32 results back to index
Why Nudge?: The Politics of Libertarian Paternalism by Cass R. Sunstein
Affordable Care Act / Obamacare, Andrei Shleifer, availability heuristic, Cass Sunstein, choice architecture, clean water, Daniel Kahneman / Amos Tversky, Edward Glaeser, endowment effect, energy security, framing effect, invisible hand, late fees, libertarian paternalism, loss aversion, nudge unit, randomized controlled trial, Richard Thaler
On that view, we should adopt a general rule against paternalism on rule-consequentialist grounds, not because the general rule always leads in good directions, but because it is far safer, and far better, than a case-by-case approach. Choice Architecture and Inevitable Nudges We have seen an immediate objection to the rule-consequentialist suggestion, and it cannot be repeated often enough, simply because it is so often ignored (and so please forgive the italics): Choice architecture is inevitable. The social environment influences choices, and it is not possible to dispense with a social environment. This point holds whether the social environment is a product of self-conscious designers or of some kind of invisible-hand mechanism. There can be (and often is) choice architecture without choice architects.36 Default rules are omnipresent, and they matter.
If so, we might think that while choice architecture cannot be avoided, it is possible to avoid paternalism. Perhaps choice architects—at least if they are working for the government—can self-consciously refuse to influence or alter people’s choices (if the only concern is the effect of those choices on choosers themselves). Government officials might respect those choices, and the choice architecture that is established by the private sector, and attempt to avoid any independent effects of their own. It is true that officials can work to minimize such effects. But some choice architecture is likely to be in place from government, and no such architecture is entirely neutral.37 Whenever officials are setting up websites or cafeterias, or producing forms and applications of various kinds, their decisions will have some effect on what people select.
But it is an empirical issue whether that question, properly answered, raises a serious problem for a proposed act of paternalism. CHOICE ARCHITECTURE AND FREEDOM Actually, there is a deeper problem, to which I briefly referred in the context of welfare: All of us could, in principle, make far more decisions than we do in fact. Every hour of every day, choices are implicitly made for us, by both private and public institutions, and we are both better off and more autonomous as a result. If we had to make all decisions that are relevant to us, without the assistance of helpful choice architecture, we would be far less free. In a literal sense, choice architecture enables us to be free. Most of us do not have to make choices about what a refrigerator or an alarm clock should look like, or how best to clean tap water, or how to build or fly an airplane, or what safety equipment should be on trains, or what medicine to take if we have strep throat, or whether chemotherapy should exist, or where highways and street signs are located.
Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler, Cass R. Sunstein
Al Roth, Albert Einstein, asset allocation, availability heuristic, call centre, Cass Sunstein, choice architecture, continuous integration, Daniel Kahneman / Amos Tversky, desegregation, diversification, diversified portfolio, endowment effect, equity premium, feminist movement, fixed income, framing effect, full employment, George Akerlof, index fund, invisible hand, late fees, libertarian paternalism, loss aversion, Mahatma Gandhi, Mason jar, medical malpractice, medical residency, mental accounting, meta-analysis, Milgram experiment, money market fund, pension reform, presumed consent, price discrimination, profit maximization, rent-seeking, Richard Thaler, Right to Buy, risk tolerance, Robert Shiller, Robert Shiller, Saturday Night Live, school choice, school vouchers, Tragedy of the Commons, transaction costs, Vanguard fund, Zipcar
And by insisting that choices remain unrestricted, we think that the risks of inept or even corrupt designs are reduced. Freedom to choose is the best safeguard against bad choice architecture. Choice Architecture in Action Choice architects can make major improvements to the lives of others by designing user-friendly environments. Many of the most successful companies have helped people, or succeeded in the marketplace, for exactly that reason. Sometimes the choice architecture is highly visible, and consumers and employers are much pleased by it. (The iPod and the iPhone are good examples because not only are they elegantly styled, but it is also easy for the user to get the devices to do what they want.)
They do less well in contexts in which they are inexperienced and poorly informed, and in which feedback is slow or infrequent—say, in choosing between fruit and ice cream (where the long-term effects are slow and feedback is poor) or in choosing among medical treatments or investment options. If you are given fifty prescription drug plans, with multiple and varying features, you might benefit from a little help. So long as people are not choosing perfectly, some changes in the choice architecture could make their lives go better (as judged by their own preferences, not those of some bureaucrat). As we will try to show, it is not only possible to design choice architecture to make people better off; in many cases it is easy to do so. The first misconception is that it is possible to avoid influencing people’s choices. In many situations, some organization or agent must make a choice that will affect the behavior of some other people.
Social science research reveals that as the choices become more numerous and/or vary on more dimensions, people are more likely to adopt simplifying strategies. The implications for choice architecture are related. As alternatives become more numerous and more complex, choice architects have more to think about and more work to do, and are much more likely to influence choices (for better or for worse). For an ice cream shop with three flavors, any menu listing those flavors in any order will do just fine, and effects on choices (such as order effects) are likely to be minor because people know what they like. As choices become more numerous, though, good choice architecture will provide structure, and structure will affect outcomes.
The World Beyond Your Head: On Becoming an Individual in an Age of Distraction by Matthew B. Crawford
airport security, Cass Sunstein, choice architecture, collateralized debt obligation, creative destruction, David Brooks, delayed gratification, dematerialisation, deskilling, digital Maoism, Google Glasses, hive mind, index card, informal economy, Jaron Lanier, large denomination, new economy, new new economy, Norman Mailer, online collectivism, Plutocrats, plutocrats, Richard Thaler, Rodney Brooks, self-driving car, Silicon Valley, Silicon Valley ideology, Stanford marshmallow experiment, the built environment, the scientific method, The Wisdom of Crowds, theory of mind, Walter Mischel, winner-take-all economy
When the choosing will is hermetically sealed off from the fuzzy, hard-to-master contingencies of the empirical world, it becomes more “free” in a sense: free for the kind of neurotic dissociation from reality that opens the door wide for others to leap in on our behalf, and present options that are available to us without the world-disclosing effort of skillful engagement. For the Mouseke-doer, choosing (from a menu of ready-made solutions) replaces doing, and it follows that such a person should be more pliable to the choice architectures presented to us in mass culture. The absence of the real from Mickey Mouse Clubhouse—indeed, the dissociative or abstract quality of children’s television in general these days—makes it an ideal vehicle for psychological adjustment; for constructing and managing the kind of selves that society requires, without meddling interference from the nature of things.
Our current attentional environment is novel, but as we have already begun to investigate with our discussion of Kant, it was prepared by a long intellectual history. To repeat a formulation I used in the previous chapter, if choosing replaces doing for the mouse-clicking Mouseke-doer, it figures that such a disengaged self should be especially pliable to the “choice architectures” that get installed in public spaces. As we shall see, in the darker precincts of capitalism things are being designed to foster disengagement, to the point of inducing a kind of autism. 5 AUTISM AS A DESIGN PRINCIPLE: GAMBLING When my oldest daughter was a toddler, we had a Leap Frog Learning Table in the house.
I argued that all of this tends to sculpt a certain kind of contemporary self, a fragile one whose freedom and dignity depend on its being insulated from contingency, and who tends to view technology as magic for accomplishing this. For such a self, choosing from a menu of options replaces the kind of adult agency that grapples with things in an unfiltered way. Finally, I argued that such a choosy self is especially pliable to the “choice architectures” that get installed on our behalf by various functionaries of psychological adjustment. These features of our world are hard to criticize because, though they may be appalling once described in the way that I have, they are intimately connected to our defining virtues as modern Western people.
Think Twice: Harnessing the Power of Counterintuition by Michael J. Mauboussin
affirmative action, asset allocation, Atul Gawande, availability heuristic, Benoit Mandelbrot, Bernie Madoff, Black Swan, butter production in bangladesh, Cass Sunstein, choice architecture, Clayton Christensen, cognitive dissonance, collateralized debt obligation, Daniel Kahneman / Amos Tversky, deliberate practice, disruptive innovation, Edward Thorp, experimental economics, financial innovation, framing effect, fundamental attribution error, Geoffrey West, Santa Fe Institute, George Akerlof, hindsight bias, hiring and firing, information asymmetry, libertarian paternalism, Long Term Capital Management, loose coupling, loss aversion, mandelbrot fractal, Menlo Park, meta-analysis, money market fund, Murray Gell-Mann, Netflix Prize, pattern recognition, Performance of Mutual Funds in the Period, Philip Mirowski, placebo effect, Ponzi scheme, prediction markets, presumed consent, Richard Thaler, Robert Shiller, Robert Shiller, statistical model, Steven Pinker, The Wisdom of Crowds, ultimatum game
A prominent psychologist who is popular on the speaker circuit told me a story that underscores how underappreciated choice architecture remains. When companies call to invite him to speak, he offers them two choices. Either they can pay him his set fee and get a standard presentation, or they can pay him nothing in exchange for the opportunity to work with him on an experiment to improve choice architecture (e.g., redesign a form or Web site). Of course, the psychologist benefits by getting more real-world results on choice architecture, but it seems like a pretty good deal for the company as well, because an improved architecture might translate into financial benefits vastly in excess of his speaking fee.
This applies to a wide array of choices, from insignificant issues like the ringtone on a new cell phone to consequential issues like financial savings, educational choice, and medical alternatives. Richard Thaler, an economist, and Cass Sunstein, a law professor, call the relationship between choice presentation and the ultimate decision “choice architecture.” They convincingly argue that we can easily nudge people toward a particular decision based solely on how we arrange the choices for them.17 FIGURE 4-3 How opt-in and opt-out policies shape consent rates Source: Based on data from Eric J. Johnson and Daniel Goldstein, “Do Defaults Save Lives?”
The Willpower Instinct: How Self-Control Works, Why It Matters, and What You Can Doto Get More of It by Kelly McGonigal
banking crisis, bioinformatics, Cass Sunstein, choice architecture, cognitive bias, delayed gratification, game design, impulse control, lifelogging, loss aversion, meta-analysis, phenotype, Richard Thaler, Stanford marshmallow experiment, Tragedy of the Commons, Walter Mischel
Behavioral economist Richard Thaler and legal scholar Cass Sunstein have argued persuasively for “choice architecture,” systems that make it easier for people to make good decisions consistent with their values and goals. For example, asking people to become organ donors when they renew a driver’s license or register to vote. Or having health insurance companies automatically schedule annual check-ups for their members. These are things most people mean to do, but put off because they are distracted by so many other more pressing demands. Retailers already use choice architecture to influence what you buy, although usually not for any noble purpose but to make a profit.
Instead of lining the checkout area with indulgent impulse purchases like candy and gossip magazines, stores could use that real estate to make it easier for people to pick up dental floss, condoms, or fresh fruit. This kind of simple product placement has been shown to dramatically increase healthy purchases. Choice architecture designed to manipulate people’s decisions is a controversial proposition. Some see it as restricting individual freedom or ignoring personal responsibility. And yet, people who are free to choose anything most often choose against their long-term interests. Research on the limits of self-control suggests that this is not because we are innately irrational, or because we are making deliberate decisions to enjoy today and screw tomorrow.
Page 77—For a dramatic telling of the Easter Island tragedy, see Diamond, J. Collapse: How Societies Choose to Fail or Succeed. New York: Viking, 2004. For an economic model, see Bologna, M., and J. C. Flores. “A Simple Mathematical Model of Society Collapse Applied to Easter Island.” EPL (Europhysics Letters) 81 (2008): 480–86. Page 78—“Choice architecture”: Thaler, R. H., and C. R. Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness. New York: Knopf, 2008. Page 79—Placement increases purchases: Just, D. R., and B. Wansink. “Smarter Lunchrooms: Using Behavioral Economics to Improve Meal Selection.” Choices 24 (2009). Chapter 4.
The Googlization of Everything: by Siva Vaidhyanathan
1960s counterculture, activist fund / activist shareholder / activist investor, AltaVista, barriers to entry, Berlin Wall, borderless world, Burning Man, Cass Sunstein, choice architecture, cloud computing, computer age, corporate social responsibility, correlation does not imply causation, creative destruction, data acquisition, death of newspapers, don't be evil, Firefox, Francis Fukuyama: the end of history, full text search, global pandemic, global village, Google Earth, Howard Rheingold, Ian Bogost, independent contractor, informal economy, information retrieval, John Markoff, Joseph Schumpeter, Kevin Kelly, knowledge worker, libertarian paternalism, market fundamentalism, Marshall McLuhan, means of production, Mikhail Gorbachev, moral panic, Naomi Klein, Network effects, new economy, Nicholas Carr, PageRank, Panopticon Jeremy Bentham, pirate software, Ray Kurzweil, Richard Thaler, Ronald Reagan, side project, Silicon Valley, Silicon Valley ideology, single-payer health, Skype, Social Responsibility of Business Is to Increase Its Profits, social web, Steven Levy, Stewart Brand, technoutopianism, The Nature of the Firm, The Structural Transformation of the Public Sphere, Thorstein Veblen, urban decay, web application, Yochai Benkler, zero-sum game
More seriously, Mayer and Google fail to acknowledge the power of default settings in a regime ostensibly based on choice. T H E IRR EL EVANC E O F C H O I C E In their 2007 book Nudge: Improving Decisions about Health, Wealth, and Happiness, the economist Richard Thaler and law professor Cass Sunstein describe a concept they call “choice architecture.” Plainly put, the structure and order of the choices offered to us profoundly inﬂuence the decisions we make. So, for instance, the arrangement of foods in a school cafeteria can inﬂuence children to eat better. The positions of restrooms and break rooms can inﬂuence the creativity and communality of ofﬁce staff.
