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Economics and Politics as Choice ArchitectureReview Date: 2008-04-28
Economics as though real humans matteredReview Date: 2008-04-22
Nudge is for Humans, not Econs. Nudge realizes, for instance, that making 401(k)s opt-out rather than opt-in, and setting a reasonable default investment plan, will lead lots more people to save money for retirement. And now that they've been enrolled, very few people will opt out. This is what Thaler and Sunstein call "libertarian paternalism": giving people a gentle push in the direction of their own best interests (the "paternalism" part), but never taking away choices (the "libertarian" part). People can quit at any time; it's only the default that has changed.
Your 401(k)'s default investment plan is part of what Thaler and Sunstein call "choice architecture." As a 401(k) administrator, I can guide your choices in any number of ways. I can choose opt-in or opt-out; if I choose opt-out, I have to choose a default plan, whereas if I choose opt-in, I have to decide how much prodding to give you. The point is that choice is inevitable. There's no way to avoid structuring the options available to people, so the right thing to do is to pick the best default. Given this realization, most of Nudge will be entirely uncontroversial.
Thaler and Sunstein digest a mountain of psychological research and reassemble it into a convincing story about how to build policies that correct for human failings. Humans can be expected to make the right decision when faced with a routine, concrete problem -- buying food at the grocery store, say -- but all bets are off when we're asked to evaluate a complicated, large-scale problem like the impact of our air-conditioner usage on global climate change. Thaler and Sunstein want to give the market itself a nudge here. They wouldn't insist that we buy only low-power appliances. Instead, they want our appliances to give us simple, immediate feedback on our energy usage: thermometers that reveal moment-to-moment energy costs, say, and EPA fuel-economy infographics that use easy-to-understand metrics like "dollars per year."
Econs may be able to consume any information thrown at them and correctly render a judgment from what they read; Humans have finite attention spans and would rather spend time with their families than pore over fuel-economy tables. If we want Humans to make the best choices, we have to structure their choice environment to make this possible. Nudge is Thaler and Sunstein's brilliant contribution toward this goal.
This book is a great challengeReview Date: 2008-05-06
The opening story of the school cafeteria sets the stage well and makes the premise clear: people make choices and the way we structure those choices influences the choices they make whether we intend to influence them or not. In light of this, why not choose to influence people to make good choices?
The difficulty is in determining what the good choices are. The book argues that the good choices are those that the people would make for themselves if they had all the best information. However, one still has to ask how one can trust the government to provide all the best information and to even use that with integrity to help people make good choices. It is a difficult dilemma - particularly in modern America where there is such distrust for government.
At the same time, I would certainly rather the school cook place the healthy foods where my child is most likely to choose them than to place the unhealthy foods there. That is a pretty clear decision; however, how does one decide on issues like health insurance and savings. The book suggests that we should make individuals "work" to opt-out of insurance or savings rather than to "work" to opt-in. The point is that people are more likely to have health insurance if the default, with a new job, is that it is taken out of their pay. Additionally, people are more likely to invest in a 401k if the default is that it is taken out of their pay and, unless they make a decision to do otherwise (presumably at the time of hire), it will continue to be.
This seems like a good practice until you realize that the company is defaulting to taking money from the employee and using it for the "employee's good". I can certainly see a time period of struggle where employees may be suing their employers for taking their money without their "explicit permission". That is that since it was a default and not a granting of permission it could be problematic. I supposed time and courts will tell.
This is a tremendous book that brings an important topic to the forefront. Do we need to consciously help people make "better" decisions or can we allow them to make "mistakes" and learn or not learn from those? It does seem to have implications on free will, but at the same time so does doing nothing. This, I'm sure, will become an excellent debate in the coming decades.
Nudge for goodness sakeReview Date: 2008-05-03
After reading Nudge it is easy to understand how small things can make a big difference. For instance, most people I know would like to save more money; most of them don't. Nudge convincingly argues that people can, and should be helped to do that. Very few of us can commit to saving more money today, but most of us can commit today to save more money tomorrow. This human tendency can be used to help people save, and Nudge describes how several companies have already implemented such programs successfully by nudging employees to committing in advance to save part of a future salary increase.
