Nudge: Improving Decisions about Health, Wealth, and Happiness
by Richard H. Thaler and Cass R. Sunstein

Another in the series of post-Freakonomics books where economists explain new concepts and applications for a popular non-fiction audience. This one’s on the subject of “Choice Architecture” – basically, being aware of the ways in which the presentation of options influences the outcome of a decision, and building said presentation to maximize certain choices.

This was an interesting and sometimes frustrating read for me, because I found some of the assumptions about how the world operates (standard assumptions among economists, as far as I can tell) to be the total opposite of mine. The twin ideas that the magic of the market will generally improve people’s lives, and that government intervention is always suspect, are often underlying their statements in an “everybody knows that” sort of way. Yet many of their suggestions require some sort of government intervention, usually buried inside of such neutral language as “credit card companies should be required to”. (See the chapter on the privatization of the Swedish social security system: the government chose a default fund that really is in the best interest of the citizens; the private companies that advertised their own portfolios just had pics of celebrities saying “buy our stuff!” and weren’t generally as good for the citizen as the default plan. Yet throughout the book the “market good, government bad” truism still holds. Curious.) The notion that a business’ goal of maximizing profits may be antithetical to the general public’s goal of, I dunno, not getting bled dry by the hidden costs of buying a house or a college education, is only mentioned within 20 pages of the end.

The first few sections of the book are worth reading for anybody: if nothing else, to understand how choice architecture influences your decisions (cost aversion versus reward seeking when setting goals, for instance) and to recognize times when your choices are being pushed in certain directions.