When the default was set to enroll employees automatically, while giving them an opportunity to opt out, enrollment reached 98 percent within six months. The default setting of automatic enrollment, Thaler and Sunstein explain, helped employees overcome the “inertia” caused by business, distraction, and forgetfulness.9 That choice architecture could have such an important effect on so many human behaviors without overt coercion or even elaborate incentives convinced Thaler and Sunstein that taking advantage of it can accomplish many important public-policy goals without signiﬁcant cost to either the state or private ﬁrms. They call this approach “libertarian paternalism.”
They call this approach “libertarian paternalism.” If a system is designed to privilege a particular choice, they observe, people will tend to choose that option more than the alternatives, even though they have an entirely free choice. “There is no such thing as a ‘neutral’ design.”10 It’s clear that Google understands the power of choice architecture. It’s in the company’s interest to set all user-preference defaults to collect the THE GOOGL I ZAT I ON OF US 89 greatest quantity of usable data in the most contexts. By default, Google places a cookie in your Web browser to help the service remember who you are and what you have searched.
Hooked: How to Build Habit-Forming Products by Nir Eyal
Airbnb, AltaVista, Cass Sunstein, choice architecture, cognitive bias, cognitive dissonance, en.wikipedia.org, framing effect, game design, Google Glasses, Ian Bogost, IKEA effect, Inbox Zero, invention of the telephone, iterative process, Jeff Bezos, Lean Startup, Mahatma Gandhi, Mark Zuckerberg, meta-analysis, Oculus Rift, Paul Buchheit, Paul Graham, Peter Thiel, QWERTY keyboard, Richard Thaler, Silicon Valley, Silicon Valley startup, Snapchat, TaskRabbit, telemarketer, the new new thing, Toyota Production System, Y Combinator
Perhaps technology’s unstoppable progress—ever more pervasive and persuasive—has grabbed us in a fearful malaise at the thought of being involuntarily controlled. Although the fear is palpable, we are like the heroes in every zombie film—threatened but ultimately more powerful. I have come to learn that habit-forming products can do far more good than harm. Choice architecture, a concept described by famed scholars Thaler, Sunstein, and Balz in their same-titled scholarly paper, offers techniques to influence people’s decisions and affect behavioral outcomes. Ultimately, though, the practice should be “used to help nudge people to make better choices (as judged by themselves).”15 Accordingly, this book teaches innovators how to build products to help people do the things they already want to do but, for lack of a solution, don’t do.
Damien Brevers and Xavier Noël, “Pathological Gambling and the Loss of Willpower: A Neurocognitive Perspective,” Socioaffective Neuroscience & Psychology 3, no. 2 (Sept. 2013), doi:10.3402/snp.v3i0.21592. 13. Paul Graham, “The Acceleration of Addictiveness,” (accessed Nov. 12, 2013), http://www.paulgraham.com/addiction.html. 14. Night of the Living Dead, IMDb, (accessed June 25, 2014), http://www.imdb.com/title/tt0063350. 15. Richard H. Thaler, Cass R. Sunstein, and John P. Balz, “Choice Architecture” (SSRN Scholarly Paper, Rochester, NY), Social Science Research Network (April 2, 2010), http://papers.ssrn.com/abstract=1583509. Chapter 1: The Habit Zone 1. Wendy Wood, Jeffrey M. Quinn, and Deborah A. Kashy, “Habits in Everyday Life: Thought, Emotion, and Action,” Journal of Personality and Social Psychology 83, no. 6 (Dec. 2002): 1281–97. 2.
Kara Swisher and Liz Gannes, “Pinterest Does Another Massive Funding—$225 Million at $3.8 Billion Valuation (Confirmed),” All Things Digital (accessed Nov. 13, 2013), http://allthingsd.com/20131023/pinterest-does-another-massive-funding-225-million-at-3-8-billion-valuation/. Chapter 6: What Are You Going to Do with This? 1. For further thoughts on the morality of designing behavior, see: Richard H. Thaler, Cass R. Sunstein, and John P. Balz, “Choice Architecture” (SSRN Scholarly Paper, Rochester, New York), Social Science Research Network, (April 2, 2010), http://papers.ssrn.com/abstract=1583509. 2. Charlie White, “Survey: Cellphones vs. Sex—Which Wins?,” Mashable (accessed), http://mashable.com/2011/08/03/telenav-cellphone-infographic. 3.
Mindware: Tools for Smart Thinking by Richard E. Nisbett
affirmative action, Albert Einstein, availability heuristic, big-box store, Cass Sunstein, choice architecture, cognitive dissonance, correlation coefficient, correlation does not imply causation, cosmological constant, Daniel Kahneman / Amos Tversky, dark matter, endowment effect, experimental subject, feminist movement, fixed income, fundamental attribution error, Garrett Hardin, glass ceiling, Henri Poincaré, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, job satisfaction, Kickstarter, lake wobegon effect, libertarian paternalism, longitudinal study, loss aversion, low skilled workers, Menlo Park, meta-analysis, quantitative easing, Richard Thaler, Ronald Reagan, selection bias, Shai Danziger, Socratic dialogue, Steve Jobs, Steven Levy, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Tragedy of the Commons, William of Occam, Zipcar
Germany has an opt-in policy. The default is that the state has no right to harvest a person’s organs unless the person specifically agrees to that. Opt-in is the policy in the United States. Scores of thousands of people have died who would have lived if the United States had an opt-out policy. Choice architecture plays a vital role in determining what decisions people make. Some ways of structuring decisions result in better outcomes for individuals and for society than other ways of structuring decisions. No one is hurt by opt-out procedures for things like organ donation; no coercion is involved because people who wish not to have their organs harvested are free to decline.
No one is hurt by opt-out procedures for things like organ donation; no coercion is involved because people who wish not to have their organs harvested are free to decline. The deliberate design of decision frameworks that function for individual and collective good has been called “libertarian paternalism” by Thaler and Sunstein.8 The difference between choice architectures that foster the right choices and those that don’t can be subtle—at least to people who are unfamiliar with the power of loss aversion and consequent status quo bias. In a “defined contribution” retirement plan, an employer pays a fixed amount of money into a savings plan equal to some fraction of what the employee puts into the plan.
In fact, however, about 30 percent of employees fail to sign up for such plans.9 A study in Britain of twenty-five corporations that offered defined contribution plans—and paid 100 percent of the cost—found that barely half of employees signed up for the plan!10 This is like burning up a portion of your salary. A sensible choice architecture for savings plans would not require people to opt in, which after all takes little more effort than checking a box, but would have an opt-out default, which requires even less energy than that. You are enrolled in the plan unless you ask not to be. In one plan, the opt-in approach resulted in scarcely more than 20 percent enrollment three months after starting the job and only 65 percent after three years on the job.
Inside the Nudge Unit: How Small Changes Can Make a Big Difference by David Halpern
Affordable Care Act / Obamacare, availability heuristic, carbon footprint, Cass Sunstein, centre right, choice architecture, cognitive dissonance, collaborative consumption, correlation does not imply causation, Daniel Kahneman / Amos Tversky, different worldview, endowment effect, happiness index / gross national happiness, hedonic treadmill, hindsight bias, IKEA effect, illegal immigration, job satisfaction, Kickstarter, libertarian paternalism, light touch regulation, longitudinal study, market design, meta-analysis, Milgram experiment, nudge unit, peer-to-peer lending, pension reform, presumed consent, QR code, quantitative easing, randomized controlled trial, Richard Thaler, Right to Buy, Ronald Reagan, Rory Sutherland, Simon Kuznets, skunkworks, the built environment, theory of mind, traffic fines, twin studies, World Values Survey
First, as non-psychologists they helped to break the ideas out of psychology, and applied them in an accessible form to problems that faced economists and lawmakers. Second, they blended into these existing literatures new ideas from ‘behavioural economics’, including a more formal recognition of the widespread power of defaults and ‘choice architecture’ – or the way in which choices are presented to people.1 Third, they engaged directly in policy, not least through an old Chicago friend and colleague, Barak Obama. Obama and Sunstein: ‘nudge’ comes to Washington In a move that attracted widespread attention, the new President Obama appointed the co-author of Nudge, Cass Sunstein, to be his ‘regulatory tsar’ in his government in 2008.
Employees are still free to opt out if they wish to do so. It is transparent what the choice is, and employees are informed by law about it. In contrast, in some western countries you are obliged to save – though you may have some choice about your pension provider. There’s no neutral choice Nudgers often talk about ‘choice architecture’ – the way that options are presented. The everyday example that is often discussed is the order in which food is presented in a cafeteria. Which do you see first: the salad or the chips? It turns out that the order matters. When you walk in hungry, whichever option you see first is very likely to end up on your tray.
Effective communication versus propaganda A lot of what BIT does, along with other similar units emerging across the world, concerns communication, at least in a broader sense. A lot of the issues we are asked to work on are about informing, encouraging and persuading. In this sense, the choice architecture is left unchanged, but the focus is on making one action feel more, or less, attractive than another. Indeed, occasionally overseas visitors look at what we do and say, ‘Isn’t this just comms?’ Some of it is clearly about ‘comms’, though we’d like to think that we’re a bit more scientific and rigorous about it than your average ad agency.
The Social Animal: The Hidden Sources of Love, Character, and Achievement by David Brooks
Albert Einstein, asset allocation, assortative mating, Atul Gawande, Bernie Madoff, business process, Cass Sunstein, choice architecture, clean water, creative destruction, Daniel Kahneman / Amos Tversky, David Brooks, delayed gratification, deliberate practice, disintermediation, Donald Trump, Douglas Hofstadter, Emanuel Derman, en.wikipedia.org, fear of failure, financial deregulation, financial independence, Flynn Effect, George Akerlof, Henri Poincaré, hiring and firing, impulse control, invisible hand, Joseph Schumpeter, labor-force participation, longitudinal study, loss aversion, medical residency, meta-analysis, Monroe Doctrine, Paul Samuelson, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, school vouchers, six sigma, social intelligence, Stanford marshmallow experiment, Steve Jobs, Steven Pinker, the scientific method, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, Walter Mischel, young professional
Erica decided she would build her consulting business not on cultural segmentation, which the market wasn’t ready for, but on behavioral economics, which was hot and in demand. Heuristics Erica read the major behavioral economists. Behind every choice, they said, there is a choice architecture, an unconscious set of structures that helps frame the decision. This choice architecture often comes in the forms of heuristics. The mind stores certain “if … then …” rules of thumb, which get activated by context and can be trotted out and applied in appropriate or near-appropriate circumstances. First, for example, there is priming.
HQ801.B76 2011 305.5′130973—dc22 2010045785 www.atrandom.com v3.1 Contents Cover Other Books by This Author Title Page Copyright INTRODUCTION CHAPTER 1 DECISION MAKING CHAPTER 2 THE MAP MELD CHAPTER 3 MINDSIGHT CHAPTER 4 MAPMAKING CHAPTER 5 ATTACHMENT CHAPTER 6 LEARNING CHAPTER 7 NORMS CHAPTER 8 SELF-CONTROL CHAPTER 9 CULTURE CHAPTER 10 INTELLIGENCE CHAPTER 11 CHOICE ARCHITECTURE CHAPTER 12 FREEDOM AND COMMITMENT CHAPTER 13 LIMERENCE CHAPTER 14 THE GRAND NARRATIVE CHAPTER 15 MÉTIS CHAPTER 16 THE INSURGENCY CHAPTER 17 GETTING OLDER CHAPTER 18 MORALITY CHAPTER 19 THE LEADER CHAPTER 20 THE SOFT SIDE CHAPTER 21 THE OTHER EDUCATION CHAPTER 22 MEANING ACKNOWLEDGMENTS NOTES About the Author INTRODUCTION THIS IS THE HAPPIEST STORY YOU’VE EVER READ.
She felt liberated not having to follow the guardrails of some other person’s thinking. She was going to create a consulting firm that would be unlike any other. It would be humanist in the deepest sense. It would treat people not as data points, but as the fully formed idiosyncratic creatures they are. She was utterly convinced she would succeed. CHAPTER 11 CHOICE ARCHITECTURE SOMETIME BACK IN THE PHARAOHS’ DAY, A SHOPKEEPER DISCOVERED he could manipulate the unconscious thoughts of his customers simply by manipulating the environment in his store. Merchandisers have been following his lead ever since. For example, shoppers in grocery stores usually confront the fruit-and-vegetable section first.
Futureproof: 9 Rules for Humans in the Age of Automation by Kevin Roose
Airbnb, Albert Einstein, algorithmic bias, Amazon Web Services, Atul Gawande, augmented reality, automated trading system, basic income, Bayesian statistics, big-box store, business process, call centre, choice architecture, coronavirus, Covid-19, COVID-19, disinformation, Elon Musk, Erik Brynjolfsson, factory automation, fault tolerance, Frederick Winslow Taylor, Freestyle chess, future of work, gig economy, Google Hangouts, hiring and firing, hustle culture, income inequality, industrial robot, Jeff Bezos, job automation, John Markoff, knowledge worker, Kodak vs Instagram, labor-force participation, Lyft, mandatory minimum, Marc Andreessen, Mark Zuckerberg, meta-analysis, Narrative Science, new economy, Norbert Wiener, pattern recognition, planetary scale, Plutocrats, plutocrats, Productivity paradox, QAnon, recommendation engine, remote working, risk tolerance, robotic process automation, Second Machine Age, self-driving car, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, Steve Jobs, surveillance capitalism, The Future of Employment, The Wealth of Nations by Adam Smith, Travis Kalanick, Uber and Lyft, uber lyft, universal basic income, Watson beat the top human players on Jeopardy!