By relying on a large body of work in Psychology and Behavioral Economics, Thaler and Sunstein elegantly argue that people have predictable, systematic biases and that this knowledge can be put to work to help all of us.
Their basic thesis is simple and brilliant: First, how options are presented matters. There is no neutral way to present options. If you present the salads first in a buffet, people will eat more healthy food than if you put salads at the end. Second, don't reduce choice, but organize the options so that people will be more likely to end up with what they themselves would prefer. This is as true for the salad bar as it is for health care.
This amazing book is useful for individuals and policy makers. Policy makers should be interested because such "choice architecture" is strictly non-partisan. Individuals should be interested because this book will nudge them to improve their life their way.
Second best book I've read on human decisionsReview Date: 2008-04-24
This is the third book I've read this year that cites Kahneman & Tversky regarding human decision-making quirks. I found Hubbard's How to Measure Anything: Finding the Value of "Intangibles" in Business to be the most enlighening of all the books in this genre. Nudge may be a close tie with Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets.

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Fascinating methodology of simplicity and usefulnessReview Date: 2003-01-19
Object-Process Methodology paradigm and approach expressed in the book. As a
researcher in Science Education I have been grappling with how to represent
complex, technology-enhanced educational systems that involve humans,
processes and educational artifacts. OPM and the OPCAT software enclosed
were very instrumental in enabling me to model and represent the "big
picture" of educational systems I developed. With OPM I was then able to
gradually refine portions of the system to any desired level of detail.
The applicability of OPM to IT-intensive educational systems is a testimony
to the generic nature of the methodology and to the fact that it is useful
in so many domains. The combination of a single simple graphical model that
generates natural language on the fly is really unique and valuable. I
wholeheartedly recommend the book to anyone interested in modeling complex
systems, be they of technological, economical, or social nature. The method
is straightforward, easy to learn even for non IT-professionals, and most
rewarding in terms of the quality and clarity of the resulting graphical and
textual model.
Object-Process Methodology (OPM)Review Date: 2003-02-03
OPM provides a new framework for specifying design intents and capturing the complexity of hardware and software interaction. Through OPL, it is possible to translate the process into a machine executable code. In addition, OPM can capture the dynamic behavior of the hardware attributes and software states in a single integrated graphical and textual language that is understandable by domain experts who have no programming experience. These traits of OPM ease the development effort for evaluating the system reliability during the design stages. Simulation and testing protocols can be automatically generated though future extensions of OPM to reduce lengthy system verification efforts.
The main benefit of OPM is its ability to identify system objects, processes, and the relationships among them in a structured way. The resulting OPD set becomes an excellent framework for identifying how to implement structural and procedural improvements. The resulting OPL script provides a well-defined set of existing and future specifications for the system. The ability to freely switch from text to graphics and back is of great value to understanding the system as a whole with a single graphic and textual model, without the need to consult various models and carry out mental transformation among these various models.
Based on my personal experience, the following points highlight the benefits OPM can bring to the particular projects described in this paper.
1. OPM is an excellent way to represent daily activities, products, processes and other complex things
2. OPM has allowed representing the complete system with its various aspects in a single model. The model specifies the systems function, structure and behavior aspects without sacrificing clarity.
3. OPM can be used as a common language to exchange design among members of a team.
4. Since OPM design is visual and textual at the same time, it is easy to explain the design.
5. OPL is very easy to generate from OPD
6. OPM will be a good tool for documenting the existing processes and as ISO documentation.
OPM is an Excellent MethodologyReview Date: 2005-04-29
One of the nice things about OPM is that it is easy: I was able to get a team "up-and-running" with the methodology in less than an hour of teaching them some basic concepts (try doing that with UML). Another feature is that you can use this for any type of project; you are not locked into a structured or object-oriented mindset like structured analysis or UML. OPM can handle both types of concepts with ease.
Finally, this methodology is fast. It is just easier and more intuitive to model in an OPM fashion. I've also found that others can comprehend the OPM models better than other methodologies too.
