Nudge summary

Why do we so often make decisions that aren’t really the best choices for us? In many cases, we simply have too little or too much information, or we can’t foresee the consequences of our actions. It’s only when we have, and can process, the right amount of information that we are in a place to make rational decisions.

For example, when we have to choose an ice cream flavor at an ice cream shop, we usually make that decision rather quickly. We see which flavors there are and we know from experience that strawberry ice cream tastes better than mango, i.e., we have all the necessary information and can process it rapidly.

When we see a laughing baby, we can’t help but smile. That “decision” to smile is made unconsciously; our response occurs entirely on its own.

But when we want to figure out the answer to 347 x 12, we confront this task in a conscious way, because finding the answer requires an effort and takes some time.

If you offer a long-time smoker a cigarette while she’s in the process of quitting, it’ll be difficult for her to resist the temptation. Although she’d like to quit and knows how bad it is for her, she’ll probably end up bumming a smoke.

The reason for this unwise response is a lack of will: despite her intentions, the temptation is simply too great. A certain degree of thoughtlessness also takes hold of us in such situations.

If companies want to be successful, they have to sell products and earn profits. And to do that, they have to fulfill their customers’ needs.

Whether that has positive or negative consequences on customers doesn’t matter to some companies – their main concern is whether customers are buying.

How can we keep ourselves from making the wrong decisions? With nudges, or little pushes in the right direction.

Nudges are not “no-nos” or clever advertising messages. Rather, they are subtle actions that make it easier for us to act in the way that is best for us without dictating a specific behavior. Simply put, nudges leave us free rein while making it easier for us to choose the right thing.

Considering that we don’t rack our brains every time we make a decision, decision-making situations should be designed so that automatic responses produce a positive outcome.

The e-mail service Gmail does just that with its attachment reminder. If words like “please find attached” are written in e-mail text but no file has been attached, the e-mail program automatically recognizes it and asks the user, “Did you want to send an attachment?” This little nudge can save people a lot of time and trouble.

The most opportune time to use nudges is in situations where it’s particularly difficult for us to make the right decisions.

Making the wrong decision is easy when we have an immediate pay-off and don’t feel the negative consequences until later. We take that second piece of cake and drink that cocktail after work because they give us pleasure in the moment and we only feel the negative effects later – when we step on a scale at the end of the month, or wake up the next morning with a headache.   

At the end of each year, many of us come to the conclusion that, yet again, we didn’t manage to stick to our New Year’s resolutions: the number on the scale is higher than last year and the ashtray is still full.

And yet some people are successful. How did they do it? Generally, the people who are able to stick to their resolutions do so by using nudges to keep them from making the wrong decisions throughout the year: they place bets with their friends, take advantage of public weigh-ins, or use Internet programs tailored to help them monitor their progress and stay on target.

Nudges encourage individuals to make better decisions – and this often benefits more than just the individual alone. An entire society benefits when the majority of its members make wise decisions. If fewer people smoke or are overweight, healthcare costs decrease – and everybody wins.

Even though a nudge may cost us something at first, the longer term benefits are generally not long in coming.