* * * — The fact that machines can shape our preferences is not a secret in Silicon Valley. In fact, there is an entire subdiscipline of product design, called “choice architecture,” that uses subtle design elements to change the things users click, buy, and pay attention to. Some choice architecture can be helpful—it’s good, for example, that Yelp shows you nearby and well-reviewed restaurants by default and doesn’t make you sort through an alphabetical list of all the restaurants in your city. But choice architecture can also steer our attention to things we don’t want, that aren’t beneficial for us, and that we wouldn’t have sought out on our own.
Misbehaving: The Making of Behavioral Economics by Richard H. Thaler
"Robert Solow", 3Com Palm IPO, Albert Einstein, Alvin Roth, Amazon Mechanical Turk, Andrei Shleifer, Apple's 1984 Super Bowl advert, Atul Gawande, Berlin Wall, Bernie Madoff, Black-Scholes formula, business cycle, capital asset pricing model, Cass Sunstein, Checklist Manifesto, choice architecture, clean water, cognitive dissonance, conceptual framework, constrained optimization, Daniel Kahneman / Amos Tversky, delayed gratification, diversification, diversified portfolio, Edward Glaeser, endowment effect, equity premium, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, George Akerlof, hindsight bias, Home mortgage interest deduction, impulse control, index fund, information asymmetry, invisible hand, Jean Tirole, John Nash: game theory, John von Neumann, Kenneth Arrow, Kickstarter, late fees, law of one price, libertarian paternalism, Long Term Capital Management, loss aversion, market clearing, Mason jar, mental accounting, meta-analysis, money market fund, More Guns, Less Crime, mortgage debt, Myron Scholes, Nash equilibrium, Nate Silver, New Journalism, nudge unit, Paul Samuelson, payday loans, Ponzi scheme, Post-Keynesian economics, presumed consent, pre–internet, principal–agent problem, prisoner's dilemma, profit maximization, random walk, randomized controlled trial, Richard Thaler, risk free rate, Robert Shiller, Robert Shiller, Ronald Coase, Silicon Valley, South Sea Bubble, Stanford marshmallow experiment, statistical model, Steve Jobs, sunk-cost fallacy, Supply of New York City Cabdrivers, technology bubble, The Chicago School, The Myth of the Rational Market, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, ultimatum game, Vilfredo Pareto, Walter Mischel, zero-sum game
I had recently bought my first iPhone, a device so easy to use that it didn’t need an instruction manual. What if we could design policies that were equally easy to create “user-centered” choice environments? At some point we adopted the term “choice architecture” to describe what we were trying to do. In curious ways, simply having that phrase to organize our thoughts helped us create a checklist of principles for good choice architecture, with many of the ideas borrowed from the human design literature. Designing good public policies has a lot in common with designing any consumer product. Now that we had our new set of tools, one big choice we had to make was which policy issues to try to address with them.
I already mentioned two such papers earlier in the book: Justine Hastings and Jesse Shapiro’s paper on the mental accounting of gasoline, and the paper by Raj Chetty and his team analyzing Danish data on pension saving. Recall that the Chetty team finds that the economic incentive for saving via tax breaks has virtually no effect on behavior. Instead, 99% of the work is done by the choice architecture of the plans, such as the default saving rate—in other words, SIFs. This paper is just one of many in which Chetty and his team of collaborators have found behavioral insights can improve our understanding of public policy. When all economists are equally open-minded and are willing to incorporate important variables in their work, even if the rational model says those variables are supposedly irrelevant, the field of behavioral economics will disappear.
See also World Bank (2015). 353 repeatedly and rigorously tested: See Post et al. (2008) and van den Assem, van Dolder, and Thaler (2012) on game shows, Pope and Schweitzer (2011) on golf, Barberis and Thaler (2003) and Kliger, van den Assem, and Zwinkels (2014) for reviews of behavioral finance, and Camerer (2000) and DellaVigna (2009) for surveys of empirical applications of behavioral economics more generally. 353 intriguing finding by Roland Fryer: Fryer (2010). 354 The team of Fryer, John List, Steven Levitt, and Sally Sadoff: Fryer et al. (2013). 354 a recent randomized control trial: Kraft and Rogers (2014). 355 Field experiments are perhaps the most powerful tool we have: Gneezy and List (2013). 356 “If you don’t write it down, it doesn’t exist”: Ginzel (2014). 356 his recent book The Checklist Manifesto: Gawande (2010), pp. 176–77. 356 Into Thin Air: Krakauer (1997). 357 99% of the work is done by the choice architecture: Another example is Alexandre Mas who (sometimes collaborating with Alan Krueger) has shown that after labor disputes that go badly for workers, the quality of work declines. See Mas (2004) on the value of construction equipment after a dispute, Mas and Krueger (2004) on defects in tires after a strike, and Mas (2006) on police work after arbitration.
Phil Thornton by The Great Economists Ten Economists whose thinking changed the way we live-FT Publishing International (2014)
availability heuristic, Berlin Wall, bitcoin, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, Cass Sunstein, choice architecture, cognitive bias, collapse of Lehman Brothers, Corn Laws, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, double helix, endogenous growth, endowment effect, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, fiat currency, financial deregulation, fixed income, full employment, hindsight bias, income inequality, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Kenneth Arrow, Kenneth Rogoff, Kickstarter, liquidity trap, loss aversion, mass immigration, means of production, mental accounting, Myron Scholes, paradox of thrift, Pareto efficiency, Paul Samuelson, Post-Keynesian economics, price mechanism, pushing on a string, quantitative easing, Richard Thaler, road to serfdom, Ronald Coase, Ronald Reagan, school vouchers, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, Toyota Production System, trade route, transaction costs, unorthodox policies, Vilfredo Pareto, women in the workforce
The EU’s competition authority used behavioural economics in the recent Microsoft competition case when it insisted that its products offered a selection of rival internet browsers as well as Microsoft’s own Explorer. 234 The Great Economists We have seen how Thaler coined the term endowment effect to capture and expand on Kahneman’s finding that people value things more highly once they own them. Thaler, who is a professor of behavioural science and economics at Chicago University, built on the Prospect Theory to devise a positive theory of consumer choice – how people actually make decisions compared with how they should. He coined the phrase choice architecture with law professor Cass Sunstein to describe the way in which decisions may (and can) be influenced by how the choices are presented. Thaler has developed many strands of thinking in behavioural economics, encapsulated in his book written with Sunstein aimed at a mass market, Nudge: improving decisions about health, wealth and happiness, which makes use of Kahneman’s three heuristics.
Index A Theory of Moral Sentiments (Smith, 1759) 2, 5–6 Adelman, Irma 110 American Economic Association 170 An Inquiry into the Nature and Causes of the Wealth of Nations see The Wealth of Nations anarchism 156 apartheid system in South Africa 199 Ariely, Dan 234 Arrow, Kenneth 191, 213 AT&T 22 austerity versus stimulus debate 43–4, 140–1 Austrian School of Economics 121–2 autarky concept 184 bank bailouts in the financial crisis 162 Bank of England 161 Barro, Robert 43 Barro-Ricardo equivalence 43–4 Becker, Gary (1930– ) 193–216 approach to human behaviour 212–15 building human capital 200–2, 210 early life and influences 195–7 economic perspective on discrimination 196–7, 198–9 Economics of Discrimination (1957) 196–7, 198–9 economics of the family 213–15 family decision making 203–6 key economic theories and writings 197–212 long-term impact 212–15 new home economics 203–6 Nobel Prize (1992) 194, 195–6 on crime and punishment 207–10 on drug addiction 210–12, 215 rational choice model 197, 212– 15, 216 verdict 215–16 Becker–Posner Blog 215 behavioural economics 218–19, 233–6 Bentham, Jeremy 31, 181 Bergmann, Barbara 206 Bergson, Abram 182 Bergson–Samuelson social welfare function 182–3 Bernanke, Ben 77, 159, 162 Bernoulli, Daniel 229 bias in decision making 222–5 in financial decision making 225–32 Bitcoin currency 138 Black, Fischer 187 Blinder, Alan 215 Bloomsbury Group 94 Blunt, Anthony 94 boom and bust cycles see business cycles Bretton Woods agreement 95, 108–9 Brown, Gordon 3, 42 Burgess, Guy 94 Burns, Arthur F. 147 Bush, George H.W. 139 business cycles 57, 65 Hayek’s explanation 123–6 Samuelson’s oscillator model 174–5 Butler, Eamonn 162 Cambridge School of economics 74, 86 Cambridge spy ring 94 capital flow controls 113 capital-intensive goods, effects of increase in wages 33 capitalism exploitation of the working class (Marx) 56–8, 62–3 Index239 ‘fictitious capital’ concept (Marx) 62 seeds of its own downfall (Marx) 56–8, 61–3 capitalist production process (Marx) 54–6 Carlyle, Thomas 33 cartels evil of 10–11 regulation to prevent 21–2 central banks control of economic activity 161 over-expansion of credit 123–4 central state planning, Hayek’s opposition to 134–6, 140 certainty effect 229, 230 ceteris paribus approach to economic analysis 79–80 Chapman, Bruce 19 Chicago School of economic thought 146, 160, 194 China savings and investment imbalance with the US 113 trade imbalance with the US 45 choice architecture 234 Churchill, Winston 98 classical economics 40, 54 Coase, Ronald 73 cognitive biases (Kahneman) 222–5 communism 19, 50 Communist Manifesto (Marx and Engels) 52, 58–61 company bailouts in the financial crisis 162 comparative advantage 35–8, 183–4 complex adaptive systems, science of 138 complex financial products 61–2, 187 computer-games-based money 138 confirmation bias 227 consumer demand marginal rate of substitution 180 revealed preference theory 180–1 consumption smoothing concept 149, 163 Corn Laws, attack by Ricardo 33–5 costs of production, relationship to value 75–7 credit expansion, as a driver of boom and bust cycles 123–4 crime and punishment, views of Becker 207–10 Darling, Alistair 112 Das Kapital (Marx) 52, 53–4, 59–61, 62, 67–8 decision making biases and errors in financial decisions 225–32 heuristics and bias in 222–5 Prospect Theory (Kahneman) 228–32, 234 under risk 228–32 demand side economics 127 depression Keynesian interventionist view 92–3, 94, 105–6 see also Great Depression (1930s) dialectic style of analysis 52, 54 Diamond, Peter 179 diminishing marginal utility 82 discrimination economic perspective of Becker 196–7, 198–9 views of Friedman 157 distribution of economic value (Marx) 54–6 division of labour and productivity 11–14 car production 20–1 in daily life 20–1 divorce rates 205 drug addiction, views of Becker 210–12, 215 Dubner, Stephen 234 Eastern Europe, influence of Hayek 140 Ebenstein, Larry 158 Economics: An Introductory Analysis (Samuelson, 1948) 168, 171–3, 188–9 Economics of Discrimination (Becker, 1957) 196–7, 198–9 Efficient Market theory 111, 112, 187 240Index elasticity of demand 82–4 Elizabeth II, Queen 158 emerging markets, offshoring of jobs to 41 endogenous growth 202 endowment effect 232, 234 Engels, Friedrich 52, 58–61 ethical judgements in economics 182–3 European Central Bank 161 exchange rates, impact of trade on 185–6 expected utility theory (EUT) 228, 229–30, 232 externalities 85 factor price equalisation theorem 186–7 Fama, Eugene 160, 187 family decision making economic perspective 183, 203–6, 213–15 welfare decision making 183 fiat currency 152 ‘fictitious capital’ concept (Marx) 62 financial decision making, biases and errors in 225–32 financial economics, work of Samuelson 187 First World War 95 Folbre, Nancy 206 Ford Model-T car, assembly-line production system 21 Foundations of Economic Analysis (Samuelson, 1947) 168, 169–70 Fox, Charles James 23 Freakonomics (Levitt and Dubner) 234 free-market mechanism of supply and demand 8–9 free market system view of Adam Smith 13–14, 16–18 view of Hayek 131–3 view of Friedman 155–7 free rider problem in public goods 177–8 Free to Choose (Friedman and Friedman, 1980) 158 free trade, influence of Adam Smith 22–3 Freeman, Richard 201 frictional unemployment 155 Friedman, David 156 Friedman, Milton (1912–2006) 94, 110, 145–64, 190–1, 196 advocate of the free market 155–7 belief in individualism 155–7 criticism of Keynesianism 149–50 early life and influences 147–8 economics in action 160–3 fiat currency 152 Free to Choose (1980 ) 158 influence of the Great Depression (1930s) 148 influence on modern economic theory 158–60 limited role of government in the economy 152, 155–7 long-term legacy 157–63 monetarism 151–2 monetarist rule 152 monetary policy 151–2 ‘natural’ rate of unemployment 153–5 new explanation for the Great Depression 150–1 Nobel Prize in economics (1976) 146, 147–8, 154, 161 non-accelerating inflation of unemployment (NAIRU) 153–5 permanent income hypothesis 148–50 role of money supply in the economy 151–2 verdict 163–4 Friedman, Rose (formerly Rose Director) 147, 148, 157, 158, 160 FTSE-listed plcs 86 Funk, Walter 108 Funk Plan 108 Galbraith, J.K. 159 gambler’s fallacy (misconception of chance) 224 General Agreement on Tariffs and Trade (GATT) 40 Index241 general equilibrium theory 8 genetically modified foods 42 geographical effects in economics 84–6 Giffen goods 84 global financial crisis (2007–8) 92, 174 and Keynesianism 111–13 global stimulus package 113 Marxist view 61–3 global free trade influence of Adam Smith 22–3 influence of Ricardo 40–2 global public goods 177–8 global recession (2009) see Great Recession (2009) gold standard, criticism by Keynes 95, 98, 107 government debt and the Great Recession (2009) 43 taxpayer view of (Ricardo) 38–9 government role in the economy anti-central planning view of Hayek 134–6, 140 Keynesian view 92–3, 94, 105–6 view of Adam Smith 9, 10, 16–18 view of Friedman 152, 155–7 Great Crash (1929) 98, 99 Great Depression (1930s) 19, 22–3, 85, 92 explanation of Friedman and Schwartz 150–1 influence on Friedman 148 influence on Keynes 99–100 role of the Federal Reserve 159 Great Recession (2009) 23 and government debt 43 arguments against protectionism 42 austerity versus stimulus debate 43–4, 140–1 Greece, sovereign debt crisis 113–14 Greenspan, Alan 111–12, 235 Grossman, Michael 212 Hansen, Lars Peter 160 Hayek, Friedrich (1899–1992) 110, 111, 119–42 business cycle theory 123–6 clash with Keynes 120, 126–31 collapse of the Soviet Union 140 early life and influences 120 emphasis on individual freedom 134–6, 140 explanation for boom and bust cycles 123–6 First World War 121 focus on supply side economics 127 influence in Eastern Europe 140 influence on George H.W.
