A few weeks ago, I finished the book:
Thaler, Richard H., and Cass R. Sunstein. 2008. Nudge: improving decisions about health, wealth, and happiness. New Haven: Yale University Press.
I listened to this book through Listen Alaska plus, a downloadable audiobook site available to Alaskans living in about 14 communities, including Anchorage, Fairbanks and Juneau. There is also an author’s blog at nudges.org that might interest readers.
The book was mostly persuasive and easy to follow. The book is about choice architecture, which no one can avoid, and the practice of libertarian paternalism, which the authors define as preserving free choice while encouraging helpful alternatives in zero or low cost ways.
One of the many examples they offered impacted me personally. In their chapter in improving finances, they suggest that Congress should require credit card companies to list how long it would take someone to pay off their credit card using the minimum payment and offer an alternative amount to pay it off in three years. Apparently this particular nudge was enacted in the recently passed credit card reforms, because my issuer included just this information on my last statement. Because my memory for bills isn’t great, I had previously elected auto debiting the minimum payment on my card. This keeps my credit report happy, but a recent statement said that at my current rate it would take 24 years to pay off the card. It further said that if I raised my monthly payment by $100 or so, I could pay off the card in three years and save $8,000 over the life of the loan. Two days later I was in my bank office making the arrangements to autodebit the higher amount.
In this case, the government was not mandating higher minimum payments, nor did I have to change my behavior. The consequences of my behavior were set out before me in black and white and I chose the alternative that saved me money.
Most of their suggestions are about that simple and easy to implement while not forcing things on citizens. Thaler and Sunstein suggest that this way of “nudging” might be a way beyond tiresome Democratic/Republican policy discussions in Congress to low cost solutions that would bring considerable benefit to the country while preserving freedom. I entirely agree and if I could be assured that the book would actually be read, would happily buy a copy for my state and federal representatives.