Better living through behavioral science
Suppose someone approaches you on the street with the following proposition: You can receive either cash on the spot or a much larger contribution to your retirement account that likely will yield far more in the future. Do you choose the instant cash, or go with the retirement account?
The answer tells a lot about how people think, and about how public policymakers think people think.
Most people, it turns out, would choose the instant cash. Most policymakers, at least until somewhat recently, would have said that people would select the higher long-term payout of the retirement account.
Over the past two decades, policy planners from the Oval Office to the middle-school principal's office have become aware that people often do not behave rationally, nor even in their own best interests. Understanding why people act as they do is the basis of the growing discipline of behavioral science, which is helping shape policies that tackle society's biggest problems, from financial planning to public health.
"It is remarkable how little effort has been made to understand human behavior in policy circles," said Eldar Shafir, the Class of 1987 Professor in Behavioral Science and Public Policy and a leader in this field of research. "Policy depends upon people doing things that the policymakers expect them to do. Yet, there has been almost no attempt to understand what people actually do, what they can do and what they want to do."