People are making really bad decisions are talking to us Rhichard Thaler, the Nobel prize winner of this year in economy. Not all decisions, but taken without thought or in area we have little experience in or in case of postponed feedback from our actions.
Las one is simple. If you need money for retirement it could be too late to realize in your 60s that you have forgotten to make any savings. Or smoking leads to health problem after some time of sticking to this addiction. As a result people are suffering consequences of their own actions or lack of them.
Regarding to experience, we are purchasing homes or choosing a school for kids very few times in our life. As a result we may not have required knowledge to make a good decision. Which mortgage to choose: in rubbles or dollars, with fixed or floating rate? These questions are hard even for specialists. But for common person its a mess where he are selecting random choice.
To make long story short, people are need default option to rely on or they should have comprehensive information about options. Going back to mortgage, people should be informed about final amount of money they will pay to bank. In case of retirement workers should be automatically enrolled in saving program.
So, author thinks that right conditions helps people to make a good choice and bad one, leads them away from desired result. And government should intervene to create good choice architecture.
Sad news for me that is not mentioned in book but can be extrapolate from ideas in it, that in most cases Big Brother assistance is the only option to change peoples behavior. And if government is not willing to change society or, even worse, trying to benefit from people ignorance, fears and biases there are little chances to stop it. Remember repressions in 1930s in Soviet union, Ku Klux Klan in the US or Nazi regime in Germany. In all these cases people are adjusted to current rules and not willing to change them.