By John Cairns

HONG KONG -- Gentle “nudges” work vastly better than fierce shoves to move people toward healthy decisions and along positive pathways. That’s the common-sense contention from Professor Richard Thaler, co-author of a new book, Nudge, Improving Decisions About Health, Wealth and Happiness (also by Cass R. Sunstein, 2009, Penguin, 312 pages).

Using pleasant, subtle encouragement can help governments to implement policies and individuals to achieve better lives for themselves and loved ones. Small, almost imperceptible, moves can have dramatic results.

“None of us like to be told what to do,” 63-year-old Richard said when visiting Hong Kong. “That’s one reason for our philosophy. Another is that if policy-makers rely on nudges, as opposed to mandates, they can do less harm.”

Many governments, as in China, North Korea, Burma, Iran and even Singapore, do little nudging. They act aggressively with harsh punishments for people who resist policies.

“In a sense, we wrote the book for western audiences,” Richard said. “Most American and European readers believe they’re entitled to freedom of choice. For policy-makers in the West, our message is: ‘Here’s a new set of tools to achieve policy goals that will be acceptable to people who dislike being told what to do.’

“But there’s an interesting flip side. Political leaders in places like Singapore and China, if they’re inclined to back away a little from their own power, could move toward nudging too.”

A New York Times bestseller, Nudge also does especially well in Britain and South Korea. “Apparently, the South Korean president assigned it as reading for his cabinet,” Richard said. “That was a good nudge.”

The book focuses on facilitating better choices. Setting up sensible “choice architecture”, a structure with strategic nudges, can lead to healthier lifestyles, richer investments, happier families, smoother schedules, better government and wiser use of world resources. That’s a lot to expect – all without limiting freedoms.

“People need to think about in which parts of their lives they’re doing too much and which parts too little,” Richard said. “Then they need to tilt things differently.”

Many folks improve their financial status almost effortlessly by setting up automatic monthly savings plans. That’s a nudge.

“Really, this is the only way most people can save – automatically, directly from their paychecks.” Saving or investing a little each month removes the need to predict fluctuations in stock markets, interest rates or currency values. “Professionals can’t forecast stock markets accurately so there’s no hope for everyday folks to do it,” but they can nudge themselves to regular gains.

Many restaurants show prices to one side of menus, and customers easily spot the cheapest choices. But other eateries discretely list the prices right after food descriptions to keep the attention on taste. That’s another nudge.

Hospital patients usually consent to surgery if nudged with a statistic that “90 per cent survive”. If told that “10 per cent die”, they often balk, despite the identical odds.

Richard’s daughter Jessie, a Grade 8 English teacher, nudges her students by rewarding them for excellence with imitation currency (“Thaler dollars”) to spend on cupcakes she sometimes bakes. “The idea of nudges has been alive in my family for a long time,” Richard said. “I’ve thought about such things for my entire career.”

Can nudges move a spouse toward one’s own viewpoint? “My wife knows everything I do, plus more, so none of this works on her,” Richard said. “But nudging may be very useful to other people.”

Having raised three children, Richard reckons that nudges help with household harmony. “Many parents adopt a more authoritarian approach than is best,” he said. “The children getting into the most trouble may be those not allowed to make their own decisions at home. Then they can’t cope.”

Isn’t all this just common sense? “Absolutely,” Richard said. “But common sense is missing in much of what people see and do, even in government and academic circles. The idea of people as hyper-rational, unemotional maximizers may be preposterous, except to economists. In the reality of everyday lives, we’re distracted, tempted and confused.” Nudges in the right directions can help enormously.

Originally from New Jersey, Richard teaches economics and behavioral science at the University of Chicago’s Booth School of Business. He probes “the gap between psychology and economics”.

Sunstein, a legal scholar, has taught law at the University of Chicago and at Harvard. “Cass and I are good friends,” Richard said. “We wrote papers together and talked about ideas. One thing led to another.”

Before last year’s historic U.S. election, both men acted as advisors to the Barack Obama campaign. Sunstein joined the new administration as director of the office of information and regulatory affairs. “He’s the nudger-in-chief,” Richard quipped.

“So far, I think President Obama has done well,” Richard said. “He inherited the most difficult situation imaginable with two wars, a huge deficit, the biggest financial crisis since the Great Depression, a health-care system that’s a mess and a complete erosion of America’s status around the world – all just to start. It’s fair to say he hasn’t solved all the problems yet.”

The Obama team shows a strong inclination to “nudge” both world leaders and U.S. citizens. Predecessors like George W. Bush, Dick Cheney and Karl Rove applied much rougher tactics.

In 1992, Richard published a previous book, The Winner’s Curse, a collection of his columns from academic journals. He has edited other books.

In a few years, Richard may write another book. “I’m just starting to think about that,” he said. Already, thousands of readers keen for more may be planning ways to nudge him.

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