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Nudge, Nudge, Fudge, Wink, Wink: The “Science” of Human Behaviour and Economics

I have been thinking about New Zealand’s Covid-19 strategy because it has been in the news for a variety of reasons, not least of all the court case that is being reported on daily — University of Auckland v. Siouxsie Wiles – where the latter is suing her employer for failure to protect her against public harassment over her public commentary on Covid-19, and her advocacy for lockdowns and vaccinations.

After medicine, I studied law, humanities, and ethics—making me full of useless information—and last year I delivered a lecture at a philosophy colloquium at USF in America. Other than diseases and pathology that I deal with every day, I have an interest in the human condition.

For me, the bugbear of New Zealand’s Covid’s strategy was not allowing our citizens to come home, even with quarantine. I had a patient whose daughter had finished her studies in the USA, but as student visas cannot be extended once the education has been completed, she was stranded as her own country would not let her in! This young lass was not lucky enough to win a place in the weekly lottery that was used to choose those who would be allowed entry. The family had to fund her stay for three months at a time in Mexico, Canada, and the USA alternatingly until the wretched system was discontinued. As a father of a daughter, I would have been at my wits end and unable to cope with the worry of my child being stuck overseas in an unknown country. 

When global crises occur, leaders need good advice. Politicians have science advisers that they trust but are all leaders astute in understanding that science can sometimes be unsound, biased, or sometimes scientists may simply go rogue. This is highlighted in the story I am going to tell you that reveals much about our time.

2008 was the year of the global financial crisis. Barack Obama was President of the United States. Around this time, Nudge: Improving Decisions about Health, Wealth, and Happiness, a bestselling book written by (later Nobel Laureate) Richard Thaler and Harvard Law Professor Cass Sunstein was released. President Obama was known to be deliberative and science-driven in his actions and this book caught his attention. Nudge was about changing the environment by altering the “architecture of choice” i.e., influencing the likelihood that one option is chosen over another by the general public—essentially what politics, and indeed elections, are all about. Thaler would go onto win the Nobel Prize in 2017, and Sunstein was from Harvard Law School where, as a law student, Obama had made history becoming the first black president of the Harvard Law Review in 1990. 

This book on behavioural economics did influence Obama’s decision making.  For example, there was a theory that money considered as income is more likely to be spent than money framed as wealth. Obama decided to not send out lumpsum stimulus cash cheques—as President Trump would do years later—but offered monthly tax deductions instead. Nudge was so influential that across the Atlantic, David Cameron, the UK Prime Minister installed a “Nudge Unit” two years later, in 2010.

Another superstar in the field of behavioural economics is Dan Ariely, the author of books such as Predictably Irrational: The Hidden Forces that Shape Our Decisions and Misbelief: What Makes Rational People Believe Irrational Things. Like the Nudge Unit, Dan Ariely was heavily involved in the Israeli government’s decisions on Covid-19 strategy and lockdowns. Following the success of “nudge” in becoming part of popular lexicon, Ariely coined the “fudge factor.”  

One of his famous experiments was to do with an insurance company and was published in the prestigious PNAS, edited by no less than Daniel Kahneman of Princeton University, one of Ariely’s early mentors, and considered a godfather of the field. When reporting average mileage of their motor vehicles –which in turn determined annual insurance premiums—this study had participants either fill a pledge at the beginning or an honesty declaration at the end. According to Ariely and his co-authors that included Francesca Gino, of Harvard University, those people that signed the forms at the beginning were more honest than those that signed the declaration at the end. This reduced the “fudge factor” Ariely said.  After nudge, fudge became a new buzzword in the field.

Such studies made Ariely a global icon, frequently asked to address tech titans such as Google and Amazon. His regular co-author, Gino was soon making a name for herself. She wrote Rebel Talent: Why It Pays to Break the Rules at Work and in Life, another book in the world of behavioural economics that in the past two decades has developed a cult following. In another study, Gino and Ariely collaborated on a study on females wearing designer sunglasses. Their study titled The Counterfeit Self: The Deceptive Costs of Faking It claimed that those wearing fake sunglasses cheated more across multiple tasks than did participants wearing authentic sunglasses. That would mean that rich folk were more honest than poor folk, which we know isn’t true. 

But now it turns out that these studies were simply made up for popular effect i.e., the results were meant for popular appeal, not science. Authors were writing up results that would sound cool to an adoring audience, eager to lap up new neuroscience theories. In an article for The New Yorker, Gideon Lewis-Kraus recently exposed both these authors for fabricating data. A team of researchers from a group that calls themselves Data Colada wrote a paper that has turned the world of behavioural economics upside down as they have found many more such examples. They found that not only was the automobile insurance study not replicable, but the data was also simply statistically impossible. As Forbes magazine concluded in an article titled An Influential Study of Dishonesty Was Dishonest

“These were not subtle problems either, but blatant ones. The end result was not only that the data was not correct, but that it was statistically impossible.” 

The insurance company in the study was not identified correctly, and the company (later) named has disassociated itself from the data. Mileage data appears to have been simply made up, and a junior researcher found the data actually revealed the opposite, and was told that it had been simply entered in the wrong column! These were world-leading professors being published in leading A-grade academic journals, no less. Ariely blamed the insurance company which has now released its internal documents that suggests that they were not to blame. 

Recently, Professor Francesca Gino, another dishonesty researcher, was placed on administrative leave by Harvard Business School and the matter of stripping her of her tenured post is now before the courts. If this goes ahead, it has been reported that this would be history-making, and the first time ever that Harvard University has forcibly stripped a tenured faculty member’s position this century! It turns out, as suggested by a report in Science that she had manually altered data in four papers that were considered influential and stands accused of academic fraud. 

All these revelations about the gurus of behavioural science have got me thinking about the state of humanity. Just as we don’t instinctively know what good health or healthy food is, we have lost our instincts. Our species evolved organically, yet everything we are trying to do with technology is not necessarily for our own improvement or wellness. What Walter Benjamin wrote in an essay during the Great Depression stands true today: 

“We have given up one portion of the human heritage after another and have often left it at the pawnbrokers for a hundredth of its true value, in exchange for the small change of “the contemporary.” The economic crisis is at the door, and behind it is the shadow of the approaching war. Holding on to things has become the monopoly of a few powerful people, who, God knows, are no more human than the many; for the most part, they are more barbaric, but not in the good way.”

Ultimately, the planet will exist without the provocations and pollutions of an oddball species that has considered itself greater than others. It could end up a Greek tragedy with the extinction of our species in a century. For now, beyond the fake sophistry of some politicians, scientists, and their billionaire backers, we have to find faith in each other, close our eyes to social media and listen to our inner voices. 

THE END

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Written By

Dr Sharad Paul

Dr Sharad Paul is an award winning, world renowned recognised skin-cancer expert and thought-leader.