A talk on the bright and the dark sides of nudging
The light and the dark sides of nudging: a talk by Prof Liam Delaney, AIB Chair of Behavioural Economics, UCD.
Prof Liam Delaney’s talk at our third Noodle event was a departure for us. It was an evening kick-off, so there was more of a free and easy vibe in comparison to the breakfast slots for Noodle’s 1 & 2. Continuing the theme of the previous events, it was noticeable that we didn’t just have marketing people coming to it. We also had a range of business leaders who were curious to discover more creative ways to tackle problems.
Prof Delaney’s talk was all about the bright and the dark sides of ‘nudging’. Nudging is a way of getting people to choose something more readily than their normal defaults would incline them to do. He recapped how Nudge, the bestselling book on behavioural economics by Thaler & Sunstein, was itself a snappier way of conveying an idea than the more correct term of libertarian paternalism. He then moved on to look at how nudges are becoming a reasonably common tool used by an incredibly broad array of organisations. But right from the off, he sounded a warning note that far too many companies and organisations are using nudges in ways which are morally problematic. He conceded that of course, the goal of a business is not to be altruistic; referring to a conversation he had with a pre-crash banker who met his ideas with the retort that bankers can’t be social workers. The nub of his argument, though, is that those banks who preyed on the vulnerabilities in the decision-making processes of their customers ultimately hurt themselves, as well as the customer, when the bottom fell out of banking.
Inherent in Prof Delaney’s talk is the end-goal of a sustainable business ethically, and in terms of bottom-line success. While it is a fallacy to think that behavioural economics contains the answer to all of marketing’s problems, there’s no doubt that the systematic usage of its tenets is a marker of a company that is open to testing, willing to adapt, and keen to stay ahead of its rivals.
There are striking differences between how say, the public policy maker, head of marketing and head of sales will think of nudging. And these differences will further proliferate when one moves across different cultures and types of markets. Behavioural economics is being publicly debated when it is used by democratically elected governments to influence population behaviour, but it is much less probed when it is deployed in commerce. Prof Delaney’s talk was one chink of light into what is typically a darkened room for most of us, whether as consumers or people working in business.
To find out more about upcoming Noodle events – get in touch with Paul or Ken through [email protected]