The Undoing Project: A Friendship That Changed Our Minds by Michael Lewis
Albert Einstein, availability heuristic, Cass Sunstein, choice architecture, complexity theory, Daniel Kahneman / Amos Tversky, Donald Trump, Douglas Hofstadter, endowment effect, feminist movement, framing effect, hindsight bias, John von Neumann, Kenneth Arrow, loss aversion, medical residency, Menlo Park, Murray Gell-Mann, Nate Silver, New Journalism, Paul Samuelson, Richard Thaler, Saturday Night Live, Stanford marshmallow experiment, statistical model, the new new thing, Thomas Bayes, Walter Mischel, Yom Kippur War
Millions of U.S. corporate and government employees had woken up one day during the 2000s and found they no longer needed to enroll themselves in retirement plans but instead were automatically enrolled. They probably never noticed the change. But that alone caused the participation in retirement plans to rise by roughly 30 percentage points. Such was the power of choice architecture. One tweak to the society’s choice architecture made by Sunstein, once he’d gone to work in the U.S. government, was to smooth the path between homeless children and free school meals. In the school year after he left the White House, about 40 percent more poor kids ate free school lunches than had done so before, back when they or some adult acting on their behalf had to take action and make choices to get them
Sunstein argued that the government needed, alongside its Council of Economic Advisers, a Council of Psychological Advisers. He wasn’t alone. By the time Sunstein left the White House, in 2015, calls for a greater role for psychologists, or at any rate for psychological insight, were coming from inside governments across the world. Sunstein was particularly interested in what was now being called “choice architecture.” The decisions people made were driven by the way they were presented. People didn’t simply know what they wanted; they took cues from their environment. They constructed their preferences. And they followed paths of least resistance, even when they paid a heavy price for it. Millions of U.S. corporate and government employees had woken up one day during the 2000s and found they no longer needed to enroll themselves in retirement plans but instead were automatically enrolled.
The Costs of Connection: How Data Is Colonizing Human Life and Appropriating It for Capitalism by Nick Couldry, Ulises A. Mejias
"side hustle", 23andMe, Airbnb, Amazon Mechanical Turk, Amazon Web Services, British Empire, call centre, Cass Sunstein, choice architecture, cloud computing, colonial rule, computer vision, corporate governance, dark matter, data acquisition, data is the new oil, different worldview, discovery of the americas, disinformation, diversification, Edward Snowden, en.wikipedia.org, European colonialism, gig economy, global supply chain, Google Chrome, Google Earth, hiring and firing, income inequality, independent contractor, information asymmetry, Infrastructure as a Service, intangible asset, Internet of things, Jaron Lanier, job automation, Kevin Kelly, late capitalism, lifelogging, linked data, Marc Andreessen, Mark Zuckerberg, means of production, move fast and break things, move fast and break things, multi-sided market, Naomi Klein, Network effects, new economy, New Urbanism, PageRank, pattern recognition, payday loans, Philip Mirowski, profit maximization, Ray Kurzweil, RFID, Richard Stallman, Richard Thaler, Scientific racism, Second Machine Age, sharing economy, Shoshana Zuboff, Silicon Valley, Slavoj Žižek, smart cities, Snapchat, social graph, social intelligence, software studies, sovereign wealth fund, surveillance capitalism, The Future of Employment, the scientific method, Thomas Davenport, Tim Cook: Apple, trade liberalization, trade route, undersea cable, urban planning, wages for housework
New urban environments will emerge, such as the proposal by Google’s Sidewalk Labs for downtown Toronto’s waterfront district, built on personalization (“really smart, people-centered urban planning”) and iron corporate control of the “intelligent signals” generated by a datafied environment.201 To have a chance of resisting this, we must hold onto earlier forms of social knowledge: voice, public accountability and the public value of social understanding, visibility rather than opacity, contextual social explanation, and above all a concern with the role of these values in challenging injustice. Recall that the whole trajectory of data colonialism started out from the banal fact that to function, computers must capture data about their changes of state.202 It is a curious irony that B. J. Fogg, a leading developer of unconscious behavioral influence through online choice architectures, named his new science of intervention “captology.”203 Knowledge by capture, influence by appropriation. When the cutting edge of social knowledge is a tool kit for achieving power at scale (or what Walmart more comfortingly calls “personalization at scale”),204 then the stakes of the social-knowledge game just got higher and its potential contribution to social justice more tenuous.
Jean-Francois Lyotard, in a book that noted the rise of information technologies and data, hinted at this possibility already in 1991: “What if what is ‘proper’ to human kind were to be inhabited by the inhuman” (Lyotard, Inhuman, 2)? 10. For a discussion of different more or less minimal notions of autonomy, see Yeung, “Choice Architecture.” A strong notion of autonomy as self-control might be vulnerable to the argument that we already know there is a degree of arbitrariness in our so-called “inner” selves, a point that both Nietzsche and Freud developed. True, it can be argued, following Ricoeur (Freud and Philosophy), that the point of psychoanalysis was to expand the domain of what, finally, is open to interpretation as one’s own within the process of the self (compare also Honneth, I in We, chap. 11).
“China Pours Millions into Facial Recognition Start-Up Face++.” Financial Times, November 1, 2017. Yang, Yuan, and Yingzhi Yang. “Smile to Enter: China Embraces Facial-Recognition Technology.” Financial Times, June 7, 2017. Yegenoglu, Meyda. Colonial Fantasies. Cambridge, UK: Cambridge University Press, 1998. Yeung, Karen. “The Forms and Limits of Choice Architecture as a Tool of Government.” Law & Police 38, no. 3 (2016): 186–210. . “‘Hypernudge’: Big Data as a Mode of Regulation by Design.” Information Communication and Society 20, no. 1 (2017): 118–36. Yong, Ed. I Contain Multitudes. New York: Vintage, 2016. Young, Robert. Postcolonialism: An Historical Introduction.
The Unbanking of America: How the New Middle Class Survives by Lisa Servon
Affordable Care Act / Obamacare, Airbnb, basic income, Build a better mousetrap, business cycle, Cass Sunstein, choice architecture, creative destruction, Credit Default Swap, employer provided health coverage, financial exclusion, financial independence, financial innovation, gender pay gap, George Akerlof, gig economy, income inequality, independent contractor, informal economy, Jane Jacobs, Joseph Schumpeter, late fees, Lyft, M-Pesa, medical bankruptcy, microcredit, Occupy movement, payday loans, peer-to-peer lending, precariat, Ralph Nader, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, Savings and loan crisis, sharing economy, too big to fail, transaction costs, unbanked and underbanked, underbanked, universal basic income, Unsafe at Any Speed, We are the 99%, white flight, working poor, Zipcar
The situation she found herself in—choosing between taking out payday loans or losing her job—overrode her knowledge; as she told me, “I know it’s bad.” The upside of this finding is that the effect of context on decision making is predictable. We can find ways to protect people at vulnerable moments. The way choices are presented—what the economists Richard Thaler and Cass Sunstein call “choice architecture”—is also critical to making a good decision. Employee enrollment in retirement plans provides a good illustration. When a worker is lucky enough to get a job that includes a retirement plan, she must usually make several decisions—whether to participate, how much to contribute, how to allocate contributions across different investments.
Luke Shaefer, $2.00 a Day: Living on Almost Nothing in America (New York: Houghton Mifflin Harcourt, 2015). 167 a strong safety net: Michael S. Barr, Sendhil Mullainathan, and Eldar Shafir, “Behaviorally Informed Regulation,” in No Slack: The Financial Lives of Low-Income Americans, edited by Michael S. Barr (Washington, DC: Brookings Institution Press, 2012). 169 “choice architecture”: Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven, CT: Yale University Press, 2008). simply changing the default option: John Beshears et al., “The Importance of Default Options for Retirement Savings Outcomes: Evidence from the United States,” NBER Working Paper No. 12009 (Cambridge, MA: National Bureau of Economic Research, February 2006).
Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones by James Clear
"side hustle", Atul Gawande, Cal Newport, Checklist Manifesto, choice architecture, clean water, cognitive dissonance, delayed gratification, deliberate practice, en.wikipedia.org, financial independence, invisible hand, Lao Tzu, late fees, meta-analysis, microaggression, Paul Graham, randomized controlled trial, ride hailing / ride sharing, Sam Altman, Saturday Night Live, survivorship bias, Walter Mischel, When a measure becomes a target
The habit stacking formula is: After [CURRENT HABIT], I will [NEW HABIT]. 6 Motivation Is Overrated; Environment Often Matters More ANNE THORNDIKE, A primary care physician at Massachusetts General Hospital in Boston, had a crazy idea. She believed she could improve the eating habits of thousands of hospital staff and visitors without changing their willpower or motivation in the slightest way. In fact, she didn’t plan on talking to them at all. Thorndike and her colleagues designed a six-month study to alter the “choice architecture” of the hospital cafeteria. They started by changing how drinks were arranged in the room. Originally, the refrigerators located next to the cash registers in the cafeteria were filled with only soda. The researchers added water as an option to each one. Additionally, they placed baskets of bottled water next to the food stations throughout the room.
You can learn more about Fogg’s work and his Tiny Habits Method at https://www.tinyhabits.com. “One in, one out”: Dev Basu (@devbasu), “Have a one-in-one-out policy when buying things,” Twitter, February 11, 2018, https://twitter.com/devbasu/status/962778141965000704. CHAPTER 6 Anne Thorndike: Anne N. Thorndike et al., “A 2-Phase Labeling and Choice Architecture Intervention to Improve Healthy Food and Beverage Choices,” American Journal of Public Health 102, no. 3 (2012), doi:10.2105/ajph.2011.300391. choose products not because of what they are: Multiple research studies have shown that the mere sight of food can make us feel hungry even when we don’t have actual physiological hunger.
The Age of Surveillance Capitalism by Shoshana Zuboff
algorithmic bias, Amazon Web Services, Andrew Keen, augmented reality, autonomous vehicles, barriers to entry, Bartolomé de las Casas, Berlin Wall, bitcoin, blockchain, blue-collar work, book scanning, Broken windows theory, California gold rush, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, choice architecture, citizen journalism, cloud computing, collective bargaining, Computer Numeric Control, computer vision, connected car, corporate governance, corporate personhood, creative destruction, cryptocurrency, disinformation, dogs of the Dow, don't be evil, Donald Trump, Edward Snowden, en.wikipedia.org, Erik Brynjolfsson, facts on the ground, Ford paid five dollars a day, future of work, game design, Google Earth, Google Glasses, Google X / Alphabet X, hive mind, Ian Bogost, impulse control, income inequality, Internet of things, invention of the printing press, invisible hand, Jean Tirole, job automation, Johann Wolfgang von Goethe, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, knowledge economy, linked data, longitudinal study, low skilled workers, Mark Zuckerberg, market bubble, means of production, multi-sided market, Naomi Klein, natural language processing, Network effects, new economy, Occupy movement, off grid, PageRank, Panopticon Jeremy Bentham, pattern recognition, Paul Buchheit, performance metric, Philip Mirowski, precision agriculture, price mechanism, profit maximization, profit motive, recommendation engine, refrigerator car, RFID, Richard Thaler, ride hailing / ride sharing, Robert Bork, Robert Mercer, Second Machine Age, self-driving car, sentiment analysis, shareholder value, Shoshana Zuboff, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, slashdot, smart cities, Snapchat, social graph, social web, software as a service, speech recognition, statistical model, Steve Bannon, Steve Jobs, Steven Levy, structural adjustment programs, surveillance capitalism, The Future of Employment, The Wealth of Nations by Adam Smith, Tim Cook: Apple, two-sided market, union organizing, Watson beat the top human players on Jeopardy!, winner-take-all economy, Wolfgang Streeck, Yochai Benkler, you are the product
It may involve subliminal cues designed to subtly shape the flow of behavior at the precise time and place for maximally efficient influence. Another kind of tuning involves what behavioral economists Richard Thaler and Cass Sunstein call the “nudge,” which they define as “any aspect of a choice architecture that alters people’s behavior in a predictable way.”1 The term choice architecture refers to the ways in which situations are already structured to channel attention and shape action. In some cases these architectures are intentionally designed to elicit specific behavior, such as a classroom in which all the seats face the teacher or an online business that requires you to click through many obscure pages in order to opt out of its tracking cookies.
