thank you so much we are going to talk
about dodging so you can see can’t you
elephants and there’s a big elephant
nudging a little elephant and it might
be useful to think of the big elephant
as very friendly to the little elephant
and preserving the little elephant’s
freedom of choice so the basic idea here
is that the big Dodger is saying to the
little elephant here’s a way you can go
if you want to be healthy and prosperous
shortly after that elephant did that
good work the government of the United
Kingdom created something called a nudge
unit and inside the nudge unit there’s a
book of that title our tails of things
like reminders and warnings and
information preserving initiatives which
have saved people a lot of money and in
some cases extended lives quite
significantly I was privileged in the
first term of the Obama administration
to work for the president that was of
course the honor of a lifetime and one
of the less partisan things we were able
to do these are things that did not
split Republicans and Democrats are in
the domain that focusing on here that is
strategies that allow people to go the
direction they want to go that are
preserving people’s Liberty of choice
but that also work to enable them to
make better decisions richard thaler the
first name on the book nudge won the
Nobel Prize in this year 2017 and what
he won the Nobel Prize for is something
that it’s amazing that hadn’t been done
before Thaler which is to do economics
with real human beings so what we’re
speaking about is doing economics by
taking human beings as they are not as
if they are computers
can generate ideal outcomes because they
have algorithms inside now a knowledge
can be defined as something that is like
a GPS device it tells you how to get in
the direction that you want to go
whether it’s to cure a medical problem
or to make sure a bill is paid on time
or to have resources when you really
need them it’s like a GPS device and
what’s beautiful about GPS devices is
that they are respectful of your view
about what the right destination is and
they also give you guidance that you can
reject if you don’t like it so that is
kind of a defining nudge here is a
scandalous nudge the only one I have for
the women who are viewing maybe you’ve
never seen a urinal before this is
actually what it looks like lovely isn’t
it but this isn’t just any urinal this
is a urinal in the Netherlands Airport
which has a fly painted on it that’s not
a real fly the reason the fly was
painted is to reduce the problem of
pardon the word spillage and the result
of the painted fly was to reduce
spillage by 44% apparently men who see
the fly can’t help but aim at it
[Applause]
now now the problem of spillage at
airports is not the number one public
health problem facing the world today
but there’s a general lesson that is in
many domains not just this one we need
to have a fly painted so that we can
know what we’re supposed to do a friend
of mine from Germany sent me this
postcard it’s apparently a real postcard
and it suggests that dodges can’t dodges
can go wrong in terms of public policy
here we have a situation on our hands in
this country and in fact in many
countries which is people aren’t saving
enough for retirement and the reason is
they don’t sign up for pension plans
which are really often in their economic
interest what we know is that a very
simple tweak to what employers have done
for a long time
massively increases people’s money in
retirement and here’s the tweak switch
from an opt-in design where people have
to sign up to an opt out design where
they’re automatically in got it the
basic nudge is to say that often people
will follow the path of least resistance
which is to do nothing and if we switch
to the default rule – they’re
automatically in whether you’re
automatically a voter you’re
automatically a saver that will have a
massive impact on outcomes we know that
presidents including the one that
preceded the current one and this is not
something the current president has
gotten rid of have been keenly
interested in the gold medal winner of
nudging which is automatic enrollment or
default rule and in the silver medal
winner of nudging which is information
and warnings and an executive order with
the charming name one three five six
three that’s unforgettable actually
memorializes that there’s another
executive order with an equally charming
name one 3707 which basically says use
behavioral science even
love nudges and while I have no economic
stake in this particular product I
really like the name and notice if you
would that the advertisement is itself a
nudge because it’s super attractive okay
in Europe one thing that’s been done to
try to make the air cleaner is to switch
from asking people do you want to be
enrolled in green energy to telling
people instead you’re automatically
enrolled in green energy do you want to
opt out and save more money it turns out
if people are asked whether they want to
opt in the likelihood that they’re in is
really low less than 7% if people are
automatically in and asked whether they
want to opt out the percentage is really
high almost 70 percent notice if you
