From the White House to the Workplace
EEric Singler Hi, and welcome to a new episode of B.E. GOOD!, brought to you by BVA Nudge Unit, a global consultancy specializing in the application of behavioral science for successful behavior change. Every month we get to speak with a leader in the field of behavioral science in order to get to know more of them, their works and its application to emerging issues. My name is Eric Singler, founder of the BVA Nudge Unit, and with me is my colleague Scott Young.
SScott Young Hi Eric, it's so great to be joining you and I'm truly honored to introduce our guest today. On today's episode, we'll be speaking with Cass Sunstein. Cass is a world leader in behavioral science. He's a professor of law at Harvard Law School and the founder and director of the program on behavioral economics and public policy at Harvard law school. From 2009 to 2012, Cass was the administrator of the White House office of information and regulatory affairs. He's also a prolific author including the book 'Nudge, improving decisions about health, wealth, and happiness', which he co-authored with his friend and Nobel prize winner, Richard Thaler. And it's had an enormous impact in accelerating the application of behavioral science, particularly in the realm of government and public policy.
E Cass, I am especially honored to welcome you for at least two personal reasons. First, I met you some years ago when you were kind enough to be our keynote speaker at the first conference organized in France in 2017 on behavioral science. At that time, you played a key role in my country because we add the opportunity to meet President Macron, and now we have a behavioral science team in France created in 2018.
Again, you were kind enough to write a preface of my last book, Nudge Management; so thanks for everything and we are very happy and honored to have the opportunity of an in-depth conversation with you. Welcome, Cass.
CCass Sunstein: Hi. It's terrific to be here and to be able to visit and participate a little bit in the process in France. It's a great honor and to be able to say a little bit about your extraordinary book, just pointing out you've written an extraordinary book. That was also a great honor.
S Cass, one thing that's very intriguing to me is how a law professor became very interested in behavioral science. Could you start by telling us a little bit of your own history on how you discovered the field and perhaps how you met your friend Richard Thaler and how and why you decided to start working together?
C Yes. As a young law professor at the University of Chicago, I was surrounded by people who are greatly influenced by economics and people who had, several of them won Nobel prizes.
In a locker room, in an athletic facility, I was speaking to a very distinguished economist and law professor about my skepticism about the idea that human beings were fully rational, and he said, your skepticism has no justification and you're full of nonsense and you appear to be writing about this, and that's really a very, very bad idea. But there's someone who also has a bad idea, a young economist at Cornell named Thaler, and he said, you should look up this very bad, useless economist and try to figure out what you have in common and why you're making the same errors that he's making.
I thought this is extremely important and valuable. And I read Thaler’s work and thought, oh man, there's a whole world of insight here that it would be very good to benefit from. And I tried my best and wrote some papers and they became kind of early works in behavioral analysis of law and public policy. And then Thaler came to the University of Chicago and that was for me a defining, change in life. I sent him a note saying, why don't we have lunch? And we became fast friends and he was actually working at the time on a paper with an economist Christine Jolls, on the topic of, behavioral economics and law. And he was going very slowly with the paper and I kept asking him every lunch, when's that paper going to be out? When can I read that paper? And finally I said to him, you know, if you don't write that paper, I'm going to do it. I've started writing one and mine won't be as good, but it will exist. And he looked at me and said, you know what, why don't you join our paper? And then the three of us wrote a lengthy paper together. And that was really the start of now, something like 15 or 20 years collaboration.
E Cass, could you tell us more about why you decided to write the book Nudge, which as revolutionized public policy?
C Yes. We had a lunch maybe seven years before we wrote Nudge. And Thaler said he had been at a workshop where he was talking about some of the ideas in our previous paper where he had a notion called, we're not pro paternalism, but we're anti-anti paternalism. And what we meant by anti-anti paternalism is that many of the people who are against paternalism are stuck in the idea of the people always make the best choices for themselves. And we think that foundation for Anti paternalism, which goes back to John Stuart Mill, was not sound.
