Understanding behavioural economics from a bowl of cashew nuts

Understanding behavioural economics from a bowl of cashew nuts

In an interview, SMU Behavioural Sciences Institute Director and Professor of Psychology David Chan commented that US economist and 2017 Nobel Prize winner Richard H. Thaler’s contribution to the world of economics was to establish a choice architecture – where people make their choices based on emotions, and not out of economic rationality. Citing the example of the US pension programme “Save More Tomorrow”, where one gets enrolled in the programme by default unless they choose to opt out, Prof Chan noted that this leverages on the common mentality of status quo bias.