Tuesday , March 26 2019
Home / Brad Delong, Berkeley / Grasping Reality with at Least Three Hands 2019-01-01 05:33:11

Grasping Reality with at Least Three Hands 2019-01-01 05:33:11

Summary:
Richard Thaler: The Power of Nudges, for Good and Bad: "All nudging should be transparent and never misleading.... It should be as easy as possible to opt out.... There should be good reason to believe that the behavior being encouraged will improve the welfare of those being nudged.... Government teams in Britain and the United States that have focused on nudging have followed these guidelines scrupulously. But the private sector is another matter. In this domain, I see much more troubling behavior... ...The Times of London... an offer to take out a one-month trial subscription for the price of just £1.... I would have to provide credit card information and would be automatically enrolled as a subscriber when the trial period expired.... To cancel, I had to give 15 days’ notice....

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Richard Thaler: The Power of Nudges, for Good and Bad: "All nudging should be transparent and never misleading.... It should be as easy as possible to opt out.... There should be good reason to believe that the behavior being encouraged will improve the welfare of those being nudged.... Government teams in Britain and the United States that have focused on nudging have followed these guidelines scrupulously. But the private sector is another matter. In this domain, I see much more troubling behavior...

...The Times of London... an offer to take out a one-month trial subscription for the price of just £1.... I would have to provide credit card information and would be automatically enrolled as a subscriber when the trial period expired.... To cancel, I had to give 15 days’ notice.... I would have to call London, during British business hours, and not on a toll-free number.... As an absent-minded American professor, I figured there was a good chance I would end up subscribing for several months, and that reading the article would end up costing me at least £100. I spoke to Chris Duncan, a spokesman for The Times of London. He said his company wanted readers to call before canceling to make sure that they appreciated the scope of the paper’s coverage, but when I pointed out the inconvenience this posed to readers outside Britain, he said that the company might rethink that aspect of the policy. In the meantime, that deal qualifies as a nudge that violates all three of my guiding principles: The offer was misleading, not transparent; opting out was cumbersome; and the entire package did not seem to be in the best interest of a potential subscriber, as opposed to the publisher...


#noted #behavioral #economics
Bradford DeLong
J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

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