Richard Thaler Speaks at RSA

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Richard Thaler, an economist at the University of Chicago, co-wrote the book Nudge: Improving Decisions about Health, Wealth and Happiness with the legal scholar Cass Sunstein. Here Thaler presents his views about decision making, policy and goverment before an audience at the RSA – often called the Royal Society of Arts.

For those of you looking to read something shorter, Thalen and Sunstein give an overview of their book in this LA Times article Designing Better Choices. They also have a scholarly article Libertarian Paternalism Is Not an Oxymoron. And for the truly devoted, you can check out their website Nudges.

Thalen is a behavioral economist, and thus sees the notion of perfect rationality and idealized cost/benefit decision making as irrational. We are human, flawed and imperfect; more importantly, our “choice architectures” are significantly shaped by features of the environment, such as what captures our attention or simply following the default option like the rest of the herd. Hence the nudge, those small features in the environment that we can shape in specific directions while still letting people make their own decisions.

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