Nudging the world

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Some economists spend their professional lives in a cloud-cuckoo-land building abstract models of a rational economy that doesn’t exist, never existed, and never will exist. But Richard Thaler, the University of Chicago professor who just won the 2017 Nobel Prize in economics, is that rare academic whose ideas not only address real-world problems but have also been put into effect. In the United Kingdom, for example, a “nudge unit” (actually, the Behavioural Insights Team) inspired by his work aims to develop policies helping citizens make better choices. It got its nickname from the title of the book Thaler wrote with Harvard’s Cass Sunstein, Nudge: Improving Decisions about Health, Wealth, and Happiness, about applying behavioral economics to the functions of government. As Thaler said in a 2011 McKinsey Quarterly interview, “My number-one mantra from Nudge is, ‘Make it easy’”—one of many principles that are no less applicable to business. Read “Nudging the world toward smarter public policy: An interview with Richard Thaler.”