would that this nudge is an extremely
inexpensive environmental program that
fully preserves freedom of choice and it
makes the air much cleaner all over the
world we are seeing nudge units that are
using tools of this sort freedom
preserving tools to try to make people’s
lives better the World Bank in 2015
basically said if we’re worried about
infectious diseases about poverty about
development about environmental and
other harms think about nudges as an
intervention that might be very
inexpensive and extremely effective okay
what we know from the last years of
social science forgive the word social
science well we know from the last years
of social science is that people don’t
always and this is kind of intuitive
calculate probabilities and figure out
what to do they don’t do that what they
often do is fall prey they we too
predictable biases and mental shortcuts
and this is a way and I’m going to give
you some examples of giving concrete
clarity to why the Nobel Prize was won
in 2017 for the invention of human
centered economics human beings are
standardly optimistic ninety percent of
drivers believe that they’re better
than the average driver 94% of
professors and it hurts me to say this
believe that they’re better than the
average professor if you ask a couple
what percentage of the household work do
you do if the total isn’t over a hundred
percent you have a most unusual couple
and if you ask people if their senses of
humor is better than the average almost
a hundred percent of people say that
optimistic bias is kind of a good thing
but it can create big problems if we
don’t take precautions people also
suffer from present bias that’s a way of
saying today really matters tomorrow a
lot next year not so much and next
decade not at all this is actually
hardwired into the brain present bias
and it suggests that if we’re talking
about our health or our financial
situation we will often go get into
trouble because the future is a foreign
country called later land and we’re not
sure we’re ever going to visit we know
that people often see subsets of
situations and not everything the tale
of the invisible gorilla is actually a
study of people who are asked to count
basketball passes that’s not that hard
and then they rewind the tape and they
see there was a gorilla that came on the
screen and started pounding his chest
and they didn’t see the gorilla at all
this is the mirror image of the painted
fly urinal because there are often
aspects of situations it might be a
medical condition it might be a credit
card it might be a mortgage that’s like
an invisible gorilla you just don’t see
it even though it matters a whole lot to
your life a few years ago in New York
and other parts of the country people
were really scared that they were gonna
get Ebola even though more Americans had
married Kardashians that had died of
Ebola
and people weren’t saying oh my god I
might marry a Kardashian the reason for
the excessive fear of Ebola was people
thought I know of a case in which
someone died there was one case and the
existence of a case that’s really
available to the mind can make people
hysterical and the absence of a case
when you can’t think of one can make you
complacent it’s called the availability
heuristic it means we might need a nudge
people hate losses and gains that are
equivalent at magnitude aren’t as
wonderful as a loss is terrible a little
tax at a grocery store for bringing for
asking for a Pape for a plastic bag
greatly discourages paper bag usage
where as a little bonus for bringing
your own bag basically has no effect
people like Gaines yes but they dislike
losses a lot more okay we know from now
years of work that simplicity is really
important that there is an architecture
choice architecture behind our decisions
whether we’re on a website in a
government office in a doctor’s office
or working with friends in a place of
employment there’s an architecture
between behind our choices here’s an
example if candy bars are in a green
wrapper people who care about health and
the environment will go for it even if
it’s completely sugar filled milk
chocolate it’s green they’ll go for it
people will sign forms at the beginning
if they do they’re more likely to be
honest than if they sign a form at the
end because signing at the beginning
you’re kinda on the line signing at the
end you might say yeah whatever and
that’s choice architecture our decisions
have an architecture behind them and
they really affect choices I’m going to
tell you now about two programs
government programs that tell us
something about the power of nudging
children in the United States are
entitled to free school meals lunches
and breakfasts if
they’re poor but children have not been
signed up by their parents for reasons
that we don’t fully understand but it
has something to do with the fact that
filling out a form to sign up for a
program isn’t the most fun thing and it
might be a little scary if the
government is asking you to sign
something what would you do to try to
get the kids in the solution to get the
kids in that the government shows it’s
called direct certification
it’s like automatic enrollment in
