Pioneer of behavioural economics is best known for ‘nudge’ theory, which has influenced politicians and policymakers
One of the founding fathers of “nudge” theory, which has helped boost British tax receipts and encouraged smokers to become vapers, has been awarded the 2017 Nobel prize for economics.
Richard Thaler co-wrote a bestselling book on the nudge concept read by politicians around the world and soon had them embracing the notion that people can be influenced by prompts – such as changing the wording of tax demands – to alter their behaviour.
As well as tweaking the sentences in tax reminder letters to increase HMRC takings, Thaler’s branch of economics has influenced Theresa May’s announcement of an “opt out” policy for organ donations where it is presumed that people wish to donate body parts unless they state otherwise. The Department of Health has also adopted nudge principles in its approach to e-cigarettes.
Nudging stems from the field of behavioural economics, examining how gut instincts can often overrule rational choices, in which Thaler is regarded as a pioneer.
The US academic, who is a professor at the University of Chicago, has previously suggested that Brexit could be an example of behavioural economics in action. He argued British voters chose an economically irrational route when considering the options put to them by elites and the mainstream media.
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