Nudge

• To nudge is to push mildly or poke gently in the ribs, especially with the elbow. To alert, remind, or mildly warn another.
• The emerging science of choice.
• A choice architect has the responsibility for organizing the context in which people make decisions.
• There is no such thing as a "neutral" design.
• Small and apparently insignificant details can have major impacts on peoples's behavior.
• The insight that "everything matters" can be both paralyzing and empowering. 
• People should be free to do what they like and to opt-out of undesirable arrangements if they want to do so. Liberty-preserving.
• Try to influence people's behavior in order to make their lives longer, healthier, and better and to steer people's choices in directions that will improve their lives.
• "Planning fallacy" the systematic tendency toward unrealistic optimism about the time it takes to complete projects. Everything takes longer than you think.
• "Status quo bias": people have a strong tendency to go along with the status quo or default option.
• Setting default options, and other similar seemingly menu-changing startegies, can have huge effects on outcomes.
• The false assumption is that almost all people, almost all of the time, make choices that are in their best interest or at the very least are better than the choices that would be made by someone else. We claim that this assumption is false.- indeed, obviously false. In fact, we do not think that anyone believes it on reflection.
• Choice architects can make major improvements to the lives of others by designing user-friendly environments.
• How can people be simultaneously so smart and so dumb? The approach involves a distinction between two kinds of thinkings, one that is intuitive and automatic, and another that is reflective and rational. We call the first the Automatic System and the second the Reflective System.
• Being truly bilingual means that you speak two languages using the Automatic System.
• Automatic System is your gut reaction and the Reflective System is your conscious thought.
• Good athletes know the hazards of "thinking too much"
• Three heuristics, or rules of thumb, anchoring, availability, and representativeness. (Amos Tversky and Daniel Kahneman (1974)
• Anchoring: we can influence the figure you will choose in a particular situation by ever-so-subtly suggesting a starting point for your thought process.
• Availability: So, too, recent events have a greater impact on our behavior, and on our fears, than earlier ones. Wether people buy insurance for natural disasters is greatly affected by recent experiences. Biased assessments of risk can perversely influence how we prepare for and respond to crises, business choices, and the political process. A good way to increase people's fear of a bad outcome is to remind them of a related incident in which things went wrong; a good way to increase people's confidence is to remind them of a similar situation in which everything worked out for the best.
• Representativeness heuristic can cause people to confuse random fluctuations with causal patterns.
• Optimism and Overconfidence:
• People are unrealistically optimistic when the stakes are high. 
• About 50 percent of marriages end in divorce, and this is a statistic most people have heard.
• Asked to envision their future, students typically say that they are far less likely than their classmates to be fired from a job, to have heart attack or cancer, to be divorced after a few years of marriage, or to have a drinking problem.
• Lotteries are successful partly because of unrealistic optimism
• If people are reminded of a bad event, they may not continue to be so optimistic.
• Gain and losses: 
• Loss aversion helps produce inertia, meaning a strong desire to stick with your current holdings
• Loss aversion pressing us not to make changes
• People have a more general tendency to stick with their current situations
• The combination of loss aversion with mindless choosing implies that if an option is designated as the "default", it will attract a large market share.
• The idea is that choices depend, in part, on the way in which problem are stated.
• Framing works because people tend to be somewhat mindless, passive decision makers.
• Large plates and large packages mean more eating; they are a form of choice architecture.
• One reason is that we like to conform.
• Why do people sometimes ignore the evidence of their own sense.
• Social scientists generally find less conformity when people are asked to give anonymous answers.
• Explicitly targeting the unresponsive audience.
• The moral is that people are paying less attention to you than you believe.
• People's investment decisions are often influenced by the investment decisions of their friends and neighbors.
• There is a warning here for private investors, who should be wary of herd behavior.
• The general lesson is clear. If choice architects want to shift behavior and to do so with a nudge, they might simply inform people about what other people are doing.
• When informed that the actual compliance level is high, they become less likely to cheat. It follows that either desirable or undesirable behavior can be increased by drawing public attention to what others are doing.
• People are more likely to recycle if they learn that lots of people are recycling.
• If you want to nudge people into socially desirable behavior, do not, by any means, let them know that their current actions are better than the social norm.
• The nudge provided by asking people what they intend to do can be accentuated by asking them when and how they plan to do it.
