© 2011 Association for Financial Counseling and Planning Education ® . All rights of reproduction in any form reserved. 79 Book Review Nudge: Improving Decisions About Health, Wealth, and Happiness Rebecca J. Travnichek Authors: Richard H. Thaler and Cass R. Sunstein Publisher: Penguin Group (2009) ISBN 978-0-14-311526-7 How many people skip the introduction of a book and jump right into Chapter 1? Doing so would be a mistake with this book. In the Introduction, the authors identify choice architects. “A choice architect has responsibility for organ- izing the context in which people make decisions” (p. 3). Choice architecture and traditional architecture both require planning and following guidelines/restrictions. The devil really is in the details. Every little thing matters! A choice architect can choose an arrangement or environment which provides individuals with the freedom to choose, but still “influence people’s behavior in order to make their lives longer, healthier, and better” (p. 5). Thus, a nudge. The authors also describe the difference between Humans and Econs (these terms are utilized throughout the book). Homo economicus, or economic man (Econs), is based upon the idea that individuals think and choose unfailing- ly well. Whereas with homo sapiens (Humans), the same cannot be said. We forget things and sometimes make bad choices. For this book, Humans are real and Econs are imaginary. It is important to identify this difference as a choice architect will need to consider this when develop- ing a nudge. As choice architects, we have opportunity to nudge people toward what is better for them. Thaler and Sunstein call this libertarian paternalism. The libertarian aspect of our strategies lies in the straightforward insistence that, in general, people should be free to do what they like and to opt out of Rebecca J. Travnichek, Ph.D., Family Financial Education Specialist, University of Missouri Extension, PO Box 32, Savannah, MO 64485-0032, travnichekr@missouri.edu, (816) 324-3147 undesirable arrangements if they want to do so. Liber- tarian paternalism is a relatively weak, soft, and non- intrusive type of paternalism because choices are not blocked, fenced off, or significantly burdened (p. 5). The authors have divided this book into five sections. Each section consists of three to five chapters. They have also provided a Notes section, a bibliography, and an ex- tensive index. Humans and Econs In Chapter 1, “Biases and Blunders,” the authors imply that we think within two systems; one is automatic, which they refer to as the Automatic System and the other is reflective, which means taking time to think before making a decision. This is called the Reflective System. In making choices or decisions, the Automatic System can be considered our gut reaction and the Reflective System as our conscious thought. One of the authors’ goals is to nudge readers to change and adapt so that we can rely upon our Automatic System to lead to easier, better, and longer lives. Utilizing research, the authors identify how rules of thumb can lead to what they term “heuristics and biases.” Anchor- ing, availability, and representativeness heuristics are iden- tified and discussed, as well as how optimism and overcon- fidence can lead to realistic or unrealistic decisions (which need a nudge). In almost all cases, individuals are loss averse which can lead to an emotional Automatic System; thus, holding us where we are at this current point in time.