Thus gambling devices could be ‘improved’—from the point of view of the proprietor—by introducing devices which would pay off on a variable-interval basis, but only when the rate of play is exceptionally high.”63 Technologies of behavioral engineering would not be restricted to “devices” but would also encompass organizational systems and procedures designed to shape behavior toward specific ends. In 1953 Skinner anticipated innovations such as Michael Jensen’s incentive systems designed to maximize shareholder value and the “choice architectures” of behavioral economics designed to “nudge” behavior along a preferred path: “Schedules of pay in industry, salesmanship, and the professions, and the use of bonuses, incentive wages, and so on, could also be improved from the point of view of generating maximal productivity.”64 Skinner understood that the engineering of behavior risked violating individual sensibilities and social norms, especially concerns about privacy.
See also adolescence chilling effect, 472; and extended chilling effect, 472, 489 China: conflation of instrumentarian and authoritarian power in, 389, 393–394; crisis of social trust in, 389–390; funding Pentland’s research lab, 417; Shenzhen trade show and surveillance technology industry, 393–394, 395; Skinner’s views on, 443; social credit system in, 388–394; use of location data in, 246 China Daily, 391 chips, 189, 245, 289, 392 choice architectures, 294, 370 Chomsky, Noam, 323, 441 Choudhury, Tanzeem, 419, 420 Chrome browser, 400, 487 CIA (Central Intelligence Agency), 114, 116, 117, 321–322 Cisco, 227, 264, 417 Cisco Kinetic, 227–228 cities, 227–232 civil society organizations, 126 Clapper, James, 387 click-through rates, 76, 82, 83–84, 95–96, 277 click-wrap agreements, 48–50, 108 climate, sensors of, 206 climate change, 126, 346 cloud, the: Google’s, 188, 218; and human relationships, 410; and machine relations, 408; Microsoft’s, 400 Cohen, Jared, 103, 223 Cohen, Leonard, 255 cold war, 108, 320–321 collaboration: and contractual agreements, 333, 334, 335–336, 337; and social pressure, 435–436 collective action: confluence as new form of, 409, 413; and contractual agreements, 333; needed to challenge asymmetries of knowledge and power, 344–345, 485–486, 520–525 collective decision making, 407, 432–433 collective mind.
Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society by Will Hutton
Andrei Shleifer, asset-backed security, bank run, banking crisis, Bear Stearns, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, Bretton Woods, business cycle, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, debt deflation, decarbonisation, Deng Xiaoping, discovery of DNA, discovery of the americas, discrete time, disinformation, diversification, double helix, Edward Glaeser, financial deregulation, financial innovation, financial intermediation, first-past-the-post, floating exchange rates, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, Hyman Minsky, I think there is a world market for maybe five computers, income inequality, inflation targeting, interest rate swap, invisible hand, Isaac Newton, James Dyson, James Watt: steam engine, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liberal capitalism, light touch regulation, Long Term Capital Management, long term incentive plan, Louis Pasteur, low cost airline, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, mass immigration, means of production, Mikhail Gorbachev, millennium bug, Money creation, money market fund, moral hazard, moral panic, mortgage debt, Myron Scholes, Neil Kinnock, new economy, Northern Rock, offshore financial centre, open economy, Plutocrats, plutocrats, price discrimination, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, railway mania, random walk, rent-seeking, reserve currency, Richard Thaler, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, Rory Sutherland, Satyajit Das, Savings and loan crisis, shareholder value, short selling, Silicon Valley, Skype, South Sea Bubble, Steve Jobs, tail risk, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, unpaid internship, value at risk, Vilfredo Pareto, Washington Consensus, wealth creators, working poor, zero-sum game, éminence grise
In any case more feedback about our decision is so opaque that pinning down precisely what went wrong is like finding a needle in a haystack.16 This severely weakens the theorems that suggest that markets are naturally self-organising with an embedded tendency to reach optimal outcomes. But it opens up a more realistic world of imperfect decision-making that can be improved by smart interventions if we choose. The task becomes creation – usually by the government – of a ‘choice architecture’ that respects choice but guides individuals to exercise it rationally. The answer to individuals being myopic about saving, for example, is to set up schemes into which they are automatically contracted but from which they are free to exit, if they so choose. Nor is it just a question of providing information to buyers and sellers; it must be provided in a digestible, assimilable and understandable way.
There is a need to distinguish between biases insofar as the policy responses to the underlying explanations for behaviour point in very different directions. 16 John Sterman (2000) Business Dynamics: Systems Thinking and Modeling for a Complex World, Irwin McGraw-Hill. 17 Richard Thaler and Cass Sunstein (2008) Nudge: Improving Decisions about Health, Wealth and Happiness, Yale University Press, esp. Part V. See also Jack Fuller (2009) ‘Heads, You Die: Bad Decisions, Choice Architecture, and How to Mitigate Predictable Irrationality’, Per Capita, at http://www.percapita.org.au/01_cms/details.asp?ID=215. 18 Friedrich Hayek (1945) ‘The Use of Knowledge in Society’, American Economic Review 34 (4): 519–30, at http://www.econlib.org/library/Essays/ hykKnw1.html. 19 Herbert Hart (1997) The Concept of Law, Oxford University Press. 20 HM Treasury (2007) ‘The Race to the Top: A Review of Government’s Science and Innovation Policies’, HMSO. 21 Yannis Pierrakis and Stian Westlake (2009) ‘Reshaping the UK Economy: The Role of Public Investment in Financing Growth’, report, Nesta. 22 Ibid. 23 John R.
., 64, 65 Rowthorn, Robert, 292, 363 Royal Bank of Scotland (RBS), 25, 150, 152, 157, 173, 181, 199, 251, 259; collapse of, 7, 137, 150, 158, 175–6, 202, 203, 204; Sir Fred Goodwin and, 7, 150, 176, 340 Rubin, Robert, 174, 177, 183 rule of law, x, 4, 220, 235 Russell, Bertrand, 189 Russia, 127, 134–5, 169, 201, 354–5, 385; fall of communism, 135, 140; oligarchs, 30, 65, 135 Rwandan genocide, 71 Ryanair, 233 sailing ships, three-masted, 108 Sandbrook, Dominic, 22 Sands, Peter (CEO of Standard Chartered Bank), 26 Sarkozy, Nicolas, 51, 377 Sassoon, Sir James, 178 Scholes, Myron, 169, 191, 193 Schumpeter, Joseph, 62, 67, 111 science and technology: capitalist dynamism and, 27–8, 31, 112–13; digitalisation, 34, 231, 320, 349, 350; the Enlightenment and, 31, 108–9, 112–13, 116–17, 121, 126–7; general-purpose technologies (GPTs), 107–11, 112, 117, 126–7, 134, 228–9, 256, 261, 384; increased pace of advance, 228–9, 253, 297; nanotechnology, 232; New Labour improvements, 21; new opportunities and, 33–4, 228–9, 231–3; new technologies, 232, 233, 240; universities and, 261–5 Scotland, devolving of power to, 15, 334 Scott, James, 114–15 Scott Bader, 93 Scott Trust, 327 Second World War, 134, 313 Securities and Exchanges Commission, 151, 167–8 securitisation, 32, 147, 165, 169, 171, 186, 187, 196 self-determination, 85–6 self-employment, 86 self-interest, 59, 60, 78 Sen, Amartya, 51, 232, 275 service sector, 8, 291, 341, 355 shadow banking system, 148, 153, 157–8, 170, 171, 172, 187 Shakespeare, William, 39, 274, 351 shareholders, 156, 197, 216–17, 240–4, 250 Sher, George, 46, 50, 51 Sherman Act (USA, 1890), 133 Sherraden, Michael, 301 Shiller, Robert, 43, 298, 299 Shimer, Robert, 299 Shleifer, Andrei, 62, 63, 92 short selling, 103 Sicilian mafia, 101, 105 Simon, Herbert, 222 Simpson, George, 142–3 single mothers, 17, 53, 287 sixth form education, 306 Sky (broadcasting company), 30, 318, 330, 389 Skype, 253 Slim, Carlos, 30 Sloan School of Management, 195 Slumdog Millionaire, 283 Smith, Adam, 55, 84, 104, 112, 121, 122, 126, 145–6 Smith, John, 148 Snoddy, Ray, 322 Snow, John, 177 social capital, 88–9, 92 social class, 78, 130, 230, 304, 343, 388; childcare and, 278, 288–90; continued importance of, 271, 283–96; decline of class-based politics, 341; education and, 13, 17, 223, 264–5, 272–3, 274, 276, 292–5, 304, 308; historical development of, 56–8, 109, 115–16, 122, 123–5, 127–8, 199; New Labour and, 271, 277–9; working-class opinion, 16, 143 social investment, 10, 19, 20–1, 279, 280–1 social polarisation, 9–16, 34–5, 223, 271–4, 282–5, 286–97, 342; Conservative reforms (1979-97) and, 275–6; New Labour and, 277–9; private education and, 13, 223, 264–5, 272–3, 276, 283–4, 293–5, 304; required reforms for reduction of, 297–309 social security benefits, 277, 278, 299–301, 328; contributory, 63, 81, 283; flexicurity social system, 299–301, 304, 374; to immigrants, 81–2, 282, 283, 284; job seeker’s allowance, 81, 281, 298, 301; New Labour and ‘undeserving’ claimants, 143, 277–8; non-contributory, 63, 79, 81, 82; targeting of/two-tier system, 277, 281 socialism, 22, 32, 38, 75, 138, 144, 145, 394 Soham murder case, 10, 339 Solomon Brothers, 173 Sony, 254–5 Soros, George, 166 Sorrell, Martin, 349 Soskice, David, 342–3 South Korea, 168, 358–9 South Sea Bubble, 125–6 Spain, 123–4, 207, 358–9, 371, 377 Spamann, Holger, 198 special purpose vehicles, 181 Spitzer, Matthew, 60 sport, cheating in, 23 stakeholder capitalism, x, 148–9 Standard Oil, 130–1, 132 state, British: anti-statism, 20, 22, 233–4, 235, 311; big finance’s penetration of, 176, 178–80; ‘choice architecture’ and, 238, 252; desired level of involvement, 234–5; domination of by media, 14, 16, 221, 338, 339, 343; facilitation of fairness, ix–x, 391–2, 394–5; investment in knowledge, 28, 31, 40, 220, 235, 261, 265; need for government as employer of last resort, 300; need for hybrid financial system, 244, 249–52; need for intervention in markets, 219–22, 229–30, 235–9, 252, 392; need for reshaping of, 34; pluralism, x, 35, 99, 113, 233, 331, 350, 394; public ownership, 32, 240; target-setting in, 91–2; threats to civil liberty and, 340 steam engine, 110, 126 Steinmueller, W.
The Impulse Society: America in the Age of Instant Gratification by Paul Roberts
2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, asset allocation, business cycle, business process, Cass Sunstein, centre right, choice architecture, collateralized debt obligation, collective bargaining, computerized trading, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, David Brooks, delayed gratification, disruptive innovation, double helix, factory automation, financial deregulation, financial innovation, fixed income, full employment, game design, greed is good, If something cannot go on forever, it will stop - Herbert Stein's Law, impulse control, income inequality, inflation targeting, invisible hand, job automation, John Markoff, Joseph Schumpeter, knowledge worker, late fees, Long Term Capital Management, loss aversion, low skilled workers, mass immigration, new economy, Nicholas Carr, obamacare, Occupy movement, oil shale / tar sands, performance metric, postindustrial economy, profit maximization, Report Card for America’s Infrastructure, reshoring, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Rodney Brooks, Ronald Reagan, shareholder value, Silicon Valley, speech recognition, Steve Jobs, technoutopianism, the built environment, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, Walter Mischel, winner-take-all economy
Walter Mischel, the researcher behind the famous “marshmallow study” from the 1970s, has developed effective strategies to train impatient children to be patient—an important success, given that impatient children have a high likelihood of growing up to be impatient adults.14 There are other potentially fruitful ventures, such as what Richard Thaler (of the two-self model) and coauthor Cass Sunstein call “choice architecture.” The term refers to carefully designed technologies, infrastructure, and other pieces of the built environment that subtly “nudge” us to act with more patience and long-term thought. An example: smartphone apps that automatically track our daily expenses and warn us when we’re exceeding our budget.
