The ascent of behavioural economics
The Behavioral Economics Manifesto Gets Revised
July 27, 20216:30 AM ET
Thaler insisted that the dominant economic model was a poor representation of reality and that wholeheartedly embracing this model had ugly consequences for people and markets. Nudge became his manifesto. Not only did he and Sunstein offer evidence and theories for why people often fail to make good decisions, but they offered small, practical solutions — “nudges” — to help people make better decisions. For example, they began the book with the modest example of a school administrator rearranging the display of food at the cafeteria, increasing the likelihood that kids choose a healthier lunch.
A decade-plus later, Thaler and Sunstein are publishing Nudge: The Final Edition. Thaler says that they put a lot of work into the revision and that their “final edition” subtitle is their way of nudging themselves into never having to revise the book again. It’s kind of a perfect meta-proclamation of their own limitations as human beings and of the creative ways we can push ourselves to achieve our goals.
This version of the book is chock-full of new ideas. My favorite is probably the concept of “sludge.”