retirement programs or in green energy
the kids are automatically in if the
school district knows that they’re poor
and I have a statistic for you that is
somewhere north of 13 million at one
point in the recent past that’s a number
but if you saw a tiny subset of that
group of children walking into this room
right now I don’t think there’d be a dry
eye on the house and the reason that
program is working is because of a
simple nudge just switch the default
rule here’s what was the US government’s
basic program for advising people of how
to eat healthy it’s called the food
pyramid imagine you’re a student or a
teacher or a parent figuring what what
to eat there’s someone it’s not clear if
it’s a man or a woman marching to the
top of a pyramid a little white triangle
do you know what that white triangle is
is that death is it is it heaven is it
thinness then you can see various
stripes do you know what the stripes are
about I work on this stuff I have no
idea can you recognize the foods that
the US government is asking you to eat
to be healthy there’s basically nothing
that’s recognizably a food except on the
bottom right can you see that that’s a
shoe
is the government telling you eat your
shoe this was replaced by the food
pyramid which is basically clear and
simple
it’s a nudge it says make half your
plate fruits and vegetables this
particular knowledge is having a massive
effect on outcomes all over the United
States and its advantages its simplicity
frequently when people don’t like
guidance from anyone it’s because they
don’t understand it not because they
disagree with it
here are three policies in the United
States that have massive had massive
effects automatic enrollment is
increasing retirement savings by
significant amounts for people who are
going to be comfortable when they when
they’re unhealthy or old it’s working
simplification of the form for financial
aid has the same impact in getting kids
to go to college as a several thousand
dollar increase in the subsidy
simplification better than increasing
the subsidy yes taxpayers don’t have to
foot the bill a little form telling
people how much electricity used they’re
using compared to their peers has the
same effect in increasing energy
conservation as an eight to twenty
percent spike in the short-term cost of
electricity that’s a nudge my final
words are from maybe the greatest
english-language poet of the 20th
century William Butler Yeats who said do
not wait till strike to strike until the
iron is hot but make it hot by striking
now there’s a nudge
[Applause]
you
about dodging so you can see can’t you
elephants and there’s a big elephant
nudging a little elephant and it might
be useful to think of the big elephant
as very friendly to the little elephant
and preserving the little elephant’s
freedom of choice so the basic idea here
is that the big Dodger is saying to the
little elephant here’s a way you can go
if you want to be healthy and prosperous
shortly after that elephant did that
good work the government of the United
Kingdom created something called a nudge
unit and inside the nudge unit there’s a
book of that title our tails of things
like reminders and warnings and
information preserving initiatives which
have saved people a lot of money and in
some cases extended lives quite
significantly I was privileged in the
first term of the Obama administration
to work for the president that was of
course the honor of a lifetime and one
of the less partisan things we were able
to do these are things that did not
split Republicans and Democrats are in
the domain that focusing on here that is
strategies that allow people to go the
direction they want to go that are
preserving people’s Liberty of choice
but that also work to enable them to
make better decisions richard thaler the
first name on the book nudge won the
Nobel Prize in this year 2017 and what
he won the Nobel Prize for is something
that it’s amazing that hadn’t been done
before Thaler which is to do economics
with real human beings so what we’re
speaking about is doing economics by
taking human beings as they are not as
if they are computers
can generate ideal outcomes because they
have algorithms inside now a knowledge
can be defined as something that is like
a GPS device it tells you how to get in
the direction that you want to go
whether it’s to cure a medical problem
or to make sure a bill is paid on time
or to have resources when you really
need them it’s like a GPS device and
what’s beautiful about GPS devices is
that they are respectful of your view
about what the right destination is and
they also give you guidance that you can
reject if you don’t like it so that is
kind of a defining nudge here is a
scandalous nudge the only one I have for
the women who are viewing maybe you’ve
never seen a urinal before this is
actually what it looks like lovely isn’t
it but this isn’t just any urinal this
is a urinal in the Netherlands Airport
which has a fly painted on it that’s not
a real fly the reason the fly was
painted is to reduce the problem of
pardon the word spillage and the result
of the painted fly was to reduce
spillage by 44% apparently men who see