I used to be a UML advocate until I found OPM. I have found concepts that are difficult to model in UML are quite easy to model in OPM. It is just more flexible.
The book is really good by the way. It is very complete and gives plenty of good exammples. I congratulate Dov Dori and his team for providing something that all engineering disciplines can use to design their systems.
The way modeling ought to workReview Date: 2003-08-11
UML uses complex rules to model complex systems, something that is very difficult to make happen, therefore it is very difficult to learn and use. OPM uses simple rules and consistant notations to model complex systems. After simple introductions to the methology, we have been able to start using it in our organization. More powerful and far simpler then UML. The way UML should have been done long time ago.
OPM: Finally a universal tool for system architectsReview Date: 2003-01-31
and architects of software, products and large systems:
Is it ever possible to show structure (the arrangement
of objects) and system behavior (over time) in the same
representation? Dov Dori's book shows convincingly that it can
be done. Particularly powerful is the duality between
graphical system representation and natural language.
Also, the CD-ROM with OPCAT software allows one to follow
the examples in the book and apply OPM directly to a project.
The book is clearly written and will appeal to engineers,
computer scientists and software developers. A refreshing
contrast to the traditional way of looking a object-centered
systems architecting. This begs for more ... in terms of
connecting OPM to other tools such as Design Structure Matrices,
but also for representing highly complex systems over >2 levels
of decomposition.

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I love New YorkReview Date: 2008-02-18
Well done.Review Date: 2007-12-09
Go out and wander around New YorkReview Date: 2007-01-11
Bet you missed a lot on each street.
Then go out again and do it all over.
A real treat.
Excellent companion volume to White & WillenskyReview Date: 2007-03-17
America's peninsular cities; San Francisco, New York, Charleston and Boston also happen to contain the best architecture. Hmm...
As solid and beautiful as the buildings they describeReview Date: 2006-05-18
There are hundreds of buildings that, for whatever reason, have escaped landmark status and/or the attention of New Yorkers. Although "One Thousand New York Buildings" does discuss the familiar structures, like the Empire State Building, the Woolworth Building, and Grand Central Station, it also devotes equal time to those that have been ignored or overlooked. What are those tiny, Colonial style houses on Harrison and Greenwich Streets? How old is that building at 2 White Street? Who lived in those somber buildings at 130-132 MacDougal Street? "One Thousand New York Buildings" answers these and hundreds of other questions. In this sense, this book is much like "New York Streetscapes: Tales of Manhattan's Significant Buidlings and Landmarks" by Christopher Gray and Suzanne Braley, in as much as it pays equal tribute to the famous and not so famous structures.
One last note, this is a solidly put together book. The binding is sturdy, the paper thick and glossy, and the photos are clear and intriguing. It as well constructed as the buildings they pay homage to.

With Us TodayReview Date: 2007-09-03
Thomas Hine describes the era as one that simultaneously looked back to the old west and to a space age future. The old west was a useful paradigm because it brought to mind the pioneer spirit; the sense of self-invention involved and the space age came with the atom bomb, sputnik and the astronauts. Fueled by sudden prosperity, shaped by sophisticated advertising and product marketing, embraced by an American middle class rich with dollars and plenty of leisure, it was the time of ever-growing tail fins on cars, the latest kitchen gadget and exuberant roadside architecture.
While the book would be highly enjoyable just for the descriptions of the products and trends of those times as well as the treasure trove of classic photos, Mr. Hines does more than that. He shows how the tenets of consumerism were laid out in this time; from feeding people a readymade identity through the products they purchased to creating new markets by fulfilling consumers desires rather than their needs. A toaster was no longer a machine that grilled bread. It was a space aged accessory that told its purchaser that he or she was pioneer in the land of tomorrow.
A book about style that won't go out of styleReview Date: 2001-07-20
History as EntertainmentReview Date: 2003-02-03
Before Thomas Hine invented the term "Populuxe," the hopeful designs found in '50's and '60's fashion, furniture, architecture and automobiles were linked with the Space Age, the mighty atom, Rock 'n' Roll, and a nation in love with its wheels. Looking toward a bright future helped the Western world bear the reality of the shadow of Communism. As a guy with dim memories of this era I can say that this book is great fun to read with plenty of vintage pictures and insight into how the Space Age came to be and what it all meant.
