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ALEX COHEN, host:

This is Day to Day. I'm Alex Cohen.

MADELEINE BRAND, host:

And I'm Madeleine Brand. An economist at the international airport in Amsterdam noticed a problem with the men's urinals. They were, simply put, disgusting. Lots of spillage. So, this economist came up with a plan - etch a drawing of a fly into the urinal, a target of sorts, right next to the drainage holes. The result, well, aim improved and the bathrooms stopped smelling quite so revolting. This is something called choice architecture and joining us to explain how and why this works is economist Richard Thaler. He and fellow University of Chicago professor Cass Sunstein are the authors of a new book, it's called "Nudge: Improving Decisions About Health, Wealth and Happiness." And Richard Thaler, welcome to the program. In this anecdote, why is such a simple solution, why does that work so well, and how is this an example of what you have called choice architecture.

Professor RICHARD THALER (Economics, University of Chicago): The urinal example is a nice illustration of what we call a nudge. So, the picture of the housefly that's been etched into the urinals - the men notice it, most of the men I think actually think it's real, so they aim. And so, they pay attention to a task that they normally don't and as a result they do it more successfully.

BRAND: So, you think that kind of small decisions that each person can make if they are nudged in the right way can actually lead to a big outcome?

Prof. THALER: That's right. There's a nice example we discuss in the book about something called the ambient orb, which is a little device people put into their homes, a little light that would start glowing and the more electricity you were using, the brighter it would glow. Installing that in people's homes cut utility bills by 40 percent.

BRAND: Wow, and also what you seem to be all about is not necessarily mandating these changes, but getting people to do them on their own.

Prof. THALER: We have a phrase that describes our philosophy. It's a bit of a mouthful. We called it libertarian paternalism, seemingly an oxymoron, but what we're interested in is helping people make better choices - that's the paternalistic part, without forcing them to do anything and protecting their freedom to choose, that's the libertarian part. So, in the urinal no one is telling anybody that they should aim more carefully as their mother's once did. They are just subtly influencing their behavior in a way that benefits everybody.

BRAND: What if people though they want to change their behavior, they know that they should for example lose weight or quit smoking, or do something that will benefit them, but they just can't seem to do it. And they don't have someone like you, a choice architect, to get them to do it for them. What should they do?

Prof. THALER: Well, one of the strategies that seems to work is to announce their intentions and make them public. And an even better strategy is to make a bet with somebody. And we tell the story in the book about two friends who when they were in graduate school found that they were gaining a lot of weight, especially when they were on the job market. And so they made a bet with one another that they would lose 30 pounds and after six months there would be a weigh-in, and if either of them failed to make their weight cutoff they would pay the other several thousand dollars. And this strategy worked, they both lost all the weight. One of those fellows, Dean Karlin, now a professor at Yale University, has started a website called stickk.com, that's two K's, S-T-I-C-K-K dot com, where it's a place where people can go to make these sort of commitment wagers. So, you could say I'm going to lose ten pounds and if I don't I'll donate 1,000 dollars to the political party I hate. And I think that's probably a very successful commitment strategy.

BRAND: Now, you write actually that this has been very successful in some trials on smoking, to get people to stop smoking, but why does it work? Why does that work more than any other strategy?

Prof. THALER: We have lots of research that suggests that losing money hurts about twice as much as gaining money feels good. So, if on one day you lose 100 dollars, and on the next day you win 100 dollars, you're not even. You're behind in utility terms.

BRAND: What do you say to people who worry that nudging is a lot like subliminal advertising? And people don't really like to be manipulated in that way. And how would you know that you are being manipulated for good and not for evil?

Prof. THALER: We propose what philosopher John Rawls called the publicity test. And the idea is that any policy you adopt you should be willing to tell people about. We're not interested in subversive nudging, or subliminal nudging, and we think all the nudging should be aboveboard and transparent.

BRAND: You give a funny example about maybe putting mirrors in cafeterias. Now, would that be good nudging or bad nudging?

Prof. THALER: Oh, I think that's good nudging, and in fact there's a nice psychology experiment that suggests that it works. So if there are mirrors in the cafeteria people are more likely to head to the salad bar if they get a glimpse of what they look like. Now, we have suggested that you...

BRAND: I call that bad nudging!

(Soundbite of laughter)

Prof. THALER: Well, we have suggested that, you know, you could push this. Certainly explicitly unflattering mirrors would do the job better, and you know, on the other hand of course maybe some fast food places put in special thinning mirrors as people walk in to order their double-cheeseburger and fries.

BRAND: And that's what I mean. Like, people when they get - when they see what's going on literally behind the mirror, they don't like that. They don't like to be, you know, manipulated in that way.

Prof. THALER: Well, I don't think they like it, but they are. There's a company, I won't mention the name of the company, but they produce deliciously fattening cinnamon buns. One of their marketing strategies is to pump the aromas from their ovens out into the hall. Now, that works. It's like the pied piper. It brings people into the store to buy those fattening cinnamon buns. The problem is we can't eliminate nudging. It's there. We can't eliminate choice architecture anymore than we can eliminate architecture.

BRAND: Richard Thaler, thanks for joining us.

Prof. THALER: Well, it's been my pleasure. Thanks for having me.

BRAND: That's Richard Thaler. He's an economics professor at the University of Chicago. Coauthor of the book "Nudge: Improving Decisions About Health, Wealth, and Happiness." Here's a gentle nudge. NPR's Day to Day continues.

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