
17: Objections
18: The Read Third Way
page 3:
- A choice architect has the responsibility for organizing the context in which
people make decisions.
page 5:
- Libertarian paternalists want to make it easy for people to go their own way;
they do not want to burden those who want to exercise their freedom. The
paternalistic aspect lies in the claim that it is legitimate for choice
architects to try to influence people's behavior in order to make their lives
longer, healthier, and better. In other words, we argue
for self-conscious efforts, by institutions in the private sector and also by
government, to steer people's choices in directions that will improve their
lives.
page 8:
- By properly deploying both incentives and nudges, we can improve our ability
to improve people's lives, and help solve many of society's major problems.
page 9:
-
The false assumption is that almost all people, almost all of the time, make
choices that are in their best interest or at the very least are better than
the choices that would be made by someone else. We claim that this assumption
is false—indeed, obviously false. In fact, we do not think that anyone believes
it on reflection.
-
Suppose that a chess novice were to play against an experienced player.
Predictably, the novice would lose precisely because he made inferior
choices—choices that could easily be improved by some helpful hints.
-
// Could people make "poor" decisions because they have
lost the tools (education) to make decisions? This points back to the past; in
the 1800s were people making bad decisions? Why are people making bad decisions
today? The novice chess player needs to understand the game better. Instead of
nudging people teach them the rules to the decision making game.
page 19:
-
The approach involves a distinction between two kinds
of thinking, one that is intuitive and automatic, and another that is
reflective and rational.1 We will call the first the Automatic System
and the second the Reflective System. (In the psychology literature, these two
systems are sometimes referred to as System 1 and System 2, respectively.)
-
// Ties back to evolutionary psychology.
-
(Voters, by the way, seem to rely primarily on their Automatic System.3 A
candidate who makes a bad first impression, or who tries to win votes by
complex arguments and statistical demonstrations, may well run into trouble.)
page 23:
page 27:
page 36:
- When credit cards started to become popular forms of
payment in the 1970s, some retail merchants wanted to charge different prices
to their cash and credit card customers. (Credit card companies
typically charge retailers 1 percent of each sale.) To
prevent this, credit card companies adopted rules that forbade their retailers
from charging different prices to cash and credit customers. However, when a
bill was introduced in Congress to outlaw such rules, the credit card lobby
turned its attention to language. Its preference was that if a company charged
different prices to cash and credit customers, the credit price should be
considered the “normal” (default) price and the cash price a
discount—rather than the alternative of making the cash price the usual
price and charging a surcharge to credit card customers. The credit card
companies had a good intuitive understanding of what psychologists would come
to call “framing.”
page 37:
-
Framing works because people tend to be somewhat
mindless, passive decision makers. Their
Reflective System does not do the work that would be required to check and see
whether reframing the questions would produce a different answer. One reason
they don't do this is that they wouldn't know what to make of the
contradiction.
-
// Instead of trying to understand and exploit all of
these psychological tricks, why not understand WHY people make mindless
decisions and lack the ability/desire to check to make sure they are making the
best choices? It is easier to trick people than convince them they have been
tricked...
-
This implies that frames are powerful nudges,
and must be selected with caution.
page 47:
-
smokers might benefit from cigarette taxes, which discourage consumption
without forbidding it.3
-
// Unless you WANT to smoke...
page 49:
- Even when we’re on our way to making good choices, competitive markets find
ways to get us to overcome our last shred of resistance to bad ones.
page 58:
- consistent and unwavering people, in the private or public sector, can move
groups and practices in their preferred direction.
page 62:
- // An experiment watching which songs (for download) were
popular showed that the first few downloaded songs would garner more subsequent
downloads when the number of downloads was visible.
page 63:
- Small interventions and even coincidences, at a key
stage, can produce large variations in the outcome.
- The effects of social influences may or may not be deliberately planned by particular people.
page 100:
- //mnemonic for choice architects:
| iNcentives
Understand mappings
Defaults
Give feedback
Expect error
Structure complex choices
|
page 104:
- For most of their time on earth, Humans did not have to worry much about
saving for retirement, because most people did not live long enough to have
much of a retirement period. In most societies, those who did make it to old
age were cared for by their children. In the twentieth century, the combination
of rising life expectancies and geographical dispersion
of families made it necessary for people to think about providing for their own
retirement income rather than depending on their children...
page 105:
-
employees who change jobs frequently can end up with virtually no retirement
benefits, because there is often a minimum employment period (such as five
years) before any benefits are vested (that is, owned by the employee).
-
Some older American workers are also turning down “free money.” To have this
free money option, a worker must meet three qualifications: he needs to be more
than 591 / 2 years old, so that he faces no tax penalty when he withdraws funds
from his retirement account; his firm has to offer a matching contribution
(meaning that the firm contributes something if the employee does); and his
employer has to allow employees to withdraw funds from their retirement
accounts while still working. For such employees, joining the plan is a sure
profit opportunity because they can join, then immediately withdraw their
contributions without any penalty, yet keep the employer match. Nonetheless, a
study finds that up to 40 percent of eligible workers either do not join the
plan at all or do not save enough to get the full match.5
page 121:
-
(There is no twenty-year period in history in which stocks have declined in
real value, or have been outperformed by bonds.)
-
// Ignore that 20+ trillion debt, the magic money stock
market works!
-
// This book cites a Jew every few pages, surely the stock
market merchant is my friend, right?!
page 136:
-
The Truth in Lending Act was originally
intended to summarize the terms of the loan in clear terms. But it is
hard to see “truth” when it is buried in a mountain of fine print.