Fun look at American HistoryReview Date: 2003-04-01
This book could be a blueprint for the whimsical looks at the 50's seen on History Channel documentaries.
Hines book is a fun, unpretentious look at the times that led to the designs. It is refreshing that the author didn't take the easy route and simply churn out a tome laundry listing trends simply to make fun of them. The book shows a great understanding and admiration of the industrial art of the era without any pretense or hubris
A book about style that won't go out of styleReview Date: 2001-07-20

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Did your Lean Initiative Stall? Read this book.Review Date: 2008-05-12
it really helpsReview Date: 2008-03-29
Who' Counting & Practical Lean Accounting: 1+1>2Review Date: 2007-07-16
"Practical Lean Accounting" is a well structured textbook, approaching lean accounting in a systemized way. Starting from straight-forward shop-floor measurements, like the day-by-the-hour report, it gradually immerses the reader into more demanding topics, like value stream costing or lean performance measurement, culminating in the thorough description of the Sales, Operations and Financial Planning (SOFP) process, which is the way, how an entire lean enterprise is planned, controlled and measured. Lean practitioners looking for specific answers to particular questions will find it easy to navigate through the book. People with the luxury of time for reading it cover to cover will also like it, due to the gradual increase in the complexity of the topics and the many references to other chapters.
"Who's Counting" focuses more on the human side of turning the vision of lean accounting into reality. The novel format is the best way to illustrate, how strong the resistance against change will be and from how many corners of the organization it will attack back. Knowing what to do and knowing why is not enough, the issue is not capturing people's brains. The real challenge is conquering their hearts, while tearing down decades worth of wrong beliefs, bad trade-offs and political game-playing. Mike, the hero of the book teaches us through his own mistakes, that patience, tactfulness and respect for people is more helpful, then acting like a bull in a china shop. The reward is the enthusiastic desire of fellows to go his way and take ownership of the new processes. He even manages to turn Fred, a CFO who has to recognize, that most of what he built during his career was wrong, to use the 3 years until his retirement for becoming the most enthusiastic advocate of change!
Both books provide the reader with insight and incite self-reflection about "the way, we do things". There is hardly any chapter without a sacred cow being slaughtered, however this will strike the reader as plain common sense, due to the thorough description of the reasons. Deeply engrained management practices, such as approval routings, full absorption overhead allocation, standard costing or departmental budgeting will seem ridiculous, once the reader starts to open the eyes to see their fundamentally wrong assumptions.
These books will make You hate many of Your current processes!
The Best Management Accounting Book in YearsReview Date: 2006-11-07
The aim of the book is to "produce a roadmap for finance managers in companies seeking to transition their organisations into lean enterprises". Lean accounting is a new approach to managing a business and, as management accountants, we have a duty to be there. As the authors say "it's never too early to start dismantling the company's transaction driven control systems. They represent huge amounts of waste and cost to the organisation !".
Specifically, lean management seeks to radically restructure the organisation into Value Streams (rather than functional departments), and this requires new management accounting tools including Value Stream performance measures, Box Scores, new methods of planning and budgeting, target costing and a whole host of other tools. The book explores all these tools in detail. The introduction of "lean" tools also allows significant reduction in transactions in the company's accounting processes, including the elimination of full-absorption costing.
Lean accounting is, therefore, designed to replace "traditional" accounting techniques which encourage inefficient practices such as building inventory, and often lead to poor management decisions (using Standard costs). Traditional measures are also too complicated for operational employees to understand easily and are often too late to be useful in shopfloor decision making. Lean accounting, by contrast, is very much focused on simple visual shopfloor measures for instant decision making, coupled with management accounting tools for longer term planning.
"Practical Lean Accounting" provides a good overview of the lean management process, and excellent linkage to management accounting activities. Highly recommended.
