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Wednesday, May 22, 2013

Richard Thaler and "Nudging"

In 2008, a behavioral economist named Richard Thaler compiled a decade's worth of his research, rewrote it for a non-technical audience, and published it in a book called "Nudge."

Most behavioral economists just study how people interact with the economy at large.  But Thaler has taken the academic ideas and used them to create something in the real world.

Thaler argues that if we know how people behave, we can also know how to indirectly affect their behaviors.  We can set up laws, regulations and policies that encourage the public to act in a certain way.

He calls this breed of proactive policy making "nudging."  We can't nanny everyone, and we can't force decisions upon them.  But we can nudge them in a certain direction.

Its a lot more innocuous then it sounds.  There's no talk of nudging people to buy a certain item or vote for a certain candidate.  But Thaler does think that we can make it easier for people to pay their taxes on time, save for their retirement, take advantage of a government program, just by making the rules a little more conducive to it.

Anyway, the concept really has a lot of people interested, British Prime Minister David Cameron, for example.  Cameron put together a group of policy experts commonly referred to as the "Nudge Unit," tasked with identifying the little ways in which the UK can make its government more efficient and effective through nudging its citizens.

I found this talk by Thaler himself, explaining the book and the ideas in it.  Enjoy!

1 comment:

  1. Isn't this just what Confucious suggested more than 2000 years ago?