By Bilal Hafeez
Nobel Perspectives: Can people be nudged into better behaviour? (Monocle 24: The Bulletin with UBS, 15 min listen)
(You can listen to the podcast by clicking here)
First some background on the history of behavioural economics. Then Nobel Prize winning behavioural economists Richard Thaler and Daniel Kahneman talk about how framing and transparency can be used to ‘nudge’ people towards ’good’ behaviour. Take the US opioid crisis – lowering the default prescription for drugs has been found to reduce addiction. But another effective method is notifying the original prescribing doctor that their patient dies of an overdose. On climate change, carbon taxes and congestion charges should reduce carbon usage. Another approach could be to exploit the ‘endowment effect’. People are more likely to keep an object they own than acquire that same object when they don’t own it. By that logic, if we remind people that we have the earth, and that through their actions they could be losing it (think billboards of melting icebergs), then, Thaler and Kahneman argue, we can more effectively adjust their behaviour. Their ideas present policy-makers with options that could garner bipartisan support.
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