Wednesday, February 25, 2015

Q&A between Peter Ubel and Richard Thaler on nudging

Full article available at Forbes

On the definition of nudge:

"Ubel: You say I am wrong about what constitutes a nudge. Can you elaborate?

Thaler: Sunstein and I define a “good” nudge as something that will affect Humans but not Econs and will be in their best interest.

Ubel: By Econs, you mean those hypothetical, perfectly rational decision makers with unlimited willpower and cognitive processing ability who underlie neoclassical economic theory. Right?

Thaler: Yes. Econs don’t need nudges, because they do what is in their best interests anyways. But Humans often need nudges."

On the proliferation of the term 'behavioural economics':

"Ubel: I have reviewed grant proposals for agencies that have requested projects using behavioral economics. I have discovered that many researchers submitting proposals to these agencies equate the idea of a “nudge” with behavioral economics. In other words, if they can improve people’s behaviors while leaving them free to act, they have nudged those people. Therefore, they conclude they are doing behavioral economics. Who is confused here: me or them?

Thaler: Everyone is confused. This is partly because, as you note in your post, some people have decided to call themselves behavioral economists for strategic reasons, perhaps because it is now trendy, or perceived to have higher status than (say) professor of marketing, and this sort of behavior can lead journalists to be confused. Many now think Robert Cialdini is a behavioral economist, a notion that Bob would find quite funny. It is true that I am one of the co-authors of Nudge and I am a behavioral economist but it does not mean that everything we write about in that book is behavioral economics, nor does it mean that my co-author, the distinguished legal scholar Cass Sunstein, is a behavioral economist."

1 comment:

@makeabetterone said...

This and Peter Ubel's original post are a really good read. Whilst not a criticism by any means, Ubel's concerns originated from a tweet that I believe was more of a "nudge" than even he realised thanks to a misunderstanding by the person who posted it. More here