Only by breaking rules do we discover who we are.”15) Or consider the growing research showing that myopia and short-termism actually increase when we’re uncertain about the future—something our new economic model seems to have made more likely. Further, some of the most troubling myopia occurs not at the consumer level, where “choice architecture” or nudges might have some positive effect, but at the institutional level, in government and especially in business. In many industries, today’s senior managers wield an increasingly impressive set of tools, technologies, and other capabilities that can deliver ever-faster returns. Yet not only do these managers face the same inclination to discount future costs, but they also operate in a corporate culture that itself is increasingly limbic and shortsighted.
#Republic: Divided Democracy in the Age of Social Media by Cass R. Sunstein
A Declaration of the Independence of Cyberspace, affirmative action, Affordable Care Act / Obamacare, Bernie Sanders, Cass Sunstein, choice architecture, Donald Trump, drone strike, Erik Brynjolfsson, Filter Bubble, friendly fire, global village, illegal immigration, immigration reform, income inequality, Jane Jacobs, loss aversion, Mark Zuckerberg, obamacare, prediction markets, road to serfdom, Ronald Reagan, Silicon Valley, Skype, Snapchat, stem cell, The Chicago School, The Death and Life of Great American Cities, The Wisdom of Crowds, WikiLeaks, Yochai Benkler
I do not suggest that government should force people to see things that they wish to avoid. But I do contend that in a democracy deserving the name, lives—including digital ones—should be structured so that people frequently come across views and topics that they have not specifically selected. That kind of structuring is, in fact, a form of choice architecture from which individuals and groups greatly benefit. Here, then, is my plea for serendipity. Second, many or most citizens should have a wide range of common experiences. Without shared experiences, a heterogeneous society will have a much more difficult time addressing social problems. People may even find it hard to understand one another.
., 93–94, 104 campaign finance, 193–94 Carnegie, Dale, 160 CBS, 19, 152, 179–81, 185, 197–98, 228 censorship: authoritarianism and, 11; China and, 160–62; citizens and, 160–61, 164; regulation and, 6, 11, 34, 160–61, 164, 200, 208, 246, 248, 256, 261 CERN (European Organization for Nuclear Research), 183 chance encounters, 7–8, 19, 24, 32 Chechnya, 239 checks and balances, 11, 46–47, 51 Chicago school of economics, 151 child-support issues, 133 China, ix, 63, 107, 137, 139, 159–62 choice architecture, 7 Christians, 185 citizens: behavior and, 160–62, 167–68; bias and, 169; Bill of Rights and, 50–52; Colorado experiment and, 68–70, 77; communications and, 157–60, 163–64, 166, 168–70, 175; conservatives and, 162; constitutional doctrine and, 157; consumers and, 25, 115–16, 157–62, 166–75, 223, 231, 256–59; crime and, 172; deliberative democracy and, 169; discrimination and, 167, 175; echo chambers and, 163; education and, 167, 170; Facebook and, 163; filtering and, 157; freedom of speech and, 159, 164; general-interest intermediaries and, 166; Internet and, 158, 160, 164, 169, 171–74; judgment and, 167, 169–70; limited options and, 164–67, 174; majority rule and, 169–70; must-carry rules and, 215, 226–29; preferences and, 157–60, 162–70, 174–75; producers and, 171; public forums and, 13, 34–44, 58, 84, 88, 142, 156, 166, 204–5, 226–27, 256–57, 267; radio and, 165–66; shared experiences and, 158; social media and, 157, 160–65, 168; television and, 158, 165–66, 169, 173; terrorism and, 163; Twitter and, 162, 166; unanimity and, 169–70 Citizens United case, 193–94 civic virtue, 5, 23, 46, 260 civility, 217–18 climate change: cybercascades and, 97, 107, 127–31; environmental issues and, 1, 3–4, 7, 9, 11, 35, 42, 57, 67, 74, 96–97, 99, 107, 127–31, 217; global warming and, 68–69, 88, 217; greenhouse gases and, 9, 127, 130–32, 218 Clinton, Bill, 104, 109 Clinton, Hillary, 15, 59, 75, 117 CNN, 62, 64–65, 115, 126, 228–29 Cole, Benjamin, 237 Cole, Jon, 237 Colorado experiment, 68–70, 77 commercial speech, 193, 205, 207 common experiences, 7, 34, 140–41, 144–45, 147, 214, 254 communications: advertising and, 28 (see also advertising); baseline for, 23–24: citizens and, 157–60, 163–64, 166, 168–70, 175; consumer sovereignty and, 260; curation and, 1; cybercascades and, 119, 134–35; deliberative democracy and, 228; disclosure policies and, 215, 218–23; diversity and, 18, 23, 214; evaluating market of, 53–54; fairness doctrine and, 84–85, 207, 221, 227; FCC and, 84, 179, 198, 219–20, 227; fewer shared experiences and, 144–46; filtering and, 6, 28 (see also filtering); forms of neutrality and, 207–10; fragmentation and, 5, 7, 11, 13, 16, 23, 51, 57, 64, 77, 83–86, 98, 140–41, 146, 149, 151–55, 213, 221, 230, 253, 259, 266n14; freedom of speech and, 193–98, 204, 207, 209; free society and, 18; future of, 261; gated, 8; improving, 214–15, 219–20, 223, 226–28; Internet and, 19 (see also Internet); Jacobs on, 12–13; legal issues and, 177–79, 220, 227; manipulation and, 17, 28–29, 95, 164; mass media and, 19 (see also mass media); must-carry rules and, 226–29; net neutrality and, 29; opposing viewpoints and, 71, 84, 207, 215, 231–33, 255; overload and, 63–68; personalized market for, 1, 155–56, 257, 259; plethora of options in, 5; polarization and, 25, 60, 63–64, 70, 75, 84–86, 89–92; politics and, 54; President’s Advisory Committee on the Public Interest Obligations of Digital Television Broadcasters and, 196–98; producers and, 28, 215; public forums and, 13, 34–44, 58, 84, 88, 142, 156, 166, 204–5, 226–27, 256–57, 267; Putnam on, 267n2; Red Lion Broadcasting v.
Rationality: What It Is, Why It Seems Scarce, Why It Matters by Steven Pinker
affirmative action, Albert Einstein, autonomous vehicles, availability heuristic, Ayatollah Khomeini, backpropagation, basic income, butterfly effect, Cass Sunstein, choice architecture, clean water, coronavirus, correlation coefficient, correlation does not imply causation, Covid-19, COVID-19, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Attenborough, delayed gratification, disinformation, Donald Trump, effective altruism, en.wikipedia.org, Erdős number, Estimating the Reproducibility of Psychological Science, feminist movement, framing effect, George Akerlof, germ theory of disease, high batting average, index card, Jeff Bezos, job automation, John Nash: game theory, John von Neumann, libertarian paternalism, longitudinal study, loss aversion, Mahatma Gandhi, meta-analysis, microaggression, Monty Hall problem, Nash equilibrium, New Journalism, Paul Erdős, Paul Samuelson, Peter Singer: altruism, Pierre-Simon Laplace, placebo effect, QAnon, QWERTY keyboard, Ralph Waldo Emerson, randomized controlled trial, replication crisis, Richard Thaler, scientific worldview, selection bias, Stanford marshmallow experiment, Steve Bannon, Steven Pinker, sunk-cost fallacy, the scientific method, Thomas Bayes, Tragedy of the Commons, twin studies, universal basic income, Upton Sinclair, urban planning, Walter Mischel, yellow journalism, zero-sum game
This is the basis for the philosophy of governance whimsically called libertarian paternalism by the legal scholar Cass Sunstein and the behavioral economist Richard Thaler in their book Nudge. They argue that it is rational for us to empower governments and businesses to fasten us to the mast, albeit with loose ropes rather than tight ones. Informed by research on human judgment, experts would engineer the “choice architecture” of our environments to make it difficult for us to do tempting harmful things, like consumption, waste, and theft. Our institutions would paternalistically act as if they know what’s best for us, while leaving us the liberty to untie the ropes when we are willing to make the effort (which in fact few people exercise).
., 11, 218 Butler, Judith, 90 butterfly effect, 114 Calvin, John, 330–31 Carlin, George, 283, 299 Carroll, Lewis, 38, 75, 96, 225 Carroll, Sean, 160 Castellio, Sebastian, 330–31 Categorical Imperative (Kant), 69 causation all-or-none fallacy, 269 conditions and, 259, 260 confounding (epiphenomena), 246, 257, 260, 263, 265 confounding, ruling out, 267–68, 270–71 counterfactuals, 64, 257, 259, 264 definition, 256–57 fundamental problem of, 258 mechanisms, 258–59 overdetermination and, 259, 260 paradoxes of, 259–61, 260 preemption and, 259, 260 probabilistic, 259–60 reverse causation, 246, 263, 267, 269–70 San people and awareness of, 3, 4–5 temporal stability, 258 unit homogeneity, 258 See also randomized controlled trial —causal networks overview, 260 Bayesian networks, 260–63, 261, 263 causal chain, 261–62, 261 causal collider fallacy, 261, 262–63 causal fork, 261, 262 endogeneity, 263 Matthew Effect, 263–64, 354n21 multicollinearity, 263 unpredictability of human behavior and, 280–81 —multiple causes overview, 272–73 interacting causes, 273–76, 273–74 interaction, 273, 275, 277–78 main effect, 273, 274, 275, 278 nature and nurture, 273, 275–77, 276 regression equations and, 278 talent and practice, 272–73, 277–78, 278 Chagnon, Napoleon, 307 chaos, 114 Chapman, Loren and Jean, 251 cheater detection, 15–16 chemtrails, 299 chess, 277–78, 278 Chicken game, 59–61, 235–36, 237, 344n29 children adoption of, 63 heights of, 252–54 IQs of, 252–53 low birth weights, 262–63 probability of boy vs. girl at birth, 128–29, 132–33, 136–38 ultimate vs. proximate goals and, 46–47 China, 24 choice architecture, 56 Chomsky, Noam, 71, 90 CIA, 91 Circe, 53, 55 circular explanations, 89 Clark, Sally, 129–30 Clegg, Liam, 231 climate change availability bias and perception of energy sources, 121–22, 347n22 avoidance of sectarian symbolism, 312 discounting the future and, 51–52 game theory and, 227–28, 242–44 Public Goods games and, 242–43, 244 —denial of argument from authority and, 90, 91 credibility of universities and, 314 openness to evidence vs., 311 politicization of, 295, 310, 312 Trump and, 284 clinical vs. actuarial judgment, 278–80 Clinton, Bill, 25, 101 Clinton, Hillary, 82, 117, 285, 299, 306 close-mindedness.
Digital Transformation at Scale: Why the Strategy Is Delivery by Andrew Greenway,Ben Terrett,Mike Bracken,Tom Loosemore
Airbnb, bitcoin, blockchain, butterfly effect, call centre, chief data officer, choice architecture, cognitive dissonance, cryptocurrency, Diane Coyle, en.wikipedia.org, G4S, Internet of things, Kevin Kelly, Kickstarter, loose coupling, M-Pesa, minimum viable product, nudge unit, performance metric, ransomware, robotic process automation, Silicon Valley, social web, The future is already here, the market place, The Wisdom of Crowds
If it takes you a year to write a business case, you want the investment it supports to last a lot longer than that – five or ten years, at least. Again, this is not a motivation well suited to the rapidly evolving world of digital technology. Nobody has a 10-year mobile phone contract. There’s a reason for that. Fixing the choice architecture for how money is spent in large organisations is no small task, especially those under the heavy scrutiny experienced by governments. The battle to win as a digital team is two-fold. You need a process that allows digital delivery teams to spend small amounts of money, quickly, in exchange for those teams demonstrating that the cash they’ve been given has allowed them to reduce the risk of scaling up their service for more people to use.
The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William Thorndike
Albert Einstein, Atul Gawande, Berlin Wall, Checklist Manifesto, choice architecture, Claude Shannon: information theory, collapse of Lehman Brothers, compound rate of return, corporate governance, discounted cash flows, diversified portfolio, Donald Trump, Fall of the Berlin Wall, Gordon Gekko, impact investing, intangible asset, Isaac Newton, Louis Pasteur, Mark Zuckerberg, NetJets, Norman Mailer, oil shock, pattern recognition, Ralph Waldo Emerson, Richard Feynman, shared worldview, shareholder value, six sigma, Steve Jobs, Thomas Kuhn: the structure of scientific revolutions
The Outsider’s Checklist Checklists have proved to be extremely effective decision-making tools in fields as diverse as aviation, medicine, and construction. Their apparent simplicity belies their power, and thanks to Atul Gawande’s excellent recent book, The Checklist Manifesto, their use is a hot topic these days.1 Checklists are a particularly effective form of “choice architecture,” working to promote analysis and rationality and eliminate the distractions that often cloud complex decisions. They are a systematic way to engage system 2, and for CEOs, they can be highly effective vaccines, inoculating against conventional wisdom and the institutional imperative. Gawande advises that these lists are best kept to ten items or fewer, and we will conclude with a checklist drawn from the experiences of these outsider CEOs, to aid in making effective resource allocation decisions (and hopefully avoiding value-destroying ones).