Thaler said he was talking about that in a workshop, and the economists were giving him a very hard time. And he said, you know what, we're for libertarian paternalism. That was just a spur of the moment response to a skeptical economist. And he said, do you think there's anything there that we should maybe try to write up? And we wrote a very short paper for an economics journal and a very long paper for a law review, both of which had libertarian paternalism in the title. And that paper, to our surprise, got a ton of attention both among, law professors and among economists. So the law version was called "Libertarian paternalism is Not an Oxymoron", and that's doomed as a title of a paper. That paper should be a catastrophic failure. That's the worst imaginable title. And yet people were really interested in it.
Thaler is not thrilled to write another book. It's not his favorite thing. He's more an article kind of a guy. Anytime the question is raised, do you want to write a book? I start smiling. And so we were a very good team in the sense that he has a lot of quality control, that is, he doesn't want a sentence that he doesn't feel very comfortable with. And I have a lot of energy. I'll produce a lot of sentences and then he can take out the ones that aren't good enough.
E And could you tell us a bit about your experience as administrator of the OIRA and your work at the Obama White House? First of all, could you tell us how you met Barack Obama?
C Yes. Barack Obama as he used to be called was first drawn to my attention by a colleague who said, there's a young law student at Harvard whom we should consider at the university of Chicago for our faculty.
And I said, what's his name? And he said, I remember this as if it was this morning; He said, you're not going to believe his name, Barack Obama. Now it's a very familiar name, but at the time it was just a really unusual name for anyone in the United States. And he said, we should hire the guy, he's phenomenal. So when he came in to maybe be hired, I met him.
When he ran for the Senate and then the presidency, I was an informal adviser. I tried not to bother him a whole lot, because the whole world was on him, but if he wanted me to help him with anything, I'd be there in a heartbeat.
When he became president, the question became what would I do when the new administration, and there are a lot of good jobs that anyone would be honored to have, and my first choice was the office of information and regulatory affairs, which amused many people. It's not a cabinet position. It's not the most famous job there is.
But I knew from my law work actually that in six months in that position, you could do so much to help the country and the world, because what the job entails is you're overseeing all of the regulatory apparatus of the government, including healthcare, pandemic response, and I worked on that in connection with some pandemics, with respect to clean air and clean water, including the climate change problem, civil rights, including discrimination on the basis of race and sex and sexual orientation. The issues about highway safety and food safety. So the scope of the job is extremely wide and the chance to do something that would save 500 lives because of something you do on a Wednesday, it's really there. And I thought if I could have any job, that would be the one I would like.
I was there for about four years and we were also able to do some things on clean air policy and civil rights issues. I tried to eliminate discrimination on the basis of sexual orientation, to do things to make the workplace safer, to do things to reduce the risk of the people would die from air pollution. And I was very pleased to see the President Trump administration released a report on the costs and benefits of regulations over the previous 10 years. And it showed that if you compare the benefits of regulations in the Obama period to the costs, we're talking somewhere in excess of 125 billion Euros in benefits. And those involved to some extent purely economic savings; cars are more fuel efficient, so cheaper to drive to some extent to a major extent, health benefits. And this took an extremely big team and much of it's being continued under president Trump.
Actually that was a significant chunk of my job. And so we did things like automatically enroll poor children in meals, lunches and breakfasts for which they would otherwise have to apply, and 15 million kids are now enjoying meals to which they're legally entitled in significant part - because of the shift from “you have to apply” to “you're automatically enrolled".
We did a lot to make credit card users more informed about the terms of their agreements, and data suggests that behaviourally-informed approaches are saving consumers over $10 billion. And most of the savings are concentrated in people who don't have good credit ratings and tend to be economically struggling. So that one seems to have been basically the right direction to go.
We did something to make airline fares more transparent so that when people are buying airline tickets they see all the taxes and fees. And this was just a hunch that that would be very helpful to consumers. It would make airlines adjust their prices downwards. The evidence suggests that it worked beyond our wildest dreams in protecting consumers against very high airline prices. This is stuff that the apparatus of our government did and it really came in large part from a conversation in the Roosevelt room, it's my favorite room in the White House, right next to the Oval office where President Obama said to me, if it's really going to help people, but hurt the economy a bit, go ahead and do that. And the expression on his face was not as a friend. It was as a boss. He was telling me what to do.
