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Cool Friend #126: Richard Thaler

We continue the topic of last month's Cool Friends interview with the latest addition. Once again, Behavioral Economics is the subject of discussion with our new Cool Friend, Richard Thaler. Many people say that he invented the discipline. Thaler is Professor of Economics and Behavioral Science at the Graduate School of Business, University of Chicago, and Director of the GSB's Center for Decision Research. Earlier this year, he and coauthor Cass Sunstein wrote Nudge: Improving Decisions about Health, Wealth, and Happiness. Erik interviews Richard to find out the difference between a nudge and a noodge, what a choice architect is, and whether libertarian paternalism is an oxymoron. Thaler wants to help people make better choices. That’s why we think you might want to read his Cool Friends interview. You can also explore the website, Nudges.org, or the blog of the same name.

Cathy Mosca posted this on 08/26/08.

Comments

I like the idea of the Civility Nudge, having often regretted firing off an intemperate email on the spur of the moment. Not only does a 24-hour cooling-off period allow for a bit of mature reconsideration; if after that you still want to send the email you will probably have thought of some far more pungent ways to put the point across. It might also be called the Esprit D'Escalier Nudge.

Automatic detection of strong language, though, does have its limitations. I once worked with such a program (can't remember what it was called but it rated the strength of your language by chilis) and being normally a diplomatic person was surprised to find a message of mine flagged for potentially offensive terminology. It turned out that the word in question was the surname of the then head of the BBC, one Greg Dyke.

Posted by Rob at August 27, 2008 1:13 AM


Great stuff - especially the power of making small changes that affect choices for the better. Calling it Libertarian Paternalism is strange though - certainly our community lexicon is not so barren as to require such a redefinition of terms. I suspect it is there to be deliberately thought provoking, but the psychology of it makes you wonder.

Now, the urinal examples are hilarious - and the results very impressive, but what happens when we start thinking about issues that are not as cut and dry? The cafeteria issue sparked a memory in me from long ago when I worked as a caterer. It is VERY well known that caterers will put the cheap food first, and the expensive food at the end of the line. The point there is that you serve huge amounts of the cheap stuff and not much of the good stuff because the space on the plate gets filled up by the time they get to the expensive stuff. So in this sense, you can see the same idea (hungry people will latch on to the first stuff they see and then want that - and not wanting to go through the line again because they left room on their plate hoping for good stuff that did not materialize) can serve different ends: a social good (better food choices = less societal and human costs due to obesity) or a business good (decreased food cost). They might align together (salads are cheap), but then perhaps not always (hot dogs are cheap too).

I suppose WE (big we) should think about how manipulating people's choices (which is the point of Nudge) effects our society - and certainly think of how abuses to this can create serious problems too.

It is not just the Libertarian "You decided to gorge on potato chips and M&Ms so of course your health insurance should be more and you will die sooner" or the Paternalistic "No you can't eat potato chips and M&Ms at school because then you increase your risk of diabetes and obesity" that brings this out, but the strong feeling many people have that media outlets are have a role in the mess we are in too.

I am all for the work that Thaler does - just amazing stuff - especially because it uncovers for us some of the critical influences that do not seem to be much but have far reaching impact.

Posted by Martin Koning-Bastiaan at August 27, 2008 5:47 PM


Great stuff. The idea of governments/ business using this stuff is sort of freaky, interesting, and strangely cool.

Posted by Brett Tilford at August 27, 2008 6:19 PM


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