In light of Richard Thaler winning the Nobel Prize in economics, we explore how behavioural economics is being applied to everyday life.
After publishing the wildly popular Nudge in 2008, Thaler’s theories about how ‘people depart from rationality in consistent ways’ began to change how businesses and policymakers approached economics. Often presented to the public as relatable, dinner-friendly anecdotes, Thaler’s work incorporating behavioural science has helped organisations serve people better by welcoming the irrational.
“In order to do good economics, you have to keep in mind that people are human,” said Thaler after the Nobel announcement. In addition to influencing thousands of businesses worldwide, his crowning achievement saw the American and British governments create behavioural science teams to discover how to encourage – rather than penalise – people to participate fruitfully in society.
Richard Thaler’s Nobel win shows the importance of behavioural economics
Anne Ryan/University of Chicago via Reuters (2017) ©
“More and more, we find that people make decisions emotionally and justify them rationally,” said Canvas8 CEO Nick Morris in an interview with Rory Sutherland, founder of Ogilvy Change. Everything from weather to politics shapes the smallest of human decisions, and at Canvas8 we regularly explore how Thaler’s principles have improved society, examining the ways brands are implementing ‘nudge’ tactics – whether that’s using contactless payments to make giving to charity easy, or understanding why people like splashing out on all-inclusive holidays.
Though Thaler’s thinking began as a ‘deviant idea’, his simply communicated theories have changed how businesses and governments see people for good. “I think it is time to stop thinking about behavioural economics as some kind of revolution,” said Thaler in his 2016 Presidential Address to the American Economic Association. In time, he claims that “all economics will be as behavioural as the topic requires.”
Alex Quicho is the Americas editor at Canvas8, which specialises in behavioural insights and consumer research. Born in Boston and raised in Manila, she’s a writer and cultural researcher, with an interest in identity, futures, and soft power in art and design.
12 Oct 17
2 min read