Items tagged with behavioral economics:
News & Updates:
Faculty Affiliate Professor Katherine Milkman’s new findings on ‘nudges’ were published in Psychological Science, offering a low-cost, high-reward strategy for intervention in government. Nudges encourage certain behaviors - like retirement saving, college enrollment, energy conservation and more - without limiting the options available to the individual.
She states, “The changes in behavior produced by nudges tend to be quite cost effective relative to those produced by traditional policy tools – so there is a big opportunity to use nudging more widely in government in conjunction with traditional policy tools.”
Faculty Affiliates Professor Mark V. Pauly and Professor Scott Harrington comment on the concept of “nudging” consumers towards behavior that makes them better off, especially when it comes to healthcare.
“It’s sort of a minimal intervention which in principle allows autonomy, but also takes advantage of inertia,” said Harrington. “The idea is that you might be able to nudge people into a decision that is better than the alternative of doing nothing, but it still allows them the freedom to do something else.”
“It makes sense when it is something that is more or less good for people, unequivocally,” Pauly says of the auto-enrollment option. “The main reason someone wouldn’t do it is if it enrolled them into an option that wasn’t good for them.”
New research from Faculty Affiliate Kevin Volpp is improving healthcare for Americans and industry professionals, from hand washing to the Affordable Care Act.
“There’s starting to be a broad recognition that decision-making environments in health care could better reflect how doctors and patients actually make decisions,” he said.
In his new paper, Replacing the Affordable Care Act: Lessons From Behavioral Economics, Volpp draws on behavioral economics to propose 4 general principles for health insurance reform to help ensure that the currently insured will not lose their coverage.
As China shifts its growth engine from the industrial to the service sector, US companies are exploring new growth points.
While China is developing a consumption-driven economy, many sectors such as logistics services will improve to better serve Chinese consumers, said Faculty Affiliate David Bell during a visit to Shanghai Jiaotong University last month.
This piece explores how construction companies which aren’t formally organized, often built entirely on relationships and informal agreements, can be a perfect remedy for infrastructural deficits in rural areas of India. We explore how informal economies encourage economic growth. Critically, we reach the conclusion that developing economies must tailor policy to allow for informal economies to grow while simultaneously ensuring they do not become exploitative. The piece develops a comprehensive behavioral economic framework for understanding informal construction economies as a commitment device and uses a series of interviews with the author’s own family to illustrate these powerhouse industries.