Convert your accounting methodsReview Date: 2006-03-08

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Havana DaydreamingReview Date: 2008-04-05
Unlike Pripyat' where vegetation and wildlife replaced human inhabitants, the City of Havana lives on despite its painful decay.
Robert Polidori's Havana depicts several days in the life of the city in the early years of the new century. Probably by chance, the period he photographed represented simultaneously the zenith and nadir of the Revolution. His camera details the architectural heritage of the colonial era set among the blockish facades of Socialist reality. Even as neglect defaces these urban jewels, a certain spirit shines through recalling a city whose exiles in Florida still yearn to return.
As we enter the last days of the Cuban experiment in our hemisphere, the Havana so lovingly pictured here will not endure. Buildings and homes will be restored naturally enough. But the spirit of the urban caretakers of this legacy might have been lost forever if not for Polidori's lens. This is an amazing and dreamy work that belongs to a city and people whose heritage stayed behind.
A Masterful Eye and an Appreciation of DecayReview Date: 2007-05-14
One of the best picture books on Havana!Review Date: 2006-11-03
spectacular photosReview Date: 2002-11-12
Robert Polidori: HavanaReview Date: 2003-04-11

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An Awesome Account Of An Important Part Of American HistoryReview Date: 2007-03-29
Saturn V undressed.Review Date: 2007-02-19
Finally this important part of the apollo program has been reported in detail. Each stage is described with engineering detail down to the location of data link antennas. The F1 and J2 engines are also described in engineering detail down to the types materials the components are fabricated from. The design, fabrication and testing facillities are also described for all three stages of the Saturn V.
Amazingly most of this material came out of an archieve in England! That's how much NASA divested themselves from the entire project once it was over.
If you are a detail monger then this book must be on your shelf. The attached DVD presents the assembly of the Saturn V at the VAB in Florida and the launch of Apollo 11. The remander of the DVD shows footage of live engine tests at the various facillities (and one really nasty failure).
photographsReview Date: 2006-08-11
"3-2-1- Liftoff with this Book"Review Date: 2006-08-16
A great review of the Saturn launch vehicle familyReview Date: 2006-06-16


Common SenseReview Date: 2008-02-09
Excellent insight!Review Date: 2007-11-22
How to identify and avoid being a victim of the creative destruction of capitalismReview Date: 2007-08-15
However, the executives at the highest levels of a corporation are much more sheltered, which is a significant part of the problem. Many fly on private jets, have their private elevator, washroom and cafeteria. So many of them interact with only a few of their employees and almost never with their customers. The information they receive is carefully filtered and in the most rigid of organizations, it is unthinkable that a line worker would ever exchange meaningful words with an executive.
Sheth also describes many of the other problems that good companies face, although I don't believe he is complete in his analysis of why companies fail. He is quite correct that many of the companies initially succeed largely due to luck and being in the right place at the right time. However, the eventual failure of so many companies is due to the creative destruction that is an inherent feature of capitalism. The advance of technology and social mores cannot be predicted or stopped; so many companies simply outlive their economically effective life. In my opinion, that point is not stressed enough.
Sheth is quite correct in pointing out that the greatest point of failure is when companies become "fat cats", content to bask in their success and believe that the good times will continue indefinitely. Or at least as long as the current executive team remains in their positions. He also commends companies who have the policy of term limits in executive positions. By rotating executives from position to position on a regular basis, no person has an opportunity to build a "protective silo", where it becomes more important to protect their executive turf than it is to advance the company.
Another very amusing point that I agree with; is when he points out that there is less of a cultural divide between Christians and Moslems than there is between engineers and marketing people in the same company. As a former software developer, I remember some of the very hostile barbs that went back and forth between the marketing people and the programmers. We spoke a different language, not only in how the product should be built, but we strongly, vehemently disagreed about what should be said to potential customers.
In conclusion, Sheth does an excellent job in describing the history of some of what used to be the most powerful companies on Earth. Now, many of those companies no longer exist, some are in serious trouble and the successful ones are nothing like they were when they were at the peak of their power. The common theme leading to their downfall was an inability to see or even acknowledge that the world associated with their products was changing. The first step in any attempt to keep your company from being added to the list of failures is to recognize that it is possible for yours to fail. Sheth drives that point home with an effectiveness that may make you wince and take an honest look at the state of the company you work for.