E And what was your primary learning and takeaway from that experience?
C So it's a little simple but in the world of law professors, people undervalue the importance of just asking the public: “What do you think?”
So we did a bunch of proposals, some of them were behaviorally informed, we thought, some of them were more just mandates involving the environment or worker protection, and comments would come in from companies, from labor unions, from public interest organizations, from scientists, from social scientists, that were in some cases self-serving, but in the vast majority of cases, informative. They tell us something we didn't know.
So a company might say 70% of what you're doing is sensible but 30% of it is dumb, and here's exactly why. It's going to have effects you didn't anticipate. And if they said 30% was dumb, it would be surprising if 30% really was dumb, but it would be inevitable that five to 10% was dumb. So they'd be telling us something that would redirect our judgment.
Of course, this is in a time of Coronavirus, but I saw it on much more mundane stuff where there'd be some scientists who specialized in food safety, who tell us on a Monday this food safety protection effort is mistaken because the thing the government's trying to regulate is not dangerous. Don't do it. Or they'd say on a Friday, you're being much too cautious with respect to this public health problem. The risks actually are a lot higher than the policy people and the ministry think. And I'm talking about scientists within the government who would say this. We have this office of science and technology policy (OSTP) and some of those people became my heroes.
Also other heroes were in the Council of Economic Advisors. It is an important government agency, even though it doesn't really have authority. It's more advisory on economic questions; how you think about something that has a significant economic impact. It may affect workers and labor unions. It may affect automobile companies. There are debates. I admire and sometimes play an economist on TV but I'm not one; I kind of developed a rule which is if the council of economic advisors says something about economics, that's gospel; meaning that's going to stick for the government. If other economists or other policy people have a different view on the economic issues, they're arguing against the gospel and that's going to be hard. And I can't think of a single case where on an economic issue the council of economic advisors was overridden by someone else on my watch, and that's not because I did anything except adopt a rule which is they're the experts. Now of course they would talk with other experts and they might be convinced about something, but their expertise not on a political issue, not on abortion, not on civil rights, but on an economic issue, I learned we need a very large place for the technical specialist.
E Do you have any advice for other behavioral scientists who are trying to positively influence government and public policy?
C I do, which is two things which are actually very different. One is we have a lot of learning in the world of behavioral science that is somewhere between very solid and solid.
So we know for example, if you switch from an opt-in policy to an opt-out policy, the participation rate is likely to go up very significantly. We know also that if you inform the public about what most people are doing, that's highly likely to increase the number of people who are doing it.
So if you say most people are wearing masks when they go outdoors in your community, it had better be true. But if it is true, telling people about it is likely to increase behavior. So those are two really solid findings. And these points, which know to be true, are helpful in advising governments for policies to be rolled out immediately. So the second piece of advice is, if you don't know what approach is going to work, try a couple of different approaches and see what you learn. Now that approach has been very effective for governments all over the world. and so I am enthusiastic about it.
I think the behavioral scientists have somewhat underrated the importance of using what's clearly known and mildly overrated the value of experiments. But in government, both have been underrated.
But if you have a problem let's say, it's highway deaths, we know a lot about what to do in every country. There's a big document from the US department of transportation, it's something like 400 or 500 pages which is about reducing highway deaths, and it just uses what we know. And if Saudi Arabia or Germany used that, we'd save lives in both countries, and that's just based on what we know.
One of my friends in the government said two things. He says, if you want a friend in Washington, get a dog. And he also said, there's no tomorrow.
And experiments are essential, but they're very slow burning. They're like a television drama that starts with something romantic or something menacing and you really don't know what it is, and it's not until episode three that you find out. And that doesn’t work if you need to do something that has a fast impact and you need to make a lot of progress in a hurry. And I've been pleased to see that in some places during the pandemic, some governments have used things we know about the importance of simplification or the importance of social terms, the importance of making things easy for people. They've just used that like in a week, while experiments are ongoing. Experiments are really important. But if you can save lives today, based on what you know works, you need do that.
