We’ve been working on nudges, randomized controlled trials and systematic reviews for years. Now, with big data, we’re proposing experimentation. This is what governments in the developed economies are doing.
Perhaps even more than new ideas, the behavioral group is bringing a new approach to government. Experimentation is the key: Different nudges are tried systematically, results are quantified and, even after the best approach is selected, the team goes back to see how things are working.
The team, for example, created eight versions of an email encouraging members of the military to enroll in a retirement savings program. About 80,000 service members received each version. The most effective, which combined step-by-step instructions with an example of how much a person could save by putting away a little money each month, roughly doubled enrollment rates.
These efforts are informed by common sense as much as academic insight. People are more likely to do things that are easier to do. Yet simplicity has rarely been a priority in the development of federal programs. “They’ve been more worried about making sure it’s legally perfect than making sure it’s understandable to anybody,” Mr. Thaler said. “So there’s a lot of room to simplify things.”
How can we get our governments to do the same?