Nudge by Richard Thaler and Cass Sunstein

‘Nudge’ is a great read that demonstrates clearly why people behave in the way they do, how this is not in their best interests and how to ‘correct’ this.

Behavioural Economics is a relatively recent field of science combining economics with psychology which provides a fascinating and rich insight into human behaviour. David Cameron famously adopted this way of thinking (and acting) before he came to power and created a unit specifically to inform how Government ‘nudge’ its citizens.

The argument for ‘paternalistic liberalism’ is well made although I have always felt uneasy about how Nudge can be used to exploit the cognitive weaknesses we share. But there again, the more mindful people are about how they behave, the better decisions they should make.

The principles of Nudge are mostly applied to understanding social behaviour and how to improve outcomes for people. For a business, a better understanding of human behaviour is critical to working out how to engage with people. This and other works about behavioural economics are useful aids in planning how to do this successfully.

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