To Sell Is Human: The Surprising Truth About Moving Others by Daniel H. Pink
always be closing, Atul Gawande, barriers to entry, business cycle, call centre, Cass Sunstein, Checklist Manifesto, choice architecture, complexity theory, Credit Default Swap, Daniel Kahneman / Amos Tversky, disintermediation, future of work, George Akerlof, independent contractor, information asymmetry, Jeff Bezos, Kickstarter, longitudinal study, Marc Andreessen, Menlo Park, out of africa, Richard Thaler, rolodex, Ronald Reagan, Steve Jobs, The Market for Lemons, Upton Sinclair, Wall-E, zero-sum game
Wansink shows how mindlessness allows us to fall prey to hidden persuaders that make us overeat without even knowing it. Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler and Cass R. Sunstein. Two professors harvest the field of behavioral economics to reveal how altering “choice architecture” can nudge people to make better decisions about their lives. Ask the Five Whys. Those of you with toddlers in the house are familiar with, and perhaps annoyed by, the constant why-why-why. But there’s a reason the little people are constantly asking that question. They’re trying to figure out how things work in the crazy world we live in.
To Save Everything, Click Here: The Folly of Technological Solutionism by Evgeny Morozov
3D printing, algorithmic bias, algorithmic trading, Amazon Mechanical Turk, Andrew Keen, augmented reality, Automated Insights, Berlin Wall, big data - Walmart - Pop Tarts, Buckminster Fuller, call centre, carbon footprint, Cass Sunstein, choice architecture, citizen journalism, cloud computing, cognitive bias, creative destruction, crowdsourcing, data acquisition, Dava Sobel, disintermediation, East Village, en.wikipedia.org, Fall of the Berlin Wall, Filter Bubble, Firefox, Francis Fukuyama: the end of history, frictionless, future of journalism, game design, Gary Taubes, Google Glasses, Ian Bogost, illegal immigration, income inequality, invention of the printing press, Jane Jacobs, Jean Tirole, Jeff Bezos, jimmy wales, Julian Assange, Kevin Kelly, Kickstarter, license plate recognition, lifelogging, lone genius, Louis Pasteur, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, moral panic, Narrative Science, Nelson Mandela, Nicholas Carr, packet switching, PageRank, Parag Khanna, Paul Graham, peer-to-peer, Peter Singer: altruism, Peter Thiel, pets.com, placebo effect, pre–internet, Ray Kurzweil, recommendation engine, Richard Thaler, Ronald Coase, Rosa Parks, self-driving car, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, Skype, Slavoj Žižek, smart meter, social graph, social web, stakhanovite, Steve Jobs, Steven Levy, Stuxnet, surveillance capitalism, technoutopianism, the built environment, The Chicago School, The Death and Life of Great American Cities, the medium is the message, The Nature of the Firm, the scientific method, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, transaction costs, urban decay, urban planning, urban sprawl, Vannevar Bush, WikiLeaks, Yochai Benkler
This last set of assumptions accounts for the proliferation of what Cass Sunstein and Richard Thaler call “nudges”: clever manipulations of default settings—what the authors call “choice architecture”—to get you to eat healthy foods or save money for retirement. Nudging is to manipulation what public relations is to advertising: it gets things done while making all the background tinkering implicit and invisible. The most effective nudges give agents a semblance of agency without giving them much choice. Brownsword sees two problems with nudges. They appear to belong firmly in the prudential register; by tinkering with our “choice architecture,” regulators try to appeal to our self-interest. But in a truly democratic society, the choice of the appropriate register, as well as shifts across them, should be subject to public debate and scrutiny as well.
Thinking, Fast and Slow by Daniel Kahneman
Albert Einstein, Atul Gawande, availability heuristic, Bayesian statistics, Black Swan, Cass Sunstein, Checklist Manifesto, choice architecture, cognitive bias, complexity theory, correlation coefficient, correlation does not imply causation, Daniel Kahneman / Amos Tversky, delayed gratification, demand response, endowment effect, experimental economics, experimental subject, Exxon Valdez, feminist movement, framing effect, hedonic treadmill, hindsight bias, index card, information asymmetry, job satisfaction, John von Neumann, Kenneth Arrow, libertarian paternalism, loss aversion, medical residency, mental accounting, meta-analysis, nudge unit, pattern recognition, Paul Samuelson, pre–internet, price anchoring, quantitative trading / quantitative ﬁnance, random walk, Richard Thaler, risk tolerance, Robert Metcalfe, Ronald Reagan, Shai Danziger, sunk-cost fallacy, Supply of New York City Cabdrivers, The Chicago School, The Wisdom of Crowds, Thomas Bayes, transaction costs, union organizing, Walter Mischel, Yom Kippur War
The designation of joining a pension plan as the default option is an example of a nudge. It is difficult to argue that anyone’s freedom is diminished by being automatically enrolled in the plan, when they merely have to check a box to opt out. As we saw earlier, the framing of the individual’s decision—Thaler and Sunstein call it choice architecture—has a huge effect on the outcome. The nudge is based on sound psychology, which I described earlier. The default option is naturally perceived as the normal choice. Deviating from the normal choice is an act of commission, which requires more effortful deliberation, takes on more responsibility, and is more likely to evoke regret than doing nothing.
business and leadership practices; at Google business pundits Cabanac, Michel cab driver problem cabdrivers, New York City Californians Camerer, Colin cancer; surgery vs. radiation for Cantril Self-Anchoring Striving Scale Carroll, Lewis cars and driving; brakes in; driving tests; fuel economy and; pleasure from cash box categories causal base rates causal interpretations; correlation and; regression effects and causal situations causal stereotypes causes, and statistics CEOs; optimistic certainty effect CFOs Chabris, Christopher chance and randomness; misconceptions of changing one’s mind Checklist Manifesto, A (Gawande) chess children: caring for; depressed; time spent with China Choice and Consequence (Schelling) choice architecture choices: from description; from experience; see also decisions, decision making; risk assessment “Choices, Values, and Frames” (Kahneman and Tversky) CIA Clark, Andrew climate Clinical vs. Statistical Prediction: A Theoretical Analysis and a Review of the Evidence (Meehl) Clinton, Bill Coelho, Marta coffee mug experiments cognitive busyness cognitive ease; in basic assessments; and illusions of remembering; and illusions of truth; mood and; and writing persuasive messages; WYSIATI (what you see is all there is) and cognitive illusions; confusing experiences with memories; of pundits; of remembering; of skill; of stock-picking skill; of truth; of understanding; of validity Cognitive Reflection Test (CRT) cognitive strain Cohen, David coherence; see also associative coherence Cohn, Beruria coincidence coin-on-the-machine experiment cold-hand experiment Collins, Jim colonoscopies colostomy patients competence, judging of competition neglect complex vs. simple language concentration cogndiv height="0%"> “Conditions for Intuitive Expertise: A Failure to Disagree” (Kahneman and Klein) confidence; bias of, over doubt; overconfidence; WYSIATI (what you see is all there is) and confirmation bias conjunction fallacy conjunctive events, evaluation of “Consequences of Erudite Vernacular Utilized Irrespective of Necessity: Problems with Using Long Words Needlessly” (Oppenheimer) contiguity in time and place control cookie experiment correlation; causation and; illusory; regression and; shared factors and correlation coefficient cost-benefit correlation costs creativity; associative memory and credibility Csikszentmihalyi, Mihaly curriculum team Damasio, Antonio dating question Dawes, Robyn Day Reconstruction Method (DRM) death: causes of; life stories and; organ donation and; reminders of Deaton, Angus decisions, decision making; broad framing in; and choice from description; and choice from experience; emotions and vividness in; expectation principle in; in gambles, see gambles; global impressions and; hindsight bias and; narrow framing in; optimistic bias in; planning fallacy and; poverty and; premortem and; reference points in; regret and; risk and, see risk assessment decision utility decision weights; overweighting; unlikely events and; in utility theory vs. prospect theory; vivid outcomes and; vivid probabilities and decorrelated errors default options denominator neglect depression Detroit/Michigan problem Diener, Ed die roll problem dinnerware problem disclosures disease threats disgust disjunctive events, evaluation of disposition effect DNA evidence dolphins Dosi, Giovanni doubt; bias of confidence over; premortem and; suppression of Duke University Duluth, Minn., bridge in duration neglect duration weighting earthquakes eating eBay Econometrica economics; behavioral; Chicago school of; neuroeconomics; preference reversals and; rational-agent model in economic transactions, fairness in Econs and Humans Edge Edgeworth, Francis education effectiveness of search sets effort; least, law of; in self-control ego depletion electricity electric shocks emotional coherence, see halo effect emotional learning emotions and mood: activities and; affect heuristic; availability biases and; in basic assessments; cognitive ease and; in decision making; in framing; mood heuristic for happiness; negative, measuring; and outcomes produced by action vs. inaction; paraplegics and; perception of; substitution of question on; in vivid outcomes; in vivid probabilities; weather and; work and employers, fairness rules and endangered species endowment effect; and thinking like a trader energy, mental engagement Enquiry Concerning Human Understanding, An (Hume) entrepreneurs; competition neglect by Epley, Nick Epstein, Seymour equal-weighting schemes Erev, Ido evaluability hypothesis evaluations: joint; joint vs. single; single evidence: one-sided; of witnesses executive control expectation principle expectations expected utility theory, see utility theory experienced utility experience sampling experiencing self; well-being of; see also well-being expert intuition; evaluating; illusions of validity of; overconfidence and; as recognition; risk assessment and; vs. statistical predictions; trust in expertise, see skill Expert Political Judgment: How Good Is It?
Average Is Over: Powering America Beyond the Age of the Great Stagnation by Tyler Cowen
Amazon Mechanical Turk, Black Swan, brain emulation, Brownian motion, business cycle, Cass Sunstein, choice architecture, complexity theory, computer age, computer vision, computerized trading, cosmological constant, crowdsourcing, dark matter, David Brooks, David Ricardo: comparative advantage, deliberate practice, Drosophila, en.wikipedia.org, endowment effect, epigenetics, Erik Brynjolfsson, eurozone crisis, experimental economics, Flynn Effect, Freestyle chess, full employment, future of work, game design, income inequality, industrial robot, informal economy, Isaac Newton, Johannes Kepler, John Markoff, Khan Academy, labor-force participation, Loebner Prize, low skilled workers, manufacturing employment, Mark Zuckerberg, meta-analysis, microcredit, Myron Scholes, Narrative Science, Netflix Prize, Nicholas Carr, P = NP, pattern recognition, Peter Thiel, randomized controlled trial, Ray Kurzweil, reshoring, Richard Florida, Richard Thaler, Ronald Reagan, Silicon Valley, Skype, statistical model, stem cell, Steve Jobs, Turing test, Tyler Cowen: Great Stagnation, upwardly mobile, Yogi Berra
Haven’t thousands of articles from psychology and behavioral economics outlined major weaknesses in human perception and decision-making abilities? There are the works of Daniel Kahneman, Dan Ariely, and many others. Haven’t we all heard about “nudge,” the concept so eloquently outlined by Cass Sunstein and Richard Thaler? In that worldview, experts know the biases of other decision makers and design the choice architecture to manipulate better human choices, such as changing the default options for which pension plan you will enroll in. Yes, but the chess result differs. Computer chess is pointing out some imperfections in the world’s experts, or you might say it is pointing out imperfections in those who, in other contexts, might be nudgers themselves.
Uberland: How Algorithms Are Rewriting the Rules of Work by Alex Rosenblat
"side hustle", Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, autonomous vehicles, barriers to entry, basic income, big-box store, call centre, cashless society, Cass Sunstein, choice architecture, collaborative economy, collective bargaining, creative destruction, crowdsourcing, disinformation, disruptive innovation, don't be evil, Donald Trump, en.wikipedia.org, future of work, gender pay gap, gig economy, Google Chrome, income inequality, independent contractor, information asymmetry, Jaron Lanier, job automation, job satisfaction, Lyft, marginal employment, Mark Zuckerberg, move fast and break things, Network effects, new economy, obamacare, performance metric, Peter Thiel, price discrimination, Ralph Waldo Emerson, regulatory arbitrage, ride hailing / ride sharing, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, social software, stealth mode startup, Steve Jobs, strikebreaker, TaskRabbit, Tim Cook: Apple, transportation-network company, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, union organizing, universal basic income, urban planning, Wolfgang Streeck, Yochai Benkler, Zipcar
Tarleton Gillespie, Pablo Boczkowskie, and Kristen Foot (Cambridge, MA: MIT Press, 2014); Angele Christin, “Algorithms in Practice: Comparing Web Journalism and Criminal Justice,” Big Data & Society (2017): 1–4, http://journals.sagepub.com/doi/pdf/10.1177/2053951717718855. 7. On nudging as “choice architecture,” see, e.g., Cass R. Sunstein, “Nudging: A Very Short Guide,” Journal of Consumer Policy 37, no. 4 (2014): 583–588, doi:10.1007/s10603–014–9273–1. 8. Josh Horwitz, “Uber Customer Complaints from the US Are Increasingly Handled in the Philippines,” Quartz, July 30, 2015, https://qz.com/465613/uber-customer-complaints-from-the-us-are-increasingly-handled-in-the-philippines/. 9.
