I'm going to start reviewing the book 'Nudge' chapter by chapter. If you don't already know, 'Nudge' is a book by Thaler & Sunstein and it's about improving decisions, health, wealth, happiness, and personally for me, opinions. Biases and Blunders, the first chapter of Part I points out one main thing which you should know, the way you think or the way your brain acts to something. It's expressed in two ways, automatic and reflective. What can you tell from this? Automatic generally means, done by itself or independent, whilst reflective means the result of something or rather produced by. To make reflective thinking make more sense, its basically your un-confident gut idea being added on with a more well thought idea. The book itself describes automatic as uncontrolled, effortless, and fast. Reflective is more controlled, effortful, and slow (obviously slower than automatic thinking). Take 1+1 for example, do you need to work out anything, no, it's obviously 2, no question about it. If you do need to work out something, think, or consider, it's reflective thinking.
One part of the human thinking is the rule of thumb. In may own words the rule of thumb is solving something or getting something for what we generally know as it is faster, rather than research. This way of thinking can be good but it can lead to many false thoughts. Such as generalizing kids to be disruptive or a certain race to be rude. There are three parts to the rule of thumb, anchoring, availability and representatives.
Anchoring is finding something out with information that you already know. They give a very well put example in the book but i'll give my own example, lets say that there are two children who are having a party. One child is popular and has a big house, the other child is less popular and has a smaller house. The unpopular child has ten people at his party, how can we estimate the amount at the popular kids house? We get an anchor, which is what we know, the unpopular child has ten people at his party. Then you adjust that number in what you feel is right and appropriate, so how about the popular kid has three times the amount of people in his party. So its thirty people at the popular kids party, this isn't accurate but studies show that this is a method of thinking that some people use. I must've thought like this at one point of my life and maybe even you did, it's natural, it's human.
Availability is another rule of thumb. I'll explain the example in the book, do you worry about tornadoes, floods, or a tsunami? Maybe you do, maybe you don't, but it depends on what you've experienced. Would you get insurance for a flood in the desert, never! You may be more likely to get insurance for a hurricane after a hurricane just occurred but as time passess you will forget it and stop the insurance, so fear strikes more depending on your experience and it's a natural human instinct. A biased version of this could come out. A person had a bad history with floods and later forgets about it. When prompted on insurance care, anyone can easily remind him of the flood, leading him to fear a flood more than a tsunami or hurricane.
Representative is the last rule of thumb telling us how something can go to something else or relate to it. Most people would think a tall African American would be a good basketball player while a short person wouldn't. This is true in many ways but can be a bad way to perceive something. Another example is if a baseball player gets a home-run. The coach or fans may say that he's on fire and that he's likely to get another home-run. This is a myth or saying because it isn't true, you don't gain some power from scoring multiply and there is no 'hot-hand' or 'on fire.' If someone scored in soccer and he does it again, it may just be because, everyone thinks he's on fire and they are trying to defend him and bring him closer to the goal or that the person gets motivated and does better. Yet it all ends up as the way we take things or think.
Losses are big, no one likes to lose. Gains and losses is a sub-title on page 36 of Nudge. This is another interesting study which proves many different things. Lets say you were given a free ticket and another guy wasn't given a free ticket but he was given the option to buy the ticket from you. The other guy wouldn't care much, it's just a ticket after-all. But the guy asks you for the ticket, though he wants it for free. You got it for free but have a desire to keep it. It's inside you, you don't want to lose something. So here is a sum of it. I got a free ticket but i don't want to give it and I don't have a ticket but I don't feel the urge to buy it. If you don't understand than take it this way. You pass by a stall and see some wares, you're just looking around with no money, not wanting anything, just looking. The owner offers a free gift to you, you take it. Some random stranger wants it from you but you don't give it. Put it that way, it should make gains and losses easier.
Status Quo Bias is a way of going which William Samuelson and Richard Zeckhauser have dubbed. It's the way of forgetting something or sticking to a current thing. In other words, not bothering to change or simply 'whatever.' A guy signs his inheritance to his mother and later gets married. He intends to leave his inheritance to his wife but never does, he just can't be bothered. So planning your best defaults and foundation is essential as you may later lose it in life or don't have time for it. Another way to call 'Status Quo Bias' is loss aversion and mindless choosing.
Framing is an interesting way of thinking and you should consider this in your life. Framing is a success because people can be un-thoughtful decision makers and not look at something right. If you had a serious disease and went to a doctor and the doctor said that after the operation nine out of ten people survived, you'd most likely take it. But if the doctor said one of ten people died, it would be worrying and a thought may come of you being that one out of ten people who die. If you look at it both ways are the same but framing can change your decision. Altogether framing is a powerful as people make decisions from this through automatic thinking not reflective thinking. Decision, decisions, its all in your decision. Think carefully, frames are good nudges.
In conclusion, decisions in life are changed and thought of in many different ways and humans are nudge-able. The chapter gives a very good last example of a 'Nudge' in real life. In Chicago's Lake Shore Drive, there are a series of 'S' curves. This means that drivers should be aware, I may not be able to drive but I know that you'de have to hold the brakes and drive slower in a situation like that. Anyways, many drivers just don't listen and don't follow the speed limit at the 'S' turn which is 25mph. In order to save lives, the city brought a new system to help the drivers. At the beginning of the curves there are lines painted on the road, evenly spaced and well put (not speed bumps). As the driver encounters the most dangerous corner of the road, the lines are painted closer to each other giving the driver the feeling or sensation of them speeding up, which in result makes them brake even more. This helps them slow down over-all. So when driving on the road people may find the lines as guidance and somewhat speaking to you to slow down and hit the brakes at times. Well as a good ending to the chapter, we have been 'Nudged!'
What specifically is a 'Nudge?' At first glance, most people would consider a nudge to be a push but its also an urge to do something or decide. Specific from merriam-webster, this is the meaning:
to prod lightly : urge into action
Check it yourself: Definition of 'Nudge.'
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