S The things that's been so impressive about your career is the sheer breadth of topics and challenges that you've addressed. You've already shared a little bit of your secret to being such a prolific author which seems to be a combination of curiosity, a passion and energy. But I'm really curious about your guiding principles when you choose topics or projects. Are you thinking in terms of influencing other people or is it primarily a question of following your own intellectual curiosity and interest?
C I don't know if this is a general phenomenon. I bet it is. There are some ideas or projects, aren't there, Where all of us have something equivalent to a tingle in our neck? It happens maybe once a year where I get the tingle and that is a heuristic for me. So have a new heuristic we've invented, the tingle heuristic, which means go study and write about that.
I'll give an example from an obsession I've had over the last two years which is that people sometimes seek information and they sometimes don't. And one reason they don't is it's going to make them scared or sad. And that universal phenomenon has produced a tingle for me, because it has a bearing on public policy. What kind of information disclosure will be effective? What kind of information disclosure should be mandated? If you make people scared or sad, that might not be a sufficient reason not to disclose the information, but it is a point against disclosure.
And so the idea of the emotional impact of telling people things; To me, that’s intriguing and puzzling, and it bears both on practice on the fundamentals of what it means to be human.
Think of the Garden of Eden. That's what it's about. Information seeking and the complexity. You could read the Garden of Eden story in multiple different ways but at a minimum, it's a complex matter, what you get when you unleash the Tree of Knowledge. And in an era in which it's possible to tell people you're likely to die in this year, or yes, you're probably going to get Alzheimer's; or if you do this, your risk of coming down with some problem is really low. Or if you date that person, it's probably not going to work out. Yes, you can tell people that information, but what impact will it have? So that that produces the tingle in me. And I've been intrigued in that issue right now. To try to do something to have influence, to try to do something academic to have influence, I think is unpromising. Samuel Johnson said nothing is more doomed to failure than a scheme of merriment. Merriment is often a byproduct of something else. You decide to have an event and then you're going to do something, dance, or read or whatever. And then the merriment is a byproduct. I think having influence is typically not a product of wanting to have influence. It's a product of being interested in something or knowing something that other people find potentially valuable. So in the world of behavioral science, what's happened in multiple nations is a product of people knowing things that have interested them that turned out to be useful.
S Cass, one issue of personal interest to me is polarization. And it strikes me that behavioral science has a great deal of value in diagnosing some of the heuristics that are pulling people and societies apart. But I was wondering your perspective in terms of how behavioral science may be able to play a role in countering some of these forces and helping bring societies back together.
C Okay. On polarization, a number of years ago I was involved in a project about a jury behavior. And we did something asking individuals how outraged they are by certain forms of misconduct. We got a bunch of data. And people reacted to our paper which we published by saying you're not talking about deliberating juries, it's just individuals. And we said well, deliberating juries would be just the average or the median of the individual. And critic said how do you know? That was a good question. So we tested it with a big project about deliberating groups and we found we were wrong. We found that groups tend to end up more outraged (than their individual members), if they start out a little bit outraged. So in a case involving a failed baldness cure, people think that's not such a big deal. And then in a group, they don't care at all. They think that's nothing.
The case where an exercise machine breaks down and injures old people, they start out outraged and after they talk to each other, they end up wildly outraged. Okay. So that was a tingle finding. You and I share this completely. And the tingle was, oh, if people who are agreeing with each other talk to each other, apparently they end up much more extreme. And that little data involving how juries behave got me attentive to behavioral work showing that this is a regularity and it bears on politics. So if you get people together who think that the nation's leader is good, if they talk to each other, they'll think he's great. Or if you've got a group of people who think he's doing a bad job, after they talk to each other, they'll think he's doing a terrible job. And since there are different groups who have different inclinations, their speaking to one another can produce very acute polarization.
And we're observing that certainly in Germany and in India and in the United States, all three. And whether the extreme adoration or the extreme antipathy is a good idea, is a different question. But if it's just growing out of social interactions, there's trouble in all countries including democracies.
