Richard H. Thaler's Blog, page 4

Is Oscar voting tilted against Avatar?

The Academy of Motion Picture Arts and Sciences has adopted a new voting system for the 2010 race, and an article in this week's New Yorker argues that it's likely to harm Avatar's chances. (Hat tip: Kare Anderson)

Instead of a simple ballot system where the movie with the most votes wins, the Academy is using a what is known as an instant-runoff system. It works like this: Voters rank the ten nominees in order of preference from 1 to 10. If no movie gets a majority of first place votes...

The bank as lottery idea gains momentum in Michigan

Anne Stuhldreher follows up on the results of Save to Win in the Washington Post.

More than 11,000 Michigan residents opened accounts through the contest, saving $8.6 million throughout 2009. People can open the accounts — they're like certificates of deposit — with as little as $25. They need to keep their money in for at least a year and can make deposits as small as $1 as often as they like.

More than half of the participants said they hadn't saved regularly before opening their accounts...

Keep the change is good for you, great for Bank of America

Readers have been interested in Bank of America's Keep the Change program, which began in 2005, as a vehicle for boosting savings, and possibly charitable donations. There's no charity option yet, but what about the savings benefits to participants? A 2008 Peter Tufano and Daniel Schneider paper has some answers.

Bank of America attributes 1.8 million new savings accounts to the Keep the Change program…and as of April 2007, its 4.3 million program participants had saved approximately $400...

Nudging truckers

Marc Gunther at the Energy Collective reports on two interesting case studies of greening company truck fleets. The first strategy was to spark friendly competition

When Chris McKenna, who manages a fleet of trucks for Poland Spring, learned that the company's drivers were racking up as much as 1,400 hours a month of idle time, he saw an opportunity to make a difference. Running truck engines in winter kept the cabs warm — the company is based in Maine — but it cost Poland Spring money and...

Homeowners are thinking about walking away from their mortgages. Banks are thinking about which homeowners are most likely to walk away.

Richard Thaler recently asked why so few people have walked away from their mortgage. Today, the New York Times reported that more homeowners are thinking about it. They aren't the only ones thinking about it. Banks are trying to figure out who is strategically defaulting.

Sometimes lenders go after borrowers walking away from their homes if they have other assets, according to Florida real estate attorney Larry Tolchinsky.

"Banks are pulling credit reports to see if it's a strategic default,"...

The paradox of choice…now in 2D

As Nudge blog readers know well, the paradox of choice is the paralysis that accompanies decision making as the number of available options increases. It's harder to pick a prescription drug plan when there are 60 plans than when there are four.

Three marketing researchers think there's more to the paradox of choice than, well, choice. In the paper "Variety, Vice and Virtue: How Assortment Size Influences Option Choice," they argue that the object consumers are making a decision about matters...

Sendhil Mullainathan on behavioral economics and the hardest social problems

MacArthur winner and Harvard behavioral economist Sendhil Mullainathan talks about a tricky set of social problems — those we know how to solve, but don't. We know how to reduce child deaths due to diarrhea, how to prevent diabetes-related blindness and how to implement solar-cell technology … yet somehow, we don't or can't. Why?

Filed under: Blog posts Tagged: behavioral economics

Assorted links

1) Richard Thaler and George Osborne in the Guardian. U.K. pilot recycling programs to replace fines with rewards are showing results.

2) A new study finds calorie labeling for a hypothetical McDonald's meal reduces calorie consumption. One key difference from past studies: People aren't ordering meals for themselves. Parents are ordering meals for their children. Hat tip: Patti Hunter.

3) Crayola's law says that the number of Crayola colors doubles every 28 years. How much faster do children...

Zoom-Shroom in the Mazda 5

Yale economist Dean Karlan reports on a nudge gone bad in the Mazda 5. Its choice architecture turned out to have serious consequences during a recent trip out west. Beware the car's dashboard.

(The Mazda 5) has sensors to know whether it is dark out, to turn the lights on. But here is the kicker: it only turns the dashboard lights on, not the headlights! So my subconscious thought the headlights were on, and I didn't turn them on. Until a cop pulled me over. And then said we fit his...

Is "trash" keeping us from recycling?

Reader Jason Bade writes in with a comment about the power of labels on decision making about recycling.

Oftentimes, we are given two options when it comes to disposing of our refuse: "Recycle" and "Trash." When one approaches a recycling receptacle, one is confronted by a set of rules that are rather easy to break, even if by accident (for example, I can recycle a plastic milk bottle, but not a plastic soap bottle). Because we, as humans, are lazy, we tend toward the option that carries with...