• Often we can do more to facilitate good behavior by removing small obstacle than by trying to shove people in a certain direction.
• It turns out that if certain objects are made visible and salient, people's behavior can be affected.
• Difficult choices are good candidates for nudges.
•  Many of life's choices are like practicing putting without being to see where the balls end up, and for one simple reason: the situation is not structured to provide good feedback. For example, we usually get feedback only on the options we select, not the ones we reject.
• Consider the case of extended warranties on small appliances, typically a bad deal for consumers.
• If you indirectly influence the choices other people make, you are a choice architect.
• There is a default option, then we can expect a large number of people to end up with that option.
• The immense power of default options. If renewal is automatic, many people will subscribe, to magazines they don't read.
• When choice is complicated and difficult, people might greatly appreciate a sensible default.
• When choices are highly complex, required choosing may not be a good idea; it might not even be feasible.
• Humans make mistakes.
• The best way to help Humans improve their performance is to provide feedback.
• RECAP: Record, Evaluate, and Compare Alternative Prices.
• 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.
• It's good to nudge people in directions that they might not have specifically chosen in advance. Structuring choice sometimes means helping people to lerarn, so that they can later make better choices on their own.
• NUDGE
• iNcentives
• Understand mappings
• Defaults
• Give feedback
• Expect error
• Structure complex choices
• People really do want to join the plan, and if you dig a channel for them to slide down that removes the seemingly tiny barriers that are getting in their way, the results can be quite dramatic.
• Employees often leave educational seminars excited about saving more but then fail to follow through their plans.
• By synchronizing pay raises and savings increases, participants never see their take-home amounts go down, and they don't view their increased retirement contributions as losses.
• A dramatic illustration of the potential power of choice architecture.
• Participation rates jump when enrollment is easy.
• The crucial role of choice architecture.
• All these decisions should be revised periodically.
• Humans are loss-averse. Roughly speaking, they hate losses about twice as much as they like gains.
• The lesson is that attitudes toward risk depend on the frequency with which investors monitor their portfolios.
• Again participants were buying into the technology fund most aggressively at the peak, and selling after prices had fallen.
• When in doubt, diversify. Don't put all your eggs in one basket.
• When faced with "n" options, divide assets evenly across the options. Put the same number of eggs in each basket.
• Often people do not diversify at all, and sometimes employees invest a lot of their money in their employee's stock. Plan participants tend to extrapolate past performance into the future.
• Mappings and feedback: create pictures of various housing options.
• When markets get more complicated, unsophisticated and uneducated shoppers will be especially disavantaged by the complexity.
• Some borowers do not know that they will be charged more if they pay off their mortgage ahead of time.
• The people who get the best deals are those who pay no fee up front.
• The timing of the launch of the program can have a strong impact on people's choices.
• The more choices you give people,the more help you need to provide.
• People who know obese people are more likely to be obese themselves; weight loss can be contagious too.
• Inertia and the status quo bias are keeping people from switching.
• A good choice is one that meets a person's specific needs.
• In complex situations, the Just Maximize Choices mantra is not enough to create good policy.
• Software and building engineers live by a time-honored slogan: keep it simple. And if a building has to be complicated to be functional, then it is best to offer plenty of signs to help people navigate. Choice architects need to incorporate these lessons.
• Recall that people like to do what most people think it is right to do; recall too that people like to do what most people actually do.
• More freedom has growing appeal.
• Error reporting in hospitals and among physicians is discouraged.
• Some new ways of thinking about many old problems.
• Good default rules are the best place to start.
• Nearly 100 percent of people believe that they are certain or almost certain not to get divorced.
• Don't send an angry email in the heat of a moment. File it, and wait a day before you send it.
• The right to be wrong: it is sometimes helpful for us to make mistakes, since that is how we learn.
• They don't like any government policy that takes resources from some in order to assist others!
• To approach these problems we once again rely on one of our guiding principle: transparency.
• Sunlight is the best of disinfectants.
• We should design policies that help the least sophisticated people in society while imposing the smallest possible costs on the most sophisticated.
• The sheer complexity of modern life, and the astounding pace of technological and global change, undermine arguments for rigid mandates of for dogmatic laissez-faire.
• One of the key cause of subprime mortgage is that countless borowers did no understand the terms of their loans. People were influenced by a process of social contagion.