Best corporate review you can findReview Date: 2007-08-12
A Critical Look in the MirrorReview Date: 2007-08-27
Some recovered; some struggle to recover. Some are dead; others soon will be. Although the word "institution" implies permanence, Jagdish N. Sheth argues the average life span of a corporation is plummeting. The genius of Joseph Schumpeter's "Creative Destruction," is becoming widely understood.
The author, a business professor at Emory University, argues that companies that rise to the level of great often sow the seeds of their own destruction. He argues the following kernels soon blossom sapping the "great one's" potential:
1. Volume Obsession - rising costs and falling margins.
2. Denial - substituting myths, rituals and orthodoxy for vision and insight.
3. Arrogance - Need I say more?
4. Complacency - success breeds failure.
5. Competency Dependence - the curse of incumbency.
6. Competitive Myopia - a nearsighted competitive view.
7. Territorial Impulse - culture conflicts and turf wars.
The careful reader is forced to shine a light into every corner of his or her organization. Using insightful illustrations, Sheth urges business leaders to identify their self-destructive behaviors before they lead are destroyed. I particularly enjoyed the description of a company in his chapter on the Territorial Impulse described as "complex of 50-story office towers, connected only by common areas at the bottom and the top."
This is an entertaining and insightful book. Management and executives will ignore its lessons at their own peril.

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Great Business Success Story!Review Date: 2007-08-28
"McCormack is a mentor for any entreprenuer!"Review Date: 2001-04-08
Inspiring Read!Review Date: 2006-10-05
John is the real deal... he has always helped meReview Date: 2003-05-15
John is very down to earth in his book as in life. He knows who he is, and does not profess to be anything else. And in his book, he speaks to you. Not at you. He shares some of his personal struggles on his road to and of success. And don't think he had it paved... that is the best part of the whole story. Here is someone who shares both the ups and downs, and takes you along with him on the journey. Get the book. It's easy and pleasurable to read. If you have ever dreamed of owning yor own business, get this book, read it, and remember the struggles John went through to inspire you through the rough spots in owning your own business. You will be glad you did.
One of the best books I've read on successReview Date: 2001-09-01


A seminal and highly recommended work of technical excellenceReview Date: 2005-09-05
Comprehesive, updated, good quick reference guideReview Date: 2004-11-28
Best Book on the Market Covering SS7 ProtocolReview Date: 2005-10-28
To follow on after reading this book I would recommend Lee's training course, Lee not only covers the topic's in his book, he applies his expertise and real world knowledge for you to learn from. A great book to have if you are in the telecommunications industry.
Excellent Book - But Full of TyposReview Date: 2005-01-17
An excellent tutorial and reference tool for SS7Review Date: 2006-05-20
Some minor mistakes mostly typos that are counted to the fingers of both hands may be forgiven for a book of almost 700 pages covering such a complicated technical subject as the SS7 Signaling System, which gives such a detailed,elaborated and beautifully structured knowledge useful and digestible even for the most unfamiliar reader.
Also, unlike someone's assumptions that since the book is published by Cisco Press it would give Cisco point of view and solutions description for SS7, it is not the case.It is cleverly written as a no-vendor technical tutorial in SS7, based exclusively in the standard bodies specifications (ITU-T, ETSI, ANSI etc) as well as in various no-vendor reference sources (more than 150 in number).To this the authors vast experience in SS7 apparently contributes greatly.
Consequently, a future work on SS7 that we would greatly welcome is a book of how to program in SS7, install SS7 hardware and configure an SS7 network.
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Richard Thaler and Cass Sunstein cited the strategic placement of ceramic insects as an example of a "nudge" - a low cost incentive to make the right choice. If you read the blog Jam Side Down, from which this review is condensed, you are very likely to read this book. If you liked Freakonomics, Predictably Irrational, or The Logic of Life, you will like Nudge even better - it packs about 50% more insight per page and the insights matter more. If you follow the blogs or columns of Tyler Cowen, Thomas Sowell, or Robert Samuelson, you are in for a treat.
