If you recall from my previous review of Cass Sunstein’s book Nudge, you may have inferred that I take an intrigued although skeptical perspective of his work. I find the topics of conversation extremely interesting and import for the public to take part in though often believe certain ascertains to be over simplified or not in keeping with what can be observed empirically. That is not to say there is no common ground to be had, if anything it is the opposite as I state when I conclude the review.
In reviewing Sunstein’s latest book Choosing Not to Choose, I take somewhat of a less traditional route in that I believe a substantial portion of my thoughts were in fact covered quite well in a review I would encourage all to read by Ryan Doerfler a Lecturer in Law and Bigelow Teaching Fellow at the University of Chicago Law School. As such, rather than provide a redundant critique, I will instead offer my thoughts which were not covered by Doerfler’s review.
If you were hoping for a purely antithetical rebuttal, you will be surely disappointed. Choosing not to choose does have it’s logical place. A most everyday example I’ve personally experienced is with movies. Deciding to watch a movie is most often far more straight forward than deciding what movie to watch. Recent industry reports contend that this psychological phenomenon is in itself is a huge contributing factor to why cable TV is still around. Sometimes, it is easier to be given a narrow or even singular option based on algorithms (think Pandora radio) than to spend time endlessly searching and contemplating the best option for yourself. Similar studies go a step further and suggest a perspective similar to Sunstein’s, as satirized by the sitcom The Big Bang Theory, that by choosing mundane decisions to default, we preserve our “cognitive energy” for use in more profound or important decisions.
In Choosing Not to Choose, we may in fact have short-term benefits of statistically making more favorable choices and reducing our cognitive load, however, I contend that in so doing we may also risk undermining our cognitive abilities. The phrase “the brain is a muscle” while cliche’ is also a valid analogy. Training your brain is extremely important to allows for optimal cognition. This theory is very much consistent with many Alzheimer studies. Weighing the options and making decisions is a crucial skill for humans. The more we begin to automate rather than mindfully practice these skills in everyday lower risk scenarios, the less adept we are to make logical, informed, rational choices with big consequences which cannot and should not be automated as Sunstein suggests (like career choices, finding a spouse, making strategic business decisions, etc.) Instead of automating your decisions and giving in to your System 1 style of thinking, practice mindfulness and using System 2 thinking in more of your life. You not only become more appreciative of your everyday events, but will be far more skilled than your counterparts at making decisions.
Sunstein also asserts, in rather conventional Austrian Economics style, that in competitive markets firms would impose limits on defaults options and ultimately benefit consumers. I am extremely suspect of that claim, and car dealerships appear to work as both a very unfortunate and salient example for Mr. Sunstein. Car dealers in general are the notorious example of the imperfect market where a firm has substantial leverage over their customers. Let’s say a consumer buys a car and it needs repair. Chances are the consumer is all but oblivious to what is actually broken let alone how to fix it or what is required to do so. The dealer is meanwhile perfectly able to use this information gap to their advantage to gouge prices. The customer meanwhile has little opportunity to go to a competitor who has implemented the same practice. If the customer would like to conduct the repairs themselves they are unlikely to be satisfied as the cars themselves have been designed to be purposefully challenging to work on without special training and often require obscure tools. (see below for a tool not sold in stores that I needed to change an O2 sensor on my car). In theory, competitive markets should alleviate this pain but in practice, the information bias along with a host of other factors results in a market that all but falls short of this fallacy.
I mentioned earlier that although I have a different interpretation of the economic evidence than Mr. Sunstein, I think there certainly can be common ground to be found as our differences revolve mostly around a singular concept. I infer Sunstein’s point of view as slightly “Libertarian” if you will in that he contends the objective of choice architects is to remain as hands off as possible to allow individuals the freedom to choose the best options for themselves while perhaps offering frameworks and tools with the goal of helping people statistically overcome many behavioral economic barriers and choose those options which are actually in their own self interest and utility function. My point of view is largely in keeping with this perspective of personal freedom though I take a slightly more cautious view regarding the unfortunate and often overlooked externalities such systems can result in, in real world scenarios.
We may want to believe that our decisions, and particularly the options and opportunities available to us are independent of the actions of others, though a large body of research on topics such as common pool resource problems would suggest otherwise. One person’s choice to smoke for example can affect you in many ways: increased healthcare premiums or taxes, it may affect your air quality if you’re within ear shot, it could make it more likely for your children to pick up the habit, it sustains a very long and lucrative supply chain which may lure workers whom could otherwise have been employed making a more positive impact on society, etc. It is our responsibility therefore as an organized society to be continuously debating the balance between personal freedom and externality mitigation. The perspectives offered by Sunstein in his books should play an important role as they are largely Pareto efficient, but are nevertheless far from a complete solution to these socioeconomic issues.