Ten years ago, Richard Thaler, a Nobel Prize-winning economist, and law professor Cass Sunstein, published a book that suggested a brilliant idea: by exploiting simple quirks of human nature – our susceptibility to peer pressure; our tendency to put off coming to a decision – you can nudge people into making the right choices. Indeed by doing so, as governments around the world have found, you can make huge savings at little cost.
In Britain, the Behavioural Insights Team (or “Nudge Unit”), set up by David Cameron, has had some remarkable successes. Reminder letters telling people that most of their neighbours have already paid their taxes (an appeal to herd instinct) have boosted tax receipts. Sending encouraging text messages to pupils resitting their GCSE exam has boosted exam pass rates. Text reminders sent to jobseekers, and signed off with the words “Good luck!”, have resulted in far fewer people skipping job interviews. (Mary Ann Sieghart, The Sunday Times)
We don’t hear a lot about behavioral economics, but this is a good example of it. David Cameron did do one good thing during his premiership!