What Daniel Kahneman and Amos Tversky started has been slowly ballooning into a world changing concept but the paradox of it, is lesser the people know of them and their theories, faster the changes for better. Good news is they and others like the "nudge team" aren't popular like rock stars for obvious human shortcomings when it comes to hedonic sound byte driven media.
My belief in behavioral economics is drawn from their premise of rightly assuming humans as irrational but they can be subconsciously nudged to act rational for their own benefit as well as the benefit of the society. There are limitations to it but we haven't even embarked much into the process and it's too early to worry about the threshold level. An interesting article on how behavioral economics can have an impact on climate change process:
"If human beings were the perfectly rational creatures imagined by classical economists, we would have done something about climate change by now. But the central insight of behavioral economics — the once heretical but now ascendant paradigm in economics, particularly following the 2002 Nobel Prize awarded to one of its founders, Daniel Kahneman — is that humans aren’t fully rational. All sorts of cognitive limitations prevent us from being so, and behavioral economists have spent much of the past decades discovering, describing, and naming our many mental shortcuts and biases, and ascribing our various irrational tendencies to their effects. Ben Ho’s particular interest is in how people’s feelings of guilt and altruism can be leveraged to reduce their carbon footprint, and he presented his findings at the November conference in a talk he titled “Using Behavioral Economics to Save the World.”
My belief in behavioral economics is drawn from their premise of rightly assuming humans as irrational but they can be subconsciously nudged to act rational for their own benefit as well as the benefit of the society. There are limitations to it but we haven't even embarked much into the process and it's too early to worry about the threshold level. An interesting article on how behavioral economics can have an impact on climate change process:
"If human beings were the perfectly rational creatures imagined by classical economists, we would have done something about climate change by now. But the central insight of behavioral economics — the once heretical but now ascendant paradigm in economics, particularly following the 2002 Nobel Prize awarded to one of its founders, Daniel Kahneman — is that humans aren’t fully rational. All sorts of cognitive limitations prevent us from being so, and behavioral economists have spent much of the past decades discovering, describing, and naming our many mental shortcuts and biases, and ascribing our various irrational tendencies to their effects. Ben Ho’s particular interest is in how people’s feelings of guilt and altruism can be leveraged to reduce their carbon footprint, and he presented his findings at the November conference in a talk he titled “Using Behavioral Economics to Save the World.”
Early in Ho’s presentation, he mentioned a book called Nudge, written by the behavioral economist Richard Thaler of the University of Chicago and lawyer Cass Sunstein, his former colleague, now a professor at Harvard Law School and the Obama administration nominee to head the Office of Information and Regulatory Affairs. In their book, Thaler and Sunstein coin a term: choice architecture. They argue that because the way in which we are presented with information changes our response to it, the best choice architecture gently steers us into the salubrious behavior that more thoroughly rational beings would choose."
"Ironically, the very problems these social scientists are identifying plague the scientific and policy communities themselves. That includes poor communication. Economists and psychologists “don’t talk as much as we should,” Ho confesses, when first hearing of Leiserowitz’s research. And Leiserowitz, for his part, says that the socialscience community has put together “nothing as sophisticated or coordinated as what the natural scientists have done.” Natural scientists have the IPCC, but the social scientists occasionally have conferences Leiserowitz calls “one-off, singleafternoon kind of things.”
"Ironically, the very problems these social scientists are identifying plague the scientific and policy communities themselves. That includes poor communication. Economists and psychologists “don’t talk as much as we should,” Ho confesses, when first hearing of Leiserowitz’s research. And Leiserowitz, for his part, says that the socialscience community has put together “nothing as sophisticated or coordinated as what the natural scientists have done.” Natural scientists have the IPCC, but the social scientists occasionally have conferences Leiserowitz calls “one-off, singleafternoon kind of things.”
And there’s a second thing social scientists might learn from their own research: how to market themselves to a particularly stubborn audience. Social science may be able to save the world from climate change, but only if there’s a change of heart — not just among the public, but among natural scientists and engineers. “I see more social scientists interested in public-policy issues and a growing awareness by natural scientists that it cannot be improvised.” But, Fischhoff says of natural scientists, “many of them do not believe in the social sciences. They grudgingly see that people matter, but they are not willing to share power with social sciences, or to entertain the thought that their own message is not the right one and that you need to include the social scientists in a strategic way.”
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