So what can you do about it? I'll give you an idea that’s connected with our discussion so far, but is not extremely popular. But give a big role for the technocrats. Let the experts figure things out when there are factual questions and treat the polarization as background noise.
So if the question is “What's going to work with respect to a pandemic or occupational health problems?” you want the people who know to be doing the foundational work. The, we can let a democracy assess whether this is in the end acceptable, but don't put it to something like a referendum.
I saw this close up where there were some things that were really infuriating people or exciting people on the left and the right that were happening in our government. And so long as the people who really knew what they were doing were trying to figure out what to do, the fact that people were all upset with each other, it was like a TV show and not a very interesting one. And I think democracies need to be very open to that especially when times are really tough but even when they aren't so tough. Of course in democracies, it's the people who are ultimately in charge. But not the like-minded groups on either side who are charging themselves up.
So there's a political scientist named James Fishkin who's pioneered something called the deliberative opinion poll where he says to make policy by just calling people up on the phone and say what do you think about this problem, and then aggregating, that's kind of crazy. So he gets a bunch of people in a room with different points of view and gives them some information then ask them talk it through. And that's less technocratic, but it's informed. And what emerges from the deliberative opinion poll as he calls it has a kind of authority that a mere survey wouldn't.
Or you could be less formal about it and just create locations online or elsewhere where people get to know each other and talk to each other about policy issues. Once you see that it's a human being who's mortal, who has friends and family, you'll probably learn something about them which will make them more human to you. And you'll also learn either that their point of view is something that you could learn from, or the very fact that they hold that point of view is something you can learn from. I found in Washington some of my most productive interactions were with people who really didn't like president Obama, people who were very much right of center. I liked them and I learned from them. And if they were concerned about something, they were either right or they had a reason that I better try to understand. It might help with communication. It might help with altering the policy. So I think we are badly in need of democracy in which people are getting together across political lines and not able to dismiss as the person that's saying or that's one of them.
E Cass, another key topic is behavioral science in the workplace. From your point of view, how could behavioral science learning be applied by organizations in the private sector and for which type of questions?
C Okay, that's a fantastic question. And we're really at the early stages of this.
We know a lot about what makes workers distracted or miserable. And this is broadly speaking behavioral, and some of it is connected with behavioral science on well being. So we know if people feel humiliated or disrespected, they're not going to have a very good day. If people feel that they have agency and control, that often makes them feel the day's going pretty well.
And there are things just with respect to agency and control versus humiliation and stigma that any manager can use by introducing sincere, statements of admiration or respect or gratitude into the workplace more frequently. So this is just a behavioral point about workplace satisfaction.
Now with respect to performance, there are things that interfere with productivity such as being unhappy, being distracted, not having a sense of agency and control, and there are ways to address that. We worked with an organization in California that is very actively involved in this, that uses nudges actually to try to increase workers and managers’ wellbeing and productivity. And this can be done you know on a small scale by someone who's running a little business or it can be done on a large scale by someone who's running one of the nation's large companies. And I've observed in a kind of anecdotal way, large companies either starting to use behavioral science to nudge their people in directions that make things work better or be very systematic about it and scientific, and I think that is the way of the future. And it might sound to some a little kind of mechanical and scientific and not the best way, but if you think of it as a human enterprise where workers all over the world are having a tough time, something that gives them power and agency to make a decision can make a big difference. Or perhaps a mechanism by which someone whom they respect tells them that what you're doing is phenomenal. To be recognized that way can have an impact.
E Cass, we have been together as members of the Nudging For Good Awards that is organized every two years by the AIM, European Brands Association. The purpose of the Nudging for Good Awards is to promote application of the nudge approach by the consumer goods companies to help consumers make better and healthier choices. Cass, what do you think about this initiative?
C Okay. I've loved what's being done with the Nudging for good awards and I loved it before I was part of it, and then I was lucky enough to be part of the jury and I thought this is really a way of the future. There are a few things that are inspiring about this. One is there are companies all over Europe, and increasingly the world who are using behavioral science either to help people, could be workers, it could be customers, or to help themselves. And frequently it's both. And that's the best. A company that is able to prosper and grow at the same time that it's improving the health and wellbeing of its customers, or it's producing a new product that is going to be healthier for people.