Gnomon by Nick Harkaway
Albert Einstein, back-to-the-land, banking crisis, Burning Man, choice architecture, clean water, cognitive dissonance, fault tolerance, fear of failure, gravity well, high net worth, impulse control, Isaac Newton, Khartoum Gordon, lifelogging, neurotypical, pattern recognition, place-making, post-industrial society, Potemkin village, Richard Feynman, Scramble for Africa, self-driving car, side project, Silicon Valley, skunkworks, the market place, trade route, Tragedy of the Commons, urban planning, urban sprawl
‘But what would be more interesting, and much more disturbing and illegal, would be whether it was possible to create a mould for a text which would move the broad shape of an audience member’s connectome closer to that of a given desired shape. Not putting a person into a book, but iterating that person in the minds of anyone who read it.’ ‘Like choice architecture.’ The use of big data and nuance to influence political decision-making: the attempt to corrupt the political process by deliberate manipulation of the cognitive limitations of the human mind. Almost all restaurant menus use it, and even knowing what it is, diners are still influenced: the steak or the lobster is always mountainously expensive.
With a very little adulteration, they cease to be smart at all, and become remarkably stupid, or indeed self-harming. They are susceptible to stampeding by demagogues, poisoning by bad information. They can be made afraid, and when they do they become mobs. They can be divided by scapegoating and prejudice, bought off in fragments, even just romanced by pretty faces. And of course there’s choice architecture: the very thing we use at Tidal Flow to smooth your journey through London or to design serendipitous social spaces in the new developments of the capital. Effectively deployed bad practice under the System is a disaster. It would place the most absolute surveillance machine in history in the hands of villainous actors or mob instincts.’
Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth
"Robert Solow", 3D printing, Asian financial crisis, bank run, basic income, battle of ideas, Berlin Wall, bitcoin, blockchain, Branko Milanovic, Bretton Woods, Buckminster Fuller, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, choice architecture, clean water, cognitive bias, collapse of Lehman Brothers, complexity theory, creative destruction, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, dematerialisation, disruptive innovation, Douglas Engelbart, Douglas Engelbart, en.wikipedia.org, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, Eugene Fama: efficient market hypothesis, experimental economics, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, Financial Instability Hypothesis, full employment, Garrett Hardin, global supply chain, global village, Henri Poincaré, hiring and firing, Howard Zinn, Hyman Minsky, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of writing, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, land reform, land value tax, Landlord’s Game, loss aversion, low skilled workers, M-Pesa, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, megacity, mobile money, Money creation, Mont Pelerin Society, Myron Scholes, neoliberal agenda, Network effects, Occupy movement, off grid, offshore financial centre, oil shale / tar sands, out of africa, Paul Samuelson, peer-to-peer, planetary scale, price mechanism, quantitative easing, randomized controlled trial, Richard Thaler, Ronald Reagan, salary depends on his not understanding it, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, smart cities, smart meter, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, statistical model, Steve Ballmer, The Chicago School, The Great Moderation, the map is not the territory, the market place, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, Torches of Freedom, Tragedy of the Commons, trickle-down economics, ultimatum game, universal basic income, Upton Sinclair, Vilfredo Pareto, wikimedia commons
Indeed one Wikipedia page lists over 160 cognitive biases, like a jumbo-size game of spot-the-difference between rational economic man and his fallible human equivalent.36 What to do in the face of such irrational shortcomings? Introduce nudge policies, say Richard Thaler and Cass Sunstein, which they define as ‘any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives’.37 Thanks to Edward Bernays, brands and retailers have been nudging us for almost a century in the implicit messaging of advertisements, in the placements of products in shops and TV shows, and in the psychology of sales.
The Age of Entitlement: America Since the Sixties by Christopher Caldwell
1960s counterculture, affirmative action, Affordable Care Act / Obamacare, anti-communist, Bernie Sanders, big data - Walmart - Pop Tarts, blue-collar work, Cass Sunstein, choice architecture, computer age, crack epidemic, crony capitalism, Daniel Kahneman / Amos Tversky, David Attenborough, desegregation, disintermediation, disruptive innovation, Edward Snowden, Erik Brynjolfsson, Ferguson, Missouri, financial deregulation, financial innovation, Firefox, full employment, George Gilder, global value chain, Home mortgage interest deduction, illegal immigration, immigration reform, informal economy, Jeff Bezos, John Markoff, Kevin Kelly, libertarian paternalism, Mark Zuckerberg, Martin Wolf, mass immigration, mass incarceration, mortgage tax deduction, Nate Silver, new economy, Norman Mailer, post-industrial society, pre–internet, profit motive, reserve currency, Richard Thaler, Robert Bork, Robert Gordon, Robert Metcalfe, Ronald Reagan, Rosa Parks, Silicon Valley, Skype, South China Sea, Steve Jobs, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, transatlantic slave trade, transcontinental railway, War on Poverty, Whole Earth Catalog, zero-sum game
Corporate employees want to save for retirement but, when young, underestimate how much they will need. So why not require that the default option for workers be a “Save More Tomorrow” plan, which would cause their deductions to escalate automatically as the years passed? The authors called such measures “choice architecture” or “libertarian paternalism.” No one would be ordering anybody around. Authorities would just firmly steer subjects to a choice that was obviously superior. You didn’t have to contribute to your retirement, the way you did with Social Security. Rather than fine or jail you for not conforming, the government would resort to other, more intimate tools, starting with inconvenience.
Prosperity Without Growth: Foundations for the Economy of Tomorrow by Tim Jackson
"Robert Solow", bank run, banking crisis, banks create money, Basel III, basic income, bonus culture, Boris Johnson, business cycle, carbon footprint, Carmen Reinhart, Cass Sunstein, choice architecture, collapse of Lehman Brothers, creative destruction, credit crunch, Credit Default Swap, critique of consumerism, David Graeber, decarbonisation, dematerialisation, en.wikipedia.org, energy security, financial deregulation, Financial Instability Hypothesis, financial intermediation, full employment, Garrett Hardin, Growth in a Time of Debt, Hans Rosling, Hyman Minsky, impact investing, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, liberal capitalism, Mahatma Gandhi, mass immigration, means of production, meta-analysis, Money creation, moral hazard, mortgage debt, Naomi Klein, new economy, offshore financial centre, oil shale / tar sands, open economy, paradox of thrift, peak oil, peer-to-peer lending, Philip Mirowski, Post-Keynesian economics, profit motive, purchasing power parity, quantitative easing, Richard Thaler, road to serfdom, Robert Gordon, Ronald Reagan, science of happiness, secular stagnation, short selling, Simon Kuznets, Skype, smart grid, sovereign wealth fund, Steve Jobs, The Chicago School, The Great Moderation, The Rise and Fall of American Growth, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, Tragedy of the Commons, universal basic income, Works Progress Administration, World Values Survey, zero-sum game
Savings accounts, marriage, norms for social behaviour, government itself in some sense: all these can be regarded as commitment devices. Mechanisms which make it a little easier for us to curtail our appetite for immediate arousal and protect our own future interests. And indeed – although this is less obvious in Offer’s exposition – the interests of affected others. The idea that paternalistic interventions in the ‘choice architecture’ can help us counter short-termism and overcome social traps has been proposed by economist Richard Thaler and Harvard law professor Cass Sunstein in their enormously popular book Nudge: Improving Decisions about Health, Wealth, and Happiness. So, for example, by placing healthy foods rather than sweets near the checkout or making people opt out of pension fund contributions rather than having them opt in are seen as ways of ‘nudging us’ towards good long-term decisions and away from bad short-term ones.18 It’s an appealing idea.
Work Rules!: Insights From Inside Google That Will Transform How You Live and Lead by Laszlo Bock
Airbnb, Albert Einstein, AltaVista, Atul Gawande, Black Swan, book scanning, Burning Man, call centre, Cass Sunstein, Checklist Manifesto, choice architecture, citizen journalism, clean water, correlation coefficient, crowdsourcing, Daniel Kahneman / Amos Tversky, deliberate practice, en.wikipedia.org, experimental subject, Frederick Winslow Taylor, future of work, Google Earth, Google Glasses, Google Hangouts, Google X / Alphabet X, Googley, helicopter parent, immigration reform, Internet Archive, longitudinal study, Menlo Park, mental accounting, meta-analysis, Moneyball by Michael Lewis explains big data, nudge unit, PageRank, Paul Buchheit, Ralph Waldo Emerson, Rana Plaza, random walk, Richard Thaler, Rubik’s Cube, self-driving car, shareholder value, side project, Silicon Valley, six sigma, statistical model, Steve Ballmer, Steve Jobs, Steven Levy, Steven Pinker, survivorship bias, TaskRabbit, The Wisdom of Crowds, Tony Hsieh, Turing machine, winner-take-all economy, Y2K
And because of this, organizations can help people make better decisions. In their book Nudge, Richard Thaler and Cass Sunstein, professors at the University of Chicago and Harvard Law School, document at length how an awareness of the flaws in our brains can be used to improve our lives. They define a nudge as “any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.… To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not.”209 In other words, nudges are about influencing choice, not dictating it.
Competition Overdose: How Free Market Mythology Transformed Us From Citizen Kings to Market Servants by Maurice E. Stucke, Ariel Ezrachi
affirmative action, Airbnb, Albert Einstein, Andrei Shleifer, Bernie Sanders, Boeing 737 MAX, Cass Sunstein, choice architecture, cloud computing, commoditize, corporate governance, Corrections Corporation of America, Credit Default Swap, crony capitalism, delayed gratification, disinformation, Donald Trump, en.wikipedia.org, Garrett Hardin, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Google Chrome, greed is good, hedonic treadmill, income inequality, income per capita, independent contractor, information asymmetry, invisible hand, job satisfaction, labor-force participation, late fees, loss aversion, low skilled workers, Lyft, mandatory minimum, Mark Zuckerberg, market fundamentalism, mass incarceration, Menlo Park, meta-analysis, Milgram experiment, mortgage debt, Network effects, out of africa, payday loans, Ponzi scheme, precariat, price anchoring, price discrimination, profit maximization, profit motive, race to the bottom, Richard Thaler, ride hailing / ride sharing, Robert Bork, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Shoshana Zuboff, Silicon Valley, Snapchat, Social Responsibility of Business Is to Increase Its Profits, Stanford prison experiment, Stephen Hawking, sunk-cost fallacy, surveillance capitalism, The Chicago School, The Market for Lemons, The Myth of the Rational Market, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Davenport, Thorstein Veblen, Tim Cook: Apple, too big to fail, Tragedy of the Commons, transaction costs, Uber and Lyft, uber lyft, ultimatum game, Vanguard fund, winner-take-all economy, Yochai Benkler
See also Lisbet Berg and Åse Gornitzka, “The Consumer Attention Deficit Syndrome: Consumer Choices in Complex Markets,” Acta Sociologica 55, no. 2 (2012): 159, 171–72, https://doi.org/10.1177/0001699312440711. 18.Botti and Iyengar, “The Dark Side of Choice,” 30. A study of the Swedish premium pension system also revealed how overabundance of choice possibilities led to adverse consumption decisions in the available choice architecture. Sławomir Czech, “Choice Overload Paradox and Public Policy Design. The Case of Swedish Pension System,” Equilibrium 11, no. 3 (September 2016): 559, https://www.researchgate.net/publication/313037400_Choice_Overload_Paradox_and_Public_Policy_Design_The_Case_of_Swedish_Pension_System. 19.Peters et al., “More Is Not Always Better,” 118; Rebecca J.
Empire of Things: How We Became a World of Consumers, From the Fifteenth Century to the Twenty-First by Frank Trentmann
Airbnb, Anton Chekhov, Ayatollah Khomeini, Berlin Wall, Big bang: deregulation of the City of London, British Empire, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon footprint, Cass Sunstein, choice architecture, clean water, collaborative consumption, collective bargaining, colonial exploitation, colonial rule, Community Supported Agriculture, critique of consumerism, cross-subsidies, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, equity premium, Fall of the Berlin Wall, Fellow of the Royal Society, financial exclusion, fixed income, food miles, full employment, germ theory of disease, global village, haute cuisine, Herbert Marcuse, high net worth, income inequality, index card, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, James Watt: steam engine, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kitchen Debate, knowledge economy, labour mobility, libertarian paternalism, Livingstone, I presume, longitudinal study, mass immigration, McMansion, mega-rich, moral panic, mortgage debt, Murano, Venice glass, Naomi Klein, New Urbanism, Pier Paolo Pasolini, post-industrial society, Post-Keynesian economics, post-materialism, postnationalism / post nation state, profit motive, prosperity theology / prosperity gospel / gospel of success, purchasing power parity, Ralph Nader, rent control, Richard Thaler, Right to Buy, Ronald Reagan, school vouchers, Scientific racism, Scramble for Africa, sharing economy, Silicon Valley, Skype, stakhanovite, the built environment, the market place, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, trade liberalization, trade route, transatlantic slave trade, union organizing, upwardly mobile, urban planning, urban sprawl, Washington Consensus, women in the workforce, working poor, young professional, zero-sum game
But, by showing us how this upward momentum came about, the same history also provides us with lessons about the types of interventions that might help change lifestyles in a more sustainable direction. Today, the discussion of change is mainly framed in terms of choice, markets and the sovereign consumer. Behavioural economists have added the concept of ‘choice architecture’ to show that consumers do not make decisions in a vacuum but are influenced by available information as well as their own inertia, procrastination or unfounded optimism.20 Their analysis has encouraged a libertarian paternalism, a mix of measures that gently nudges people towards more sustainable behaviour by improving the ‘architecture’ with the help of more salient information, default rules and opinion from valued groups, while preserving freedom of choice overall.