the fly can’t help but aim at it
[Applause]
now now the problem of spillage at
airports is not the number one public
health problem facing the world today
but there’s a general lesson that is in
many domains not just this one we need
to have a fly painted so that we can
know what we’re supposed to do a friend
of mine from Germany sent me this
postcard it’s apparently a real postcard
and it suggests that dodges can’t dodges
can go wrong in terms of public policy
here we have a situation on our hands in
this country and in fact in many
countries which is people aren’t saving
enough for retirement and the reason is
they don’t sign up for pension plans
which are really often in their economic
interest what we know is that a very
simple tweak to what employers have done
for a long time
massively increases people’s money in
retirement and here’s the tweak switch
from an opt-in design where people have
to sign up to an opt out design where
they’re automatically in got it the
basic nudge is to say that often people
will follow the path of least resistance
which is to do nothing and if we switch
to the default rule – they’re
automatically in whether you’re
automatically a voter you’re
automatically a saver that will have a
massive impact on outcomes we know that
presidents including the one that
preceded the current one and this is not
something the current president has
gotten rid of have been keenly
interested in the gold medal winner of
nudging which is automatic enrollment or
default rule and in the silver medal
winner of nudging which is information
and warnings and an executive order with
the charming name one three five six
three that’s unforgettable actually
memorializes that there’s another
executive order with an equally charming
name one 3707 which basically says use
behavioral science even
love nudges and while I have no economic
stake in this particular product I
really like the name and notice if you
would that the advertisement is itself a
nudge because it’s super attractive okay
in Europe one thing that’s been done to
try to make the air cleaner is to switch
from asking people do you want to be
enrolled in green energy to telling
people instead you’re automatically
enrolled in green energy do you want to
opt out and save more money it turns out
if people are asked whether they want to
opt in the likelihood that they’re in is
really low less than 7% if people are
automatically in and asked whether they
want to opt out the percentage is really
high almost 70 percent notice if you
would that this nudge is an extremely
inexpensive environmental program that
fully preserves freedom of choice and it
makes the air much cleaner all over the
world we are seeing nudge units that are
using tools of this sort freedom
preserving tools to try to make people’s
lives better the World Bank in 2015
basically said if we’re worried about
infectious diseases about poverty about
development about environmental and
other harms think about nudges as an
intervention that might be very
inexpensive and extremely effective okay
what we know from the last years of
social science forgive the word social
science well we know from the last years
of social science is that people don’t
always and this is kind of intuitive
calculate probabilities and figure out
what to do they don’t do that what they
often do is fall prey they we too
predictable biases and mental shortcuts
and this is a way and I’m going to give
you some examples of giving concrete
clarity to why the Nobel Prize was won
in 2017 for the invention of human
centered economics human beings are
standardly optimistic ninety percent of
drivers believe that they’re better
than the average driver 94% of
professors and it hurts me to say this
believe that they’re better than the
average professor if you ask a couple
what percentage of the household work do
you do if the total isn’t over a hundred
percent you have a most unusual couple
and if you ask people if their senses of
humor is better than the average almost
a hundred percent of people say that
optimistic bias is kind of a good thing
but it can create big problems if we
don’t take precautions people also
suffer from present bias that’s a way of
saying today really matters tomorrow a
lot next year not so much and next
decade not at all this is actually
hardwired into the brain present bias
and it suggests that if we’re talking
about our health or our financial
situation we will often go get into
trouble because the future is a foreign
country called later land and we’re not
sure we’re ever going to visit we know
that people often see subsets of
situations and not everything the tale
of the invisible gorilla is actually a
study of people who are asked to count
basketball passes that’s not that hard
and then they rewind the tape and they
see there was a gorilla that came on the
screen and started pounding his chest
and they didn’t see the gorilla at all
this is the mirror image of the painted
fly urinal because there are often
aspects of situations it might be a
medical condition it might be a credit
card it might be a mortgage that’s like
an invisible gorilla you just don’t see
