Question: What are the implications of your work for
politicians and people outside of the sciences?
Laurie Santos: Some of our monkey economics work
suggests that the biases we see in humans—in particular the fact that we
think about economic questions from a relative rather than an absolute
standpoint—those kinds of biases are deeply engrained in us, probably
evolutionarily old, and hard to overcome. What this means is we got to
start taking these biases seriously and the policy implication, or even
just the implication for the lay people try to make economic decisions
is to realize that these factors are at work. So, one thing we’ve
learned is that monkeys actually pay a lot of attention to reference
points. So, arbitrary information that just sets a price for you. And
you care about whether, you know, the actual price you’re going to pay
is less or more than that. You know, so advertisers do this to us all
the time. You can’t walk into a grocery store or department store
without seeing, you know, “Was $300, Now Only $199.” Right? We’re
affected by these things even though we’d really like to think that we
aren’t. And if you think about other things are evolved. Other evolved
biases we have, like our passion for cheesecake and our hatred of scary
things and so on, we’re really going to have a hard time overcoming
those sorts of biases.
And so the policy implications are
first just that, should we allow these kinds of thing out there.
Probably we’re never going to overcome that. Probably these kinds of
things are gong to be there, but as a decision maker, you should really
realize that they’re there and understand that your choices are really
being affected by these pieces of information.
There are a set of folks who are really pushing that we need to take
these biases seriously so folks like Dick Thaler and Cass Sunstein who
wrote this recent book "Nudge" that thankfully is having a big effect,
saying that, "Look we need to take these kinds of things seriously
because pretending that we don’t have these biases means that we set up
these choice structures—they call them choice architectures—that are
influencing people’s behavior even though we don’t think they do." So,
they have a case of... consider a lunch line when you have different
foods and different orders. And let’s say that we could figure out for
sure that the first piece of food is going to effect what you buy.
Which piece of food should we put first?
Well, we could be
paternalistic and put the broccoli first, you know, we could say, "No,
we’re going to ignore that and put the cheesecake first," and so on.
But one of the foods has to go first, or we have to decide to be random
every day and switch it up. You know, when we set up policies, we set
up these structures that have to have a default option, that have to
sway choices somehow. And so the question is, "How do we want to sway
them?" And realizing how these biases work and that because of our work
with the monkeys, they may be hard to override, I think, suggests that
in fact, we need to take these kinds of policy suggestions really
seriously and deal with the question of, you know, we have to set these
policies up somehow and we know that how we set them up is going to
effect choices, you know, what should we really decide to do?
Recorded May 21, 2010
Interviewed by Andrew Dermont