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'Nudge' Theorist Richard Thaler Wins Nobel Prize in Economics

People make poor economic choices. They don’t save enough for retirement. They refuse to cut their losses on plummeting stocks because they won’t own up to mistakes. They buy houses and other investments when prices are high, thinking that what’s going up today will keep going up tomorrow.

 

On Monday, October 9, 2017, U.S. academic, Richard Thaler, who helped popularize the idea of "nudging" people towards doing what was best for them, won the 2017 Nobel Prize in economics for his work on documenting the way people’s behaviour doesn’t conform to economic models that portray them as perfectly rational. 

Influential in the field of behavioural economics (BE), the study of how we make decisions, Thaler’s award is specific to choices made regarding economic decisions, like saving for a house or retirement; the principles work the same across any business decision. BI WORLDWIDE Canada has known that for many years and applies BE principles to design effective business solutions.

Our clients approach us with problem questions such as:

  • What’s the best way to nudge someone to select a higher goal?
  • How do we get people to make decisions based on potential losses and gains?
  • How can we help people make good choices that deliver results?

Time and time again, academic research shows that putting BE principles into practice ensures stronger results. We use BE when we look at the most effective goal-setting structures, the best ways to motivate a sales force, and how consumers buy. Rational thought and emotions combine to drive decisions and behaviour. It’s just that only 23% of behaviours are driven by reason and 77% are driven by emotion. Thaler’s research shows we routinely make bad decisions because our emotions overrule rational thinking.

At BI WORLDWIDE Canada, we design and deliver customizable employee, sales, channel and customer engagement solutions that are grounded in the science of BE.

In other words, we look at how thought and emotion combine to drive human decisions and behaviour. We don't have to guess at what might motivate your employees or customers because we use scientific research and data to determine what will motivate them. Then we act on it.

The key is to get people to change their beliefs and behaviours to produce results. Your gut may tell you it’s hard to put this into practice, and that’s exactly where BE comes into play.

Want to learn more about some BE principles we use to help companies every day? Reach out at canada@biworldwide.com  and we’ll show you how we start with BE first. 

The best way to get started is to get in touch.

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