it even though it matters a whole lot to
your life a few years ago in New York
and other parts of the country people
were really scared that they were gonna
get Ebola even though more Americans had
married Kardashians that had died of
Ebola
and people weren’t saying oh my god I
might marry a Kardashian the reason for
the excessive fear of Ebola was people
thought I know of a case in which
someone died there was one case and the
existence of a case that’s really
available to the mind can make people
hysterical and the absence of a case
when you can’t think of one can make you
complacent it’s called the availability
heuristic it means we might need a nudge
people hate losses and gains that are
equivalent at magnitude aren’t as
wonderful as a loss is terrible a little
tax at a grocery store for bringing for
asking for a Pape for a plastic bag
greatly discourages paper bag usage
where as a little bonus for bringing
your own bag basically has no effect
people like Gaines yes but they dislike
losses a lot more okay we know from now
years of work that simplicity is really
important that there is an architecture
choice architecture behind our decisions
whether we’re on a website in a
government office in a doctor’s office
or working with friends in a place of
employment there’s an architecture
between behind our choices here’s an
example if candy bars are in a green
wrapper people who care about health and
the environment will go for it even if
it’s completely sugar filled milk
chocolate it’s green they’ll go for it
people will sign forms at the beginning
if they do they’re more likely to be
honest than if they sign a form at the
end because signing at the beginning
you’re kinda on the line signing at the
end you might say yeah whatever and
that’s choice architecture our decisions
have an architecture behind them and
they really affect choices I’m going to
tell you now about two programs
government programs that tell us
something about the power of nudging
children in the United States are
entitled to free school meals lunches
and breakfasts if
they’re poor but children have not been
signed up by their parents for reasons
that we don’t fully understand but it
has something to do with the fact that
filling out a form to sign up for a
program isn’t the most fun thing and it
might be a little scary if the
government is asking you to sign
something what would you do to try to
get the kids in the solution to get the
kids in that the government shows it’s
called direct certification
it’s like automatic enrollment in
retirement programs or in green energy
the kids are automatically in if the
school district knows that they’re poor
and I have a statistic for you that is
somewhere north of 13 million at one
point in the recent past that’s a number
but if you saw a tiny subset of that
group of children walking into this room
right now I don’t think there’d be a dry
eye on the house and the reason that
program is working is because of a
simple nudge just switch the default
rule here’s what was the US government’s
basic program for advising people of how
to eat healthy it’s called the food
pyramid imagine you’re a student or a
teacher or a parent figuring what what
to eat there’s someone it’s not clear if
it’s a man or a woman marching to the
top of a pyramid a little white triangle
do you know what that white triangle is
is that death is it is it heaven is it
thinness then you can see various
stripes do you know what the stripes are
about I work on this stuff I have no
idea can you recognize the foods that
the US government is asking you to eat
to be healthy there’s basically nothing
that’s recognizably a food except on the
bottom right can you see that that’s a
shoe
is the government telling you eat your
shoe this was replaced by the food
pyramid which is basically clear and
simple
it’s a nudge it says make half your
plate fruits and vegetables this
particular knowledge is having a massive
effect on outcomes all over the United
States and its advantages its simplicity
frequently when people don’t like
guidance from anyone it’s because they
don’t understand it not because they
disagree with it
here are three policies in the United
States that have massive had massive
effects automatic enrollment is
increasing retirement savings by
significant amounts for people who are
going to be comfortable when they when
they’re unhealthy or old it’s working
simplification of the form for financial
aid has the same impact in getting kids
to go to college as a several thousand
dollar increase in the subsidy
simplification better than increasing
the subsidy yes taxpayers don’t have to
foot the bill a little form telling
people how much electricity used they’re
using compared to their peers has the
same effect in increasing energy
conservation as an eight to twenty
percent spike in the short-term cost of
electricity that’s a nudge my final
words are from maybe the greatest
english-language poet of the 20th
century William Butler Yeats who said do
not wait till strike to strike until the
iron is hot but make it hot by striking
now there’s a nudge
[Applause]
you
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