-
// Another act that has 100% opposite effects. How dumb
are those lawmakers... or how dumb are we for falling for their never ending
scams.
-
In 2007 there was an eruption of subprime foreclosures, which caused ripples
throughout financial markets, prompting many government bodies to think harder
about how to help. Of course markets, left alone, will
solve some of the problem, because investors who had been buying up subprime
loans learned the hard way that the loans were riskier than they seemed.
-
// Never mind that 800 billion dollar bailout and the
subsequent quantitative easing. Cheat, get caught, get a bailout! No moral
hazard here.
page 141:
-
learning to use a student loan recap spreadsheet
might be an excel- lent assignment in a high school math class for
seniors.
-
Credit cards are blessedly convenient. Paying
with a credit card is often faster than paying with cash, and lets you avoid struggling with change; digging into
your pocket to find the correct change and managing the
large jar of pennies at home are vexations from which you are liberated.
Not to mention the frequent flyer miles!
-
// If change and penny jars are "vexations", you are
already screwed.
page 156:
- The more choices you give people, the more help you need to provide.
page 175:
-
*Of course, economists have a simple solution to this problem, which is to
permit a market in organs. Although the idea has
obvious merit, it is also spectacularly unpopular for reasons that are not well
understood. We will not address the issue here. For a good summary of the
argument in favor of introducing markets see Becker and Elias (2007). Although
explicit markets appear to be politically infeasible now, a type of barter
exchange does seem to be acceptable. Suppose that each of us needs a kidney,
and each has a sibling who is willing to donate but does not have the same
blood type (which is essential). If Sunstein’s sister was a match for Thaler
and Thaler’s brother was a match for Sunstein, then a trade could be set up.
Much work is now being done in an effort to orchestrate such matches, using
techniques similar to those we discuss below involving school choice. A
question to ponder: Why is it socially acceptable for
Sunstein and Thaler to arrange this trade but unacceptable for Sunstein to
offer to buy Thaler’s brother a new car in exchange for his kidney?
-
// The whole premiss of the book is to nudge people into
making "good" decisions. How is selling your body, literally, a good decision?
Like eating junk food will lead to health problems in the future, don't you
think living on 1 kidney will cause health problems in the future?
page 176:
- The primary sources of organs are patients who have been declared “brain
dead,” meaning that they have suffered an irreversible loss of all brain
function but are being maintained temporarily on ventilators. In the United
States, roughly twelve thousand to fifteen thousand potential donors are in
this category each year, but fewer than half become donors. ... The major
obstacle to increasing donations is the need to get the consent of surviving
family members. It turns out that good default rules can increase available
organs and thus save lives.
page 192:
-
One reason that the Toyota Prius has been so successful compared with other
hybrid cars is that the Prius is sold only as a hybrid (unlike, say, a Camry,
which is sold in both conventional and hybrid versions). People who want to signal their green credentials are much
happier in a Prius than a hybrid Camry because no one will know that the Camry
is a hybrid unless she carefully examines some labeling on the car.
-
// This is virtue signalling.
page 199:
-
Most Americans seem to believe that children do have a right to a good
education...
-
// Even I agree with that, but "right to education" does
not mean someone to administer said education. With the internet and a library
everyone has access to the materials required to educate one's self. What most
Americans seem to believe is more along the lines of: everyone has the right to
sit in class for 16+ years and receive a piece of paper that admits them into
the workforce.
page 201:
- As with a 401(k) plan, the average parents know
little about their child’s school...
page 217:
-
A couple that is married within a religious or other
private tradition, but not with the authority of the state, lacks an important
kind of validation, regardless of the strength of that couple’s private
commitment or the importance to them of the religious element of their
marriage.
-
// It isn't real unless the state validates it!
page 218:
- In sum: when people marry, they receive not only material benefits but also a
kind of official legitimacy, a stamp of approval, from
the state.
page 220:
-
Some states have in fact experimented with an institution called covenant
marriage, which makes exit extremely difficult.
-
And it turns out that covenant marriage has made almost no difference to the
institution of marriage. Only about 1–3 percent of couples choose covenant
marriage when it is available, and not surprisingly, couples who choose that
option tend to be religious and to have a traditional view of marriage, child
rearing, and divorce.5
-
// This chapter constantly harps the "fact" that women are
worse off after divorce and men are better off, that women need protection
after divorce, and that women are generally vulnerable and more likely abused
in marriage. Even if this is the case, and I don't think it is, how does this
fit with the narrative of equality? How many dads are paying child support? How
many moms? Who usually gets the children? Who gets the lion's share of
assets?
-
// On the whole, I do agree that state should have nothing
to do with marriage and the benefits (tax, etc) of being married are
ridiculous. "Baby what we have together is so good... let's get the government
involved." -Bill Hicks
page 239:
- In offering supposedly helpful nudges, choice
architects may have their own agendas.
page 240:
-
We would love to see similar principles used to monitor governments. Require
government officials to put all their votes, earmarks, and contributions from
lobbyists on their Web sites.
-
// Contributions sure, maybe earmarks, but votes should be
anonymous. If you can see how officials voted, it makes bribery possible. With
anonymous votes, like it used to be, you can't check to see if the person you
bribed voted your way.
page 241:
-
Some of our most extreme critics offer an
objection that will strike many readers as just odd. These critics object to any forced exchanges. They don’t like to
take anything from Peter to give to Paul, even if Peter is very rich and Paul
is very poor. They obviously oppose progressive taxes. (Well, most taxes,
actually.)
-
// He is literally arguing for coercion, "forced
exchanges", and calling opposition odd.
