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How to Make Smarter Decisions by Designing Your Defaults

Richard Thaler

“First, never underestimate the power of inertia. Second, that power can be harnessed.” 

Richard Thaler

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IDEA EXTRACTED FROM:

How to Make Smarter Decisions by Designing Your Defaults

How to Make Smarter Decisions by Designing Your Defaults

https://www.dansilvestre.com/make-smarter-decisions/

dansilvestre.com

8

Key Ideas

Default choices

90% of your daily decisions happen automatically, many shaped by your environment. Thus, most decisions are a habit, not a deliberate choice.

To make smarter choices, design smarter defaults. And habits can be developed by shaping the invisible defaults of your life.

Designing your life

Design your life like a choice architect:

  • Encourage smarter decisions you want to do by making them more accessible.
  • Add friction to habits you want to quit, making them less accessible, or remove the option to perform them completely.

Richard Thaler

Richard Thaler

“First, never underestimate the power of inertia. Second, that power can be harnessed.” 

Eat healthier

  • Don't keep in the house food that isn’t on your diet or you know is unhealthy.
  • Buy items from the outer edges of the grocery store. The aisles are usually used for junk and processed foods.
  • Trick your brain into eating less by using smaller plates and bowls.
  • Plan and prep your meals in advance so you always know what to eat each day.

Exercise more

  • Use a gym partner to create accountability and make sure you exercise.
  • Lay out your workout clothes the night before and put them in a visible place.
  • Park your car at a healthy distance from your destination.
  • Take the stairs when you can.
  • Stand up during meetings at work.

Spend less

  • Use cash for your daily expenses by default.
  • Never buy something on impulse. Think about how many hours it took you to earn that money.
  • Go for quality, not quantity.
  • Stick to the list when grocery shopping.
  • Go to the supermarket when you are full.
  • Cancel unused subscriptions and everything you can live without.

Deep Work

  • Work in full-screen mode to remove all distractions and focus on the task at hand.
  • Always wear headphones.
  • Plan your entire week on Sunday.
  • Listen to the same song on repeat. It help you lose track of time and focus on your task.
  • Design productivity spaces for different types of work.

Productivity

  • Clean your desk at the end of the day.
  • To avoid decision fatigue early in the morning, choose all your outfits for the week on Sunday night.
  • Use the 2-minute rule: if it can be done in 2 minutes, just do it; if it takes more than two minutes, start it.
  • Only use a handful of productivity apps to get things done.

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Position of products influences our decision of buying
We don't just buy products because of what they are, but we often buy them because of where they are. For example, items on store shelves that are at eye level tend to be purchased more than items on ...
Default decisions and their influence

Although we usually have the freedom to make a wide range of choices at any given moment, we often make decisions based on the environment we find ourselves in:

  • If you sleep with your phone next to your bed, then checking social media and email as soon as you wake up is likely to be the default decision.
  • If you keep a water bottle with you throughout the day, then drinking water rather than soda is more likely to be the default decision.

Optimize for defaultsShift your environment so that the good behaviors are easier and the bad behaviors are harder.

Optimize for defaultsShift your environment so that the good behaviors are easier and the bad behaviors are harder.

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Default options

Deciding is too much effort so we’re likely to just stick with the default or safer option if it’s already been chosen for us. 

When we get offered too many choices, the same...

Best decision making happens in the morning

This is when serotonin is at it’s natural high, which helps to calm our brain. Thus, we feel less risk averse and so we can face risks and make harder choices.

The part our bodies play in decision-making

If we’re feeling hunger, thirst or sexual desire, that can actually spill over into the decision areas of our brains, making us feel more desire for big rewards when we make choices. 

This can lead us to make higher-risk choices and to want for more.

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The perfect nudge

Nudging involves gently coaxing someone into a decision or behavior. The successful nudge is one that results in the desired choice or behavior without the person realizing any external influenc...

Multiple systems of the mind

The mind seems to involve various simple systems throughout the body that are not always in agreement. Some systems are shortsighted, some care about relationships, and some prioritize the future of humanity.

We are not always aware of each mechanism. Sometimes we make decisions carefully and other times intuitively.

Nudging methods
  • Highlighting the decisions of others you consider influential. Reading “Most other guests staying at this hotel reuse towels,” may make you feel compelled to align your behavior with the majority.
  • “Injunctive norms” focus on how one should act in a particular situation. “Reusing towels meets a high standard for environmental responsibility,” highlights self-imposed standards. It involves a belief about right and wrong that consider abstract concepts.

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