When he won the Nobel Prize in Economics in 2017, Richard Thaler joked that he would spend the $1.1 million prize as “irrationally as possible.”
A fitting statement for a person whose career, which helped define the field of behavioral economics, has been filled with a unique blend of defiance, humor, and intellectual fearlessness. (If you saw The Big Short, you’ll know he’s a pretty good actor too.)
In our special issue we explored the past 10 years of nudge, so who better to talk to than Thaler himself? We had the opportunity to correspond over email. Below is our conversation, edited for brevity and clarity.
Evan Nesterak: It’s been 10 years, a few nudge units, and a Nobel prize, since you and Cass Sunstein published the book. If you could sum up the last decade in a word or phrase, what would it be?
Richard Thaler: Am I too old to just say OMG? Keep in mind that this was a book no trade publisher wanted. Needless to say we would never have anticipated one “nudge unit” much less 200 or whatever. Every once in a while, one of us will send the other an email that amounts to just “wow.”
What misconception(s) of nudge do you still encounter that you’d like to put to bed?
First of all we need to vanquish the idea that “nudge = behavioral economics.” Nudging, or even public policy applications, are just a tiny portion of the research going on in behavioral economics these days. And the tools that have been used by so-called nudge units have relied on psychology more than behavioral economics. I try to get people to use the term behavioral science instead, which this publication helps to do! Also, not everything that nudge units will do (or should do) need rely on even broadly defined behavioral science. We should be using AI, big data, design thinking, and all the other social sciences, including tools like ethnography. My “make it easy” mantra is not specific to any one set of tools or research approaches.
Keep in mind that this was a book no trade publisher wanted.
In what ways do you think technology can give nudges a broader reach?
I think this is going to be huge in the health care space, especially where “compliance” to prescribed medications is a problem, such as with diabetes. I believe the technology already exists to monitor blood sugar in real time and (if not now, very soon) titrate insulin doses. You know what is better than “make it easy”? “Make it automatic.”
When thinking about the increasing influence of behavioral science on public policy and business, is there anything that keeps you up at night?
I worry a lot about what I have called “sludge,” which is nudging for evil or just making things harder. When I sign books “nudge for good,” it is meant as a plea, not an expectation. Bernie Madoff was an expert at nudging, as were all great con men. In my nightmares there are behavioral science units whose assignment is to figure out new ways to fleece customers, employees, and competitors.
If you had endless time and resources, what’s the research question you would most want to try to answer?
Maybe because I am based in Chicago, but reducing gun violence is a project I would love to tackle. But for now I am limited to cheering from the sidelines (or seminar rooms) for colleagues such as Jens Ludwig.
You may also enjoy our Q&A with Cass Sunstein.
Disclosure: Richard Thaler is a member of the Behavioral Scientist‘s Advisory Board.