And I've observed just informally that the public visibility of the nudging for good awards has gotten other companies to think 'can we do that?' So I hope we'll be seeing a lot of this all over the world.
I've spent time recently in United Arab Emirates and in Qatar and in India; these are countries which are keenly interested in using behavioral science and nudging to help with issues of public health, public safety and poverty reduction, and to see the private sector innovating here is a very promising way forward especially if you have local knowledge (as a company will) of customers and that can unleash creativity.
E Cass, what advice would you give to businesses and practitioners within these companies, to help them infuse behavioral science thinking and learning within their organizations?
C The first thing I would do as an adviser is ask a ton of questions. So to get clarity about what the current challenges are before offering any advice. But I'll give a stylized example.
I’ll make up a hypothetical. Suppose Coca-Cola says, look we want to shift in a direction that will improve public health. We want to do well by our stockholders and we want to sell a lot of our products, but we want to move toward greater public health. Okay, so there's a question. What are the product offerings now that are best on those dimensions and why are they selling?
And you might know that the reason they're not selling is there's a certain heuristic associated with them that is negative, and then you can work on that. So applying behavioral science to market something in a way that triggers positive emotions. Or you might know that that your offerings have certain default options in them that aren't very healthy. So it might be that when teenagers get a package, the default offerings in the package have a lot of sugar and have a lot of calories. Well, you can change the default offering, that could have a big impact. Or you could have a new product which will have healthy offerings in it. Pepsi actually has completely done that, has a vending machine called “Hello Goodness” which is behaviorally very smart. It could work with social norms. So it could have advertising campaign that points out that people of certain demographic groups are increasingly purchasing these products. Now if that's true, there's so much data that suggests it will be a self-fulfilling prophecy. If you're a hospital, there's a lot you can do to get patients to adhere to medical prescriptions.
125,000 people die in my country every year because they don't take their medicines, but there's a lot you can do with reminders, with simplification, with habit building that can make that problem much less.
So once you identify the problem, we have a bunch of solutions, and as noted, I've given “off the rack” evidence-based prescriptions, but you can also test and for businesses to test and learn is certainly a really good idea. And businesses often have more flexibility to test than governments do, and they can do it quickly. I'll give another example. Suppose you're a travel agency and in a time when travel is restored to normalcy, you want people traveling in a way that's environmentally better than the way that they are on average traveling. You can have the environmentally friendly options be first, or you can have a green check mark next to them and you can test options and see which approaches have the biggest impact.
S Cass, we're recording this session in mid April of 2020 and there's obviously one enormous issue on everyone's mind which is the Coronavirus. And we'd love to hear your perspective on it. Where and how do you think the behavioral science community can have the greatest opportunity to help make a difference? Do you feel it lies in influencing governments and their response to the crisis or perhaps in nudging people and their personal behaviors?
C Well, if I had to pick one, I'd say working with governments to promote better behavior. So what whatever the policy prescription is, let's say it's wash your hands a lot or stay at home or don't touch your face or stay six meters or whatever away from people, there are tools that can make that more likely to happen.To invoke the social norm, wearing masks. To have prominent people wear masks. To say very clearly that masks are lifesavers for you and others.
There's recent data suggesting intriguingly that it's more effective to tell people that the desirable behavior will ensure that they don't infect others or will reduce the risk that they will infect others, then to tell them it will protect them themselves against the risk of infection. That's interesting. It's early to know whether that's solid but it's an intriguing possibility that the best way to get people to take precautionary behavior is to tell them don't hurt other people, rather than to tell them protect yourself.