The book is full of both ideas and of examples like the ceramic fly that leave you thinking "why don't we always do it this way?"
The authors are faculty of the University of Chicago and both distinguished scholars. Thaler is famous for pioneering "behavioral economics" which studies the influence of social, cognitive, and emotional biases on economic decisions. Cass Sunstein is a comically prolific legal scholar who has written about roughly every legal topic there is. His CV lists twenty-eight books and more than three hundred articles (and cautions that it displays only "a very partial listing"). They are tightly connected to the Obama campaign. Austin Goolsby is Obama's lead economic advisor and Thaler's colleague and soulmate. Sunstein was Obama's colleague on the law faculty and is leaving Chicago to become the director of Harvard's Program on Risk Regulation.
Sunstein and Thaler embrace a political philosophy that they term "libertarian paternalism". They deeply respect the right of individuals to make their own (even palpably stupid) choices and would far prefer to see government guide choices than ban activities.
The philosophy at first appears oxymoronic - "libertarian" being conservative to the extent that it is laissez faire and "paternalism" being liberal to the extent that it favors state intervention or protection. Squaring the tension between these ideas is the task and the beauty of the book. The central thesis of Nudge is that like it or not, the way we structure choices creates incentives. Structuring smarter choices provides people with a nudge.
The authors argue that whether we want to or not, we architect choices all the time. They open with a fine example of a school cafeteria that discovers that it can nudge kids towards better diets by putting healthy foods at eye level and in front. They assert further that we can use the emerging science of choice architecture to nudge people to make choices that are healthy, pro-education, financially intelligent, and environmentally sound. You don't ban stupid choices - but you create non-punitive incentives for good ones (for example, you make organ donation an opt-out, not an opt-in program. You save tens of thousands of lives every year and nobody is any worse off for having structured the choice more intelligently). The notion of choice architecture is the great idea at the heart of the book.
But why do we need to nudge? Well, because we often make choices that are not in our self interest - especially if the decisions are complex, infrequent, or make a difference someday instead of now. In these cases, markets fail because choice fails. Humans (as opposed to the fictional "Econs" that the authors mock throughout the book) appear to be well-designed to make simple decisions with immediate consequences such as stepping off of the curb - although the authors point out that in the more touristed precincts of London, even that decision benefits from the "Look Right" nudge on the sidewalk.
Humans (think Homer Simpson, not Econs like Star Trek's Mr. Spock) think poorly when the choices are overly complex or can be delayed without immediate cost (or worst, both). Signing up for a complex mortgage or not joining a 401k plan is painless today -- and who can really figure out the implication of all of those choices? The authors argue that a nudge will at least stack the deck in our favor and reduce the frequency and severity of bad choices.
A good example of smart choice architecture is the Save More Tomorrow Plan which Thaler developed in the mid nineties. Instead of asking employees to save more and reduce their take home pay, a Save More Tomorrow Plan asks employees to check a box to increase their savings rate each time they get a raise. Over time, the result is a dramatic increase in savings as employees commit to save instead of spending future income. With a nudge, Thaler has promoted voluntary savings, preserved choice (employees can opt-out, although few do) and added little if any additional administrative cost.
Transparency figures prominently in many of the nudges that the authors recommend. They urge that credit card companies be required to annually disclose how much we've spent on late fees and interest payments and to do it online using standardized definitions that permit consumers to compare the cost of alternative cards (something that is gruesomely difficult today).
Unfortunately the book stops short of applying "libertarian paternalism" to more controversial nudges - perhaps because the authors do not agree on what to do. Outlawing paid sex or recreational drugs is understandable because these frequently represent poor choices but the cost of prohibition clearly exceeds the social benefits. Libertarian paternalism can contribute to a better choice architecture in these controversial cases. Since tenure is a valuable nudge given to faculty so that they enjoy complete freedom to explore society's most challenging and controversial problems, the reluctance of the authors to do so suggests either caution bordering on cowardice or, dare we say it, a failed nudge.