I've been working informally with international organizations which are doing a lot of testing of what works best. The framework from the United Kingdom, the East framework (easy attractive social timely) is completely transferable to the coronavirus problem. I do think with respect to policy making generally, it’s a really good idea to think constantly of what you get and what do you lose by various measures. And the data suggests that stay at home policies are very costly and that's a problem. But that the public health benefits amply justify them, at least in many nations in the period in which the virus is exploding. And so to keep one's eye on the consequences of the alternative approaches, with numbers to the extent possible, is the foundation for deciding what kind of lockdown should be required or advised
E Cass, the Behavioral Scientist publication has recently asked the behavioral science community to write comments about the future of BeSci. What is your vision of the future of our field?
C I think I declined to answer that question from an email, and I'll give you the reason. One of my great heroes is Friedrich Hayek. And I think Hayek's great insight is that the desires and knowledge of individuals is extremely dispersed. And I think of Hayek who's politically associated with the right as I'm not, but I think Hayek's great insight is that the desires and knowledge of individuals is extremely dispersed, and a central planet is going to find it very challenging to have as much information as they have.
As a famous baseball player once said, predictions are difficult especially about the future; And the challenge here which is I think a joyful one is that where behavioral science is going will be the product first of individual minds that locate something really important. If we knew it was going to happen, it would've happened already.
Two people right now are in a place where they are going to talk and there's going to be synergy and something really surprising is going to happen. And if we could anticipate it, we'd know it. But we don't.
So I'll give you an example of an idea which is both powerfully important and I think underused, and that's the idea of cognitive scarcity which came from a collaboration by Sendhil Mullainathan, the economist and Eldar Shafir, the psychologist.
I'm reasonably confident that their own collaboration on this came as a result of happenstance and accident. And what they say is that if you are sick, old, lonely, busy, or poor, your mental bandwidth is really limited. And that that has massive implications for governments and for companies. For example, take a large international company, Toyota; I like Toyota. I have a Toyota. But what they're doing is insufficiently attuned to the cognitive scarcity of its purchasers, and that will cause its marketing and its product to be less good than it could be. It’s the same for governments, as their policies are often not focused on peoples’ limited cognitive capacity.
It’s not people are stupid, they just don't have unlimited processing power. So if they're asked to fill out forms or to wait in lines or to manage some administrative burden, that might be too much. I think the area of limited attention and cognitive scarcity, that's a growth area for theory. The closest thing we have to a unifying account of behavioral biases is about behavioral attention, and you kind of fit a lot of what we have learned about present bias or about the power of default rules under the general rubric of behavioral inattention. And that is closely associated with scarcity, which manifests itself particularly in people who have a disability of one or another kind. Maybe they're struggling with depression or anxiety, or maybe they're elderly or maybe they're female and they have to bear the household burdens which means their capacity to navigate something else is reduced because they're dealing with kids. This is conceptually I think a very rich area for academic work both theoretical and empirical. And if I had one area for governments to focus on as well as for companies, it would start from the foundation that people's capacity to attend to anything is somewhere between 10 and 50% less than you think.
E Thanks Cass. Very insightful. A final question. You are one of the most influential thinkers in the world. You have written a lot of books, you have been an influential advisor at the White House, a professor at one the best universities in the world, and have spoken at many conferences around the world. Do you think you have a mission in life?
C Well,
S Well, as a fellow dog owner and dog lover, I certainly am in agreement with that sentiment. And it's also a very nice positive note on which for us to conclude today. Cass, I'd like to wrap things up by thanking you for spending your time and sharing your thoughts with us and our listeners. Are there any final comments you'd like to share with everyone?
C Well, I will tell you my current aspiration, which is to write a little book called Sludge, where sludge is frictions or administrative burdens or paperwork or reporting requirements that the private or public sector imposes on people that cause shocking damage. And I'm focused on this right now because the United States has quietly started a war on sludge. So it's like we're seeing sprouts of trees everywhere and the trees cut out sludge. It might come from a program that's an antipoverty program where people don't have to wait through the sludge as much. Or it might be where people who are entitled to economic relief don't have to apply. It just shows up in their bank account.
And this war on sludge that the pandemic is producing is uncoordinated, meaning it's just a bunch of public officials working independently and making sensible choices, but the war on sludge should be an ongoing affair, rather than just a one-night-stand.