Behavioral Economists Who are Changing the World
I suppose if there was a common perception of what an economist does, we might imagine tweed jacket, ivory tower and a complex financial theory scribbled on the blackboard. Little connection with the problems of the rest of us, in other words.
But take a look at Dan Ariely's list of the seven most powerful (behavioral) economists, and the work they are engaged in. Ariely, an economist himself, compiled the list for Forbes. Here are four of them.
Esther Dufolo, of MIT, is developing an understanding of the "financial, and social incentives of the poor, and the limitations imposed on them by their environment," Ariely writes. "She carries out clever experiments, mostly in third-world countries, that try to tease apart the causes for much of human misery. In the process, she is proposing solutions that are effective and efficient."
Uri Gneezy, University of California at San Diego, who studies the detrimental effects of financial incentives. "Among his findings: Giving people money for a certain behavior (relative to paying them nothing) can actually reduce the likelihood they will engage in this task, and that large incentives can actually hurt performance."
Or Harvard's David Laibson, who observes that people constantly make schemes to improve themselves -- quit smoking, lose weight -- but then don't follow through. "In the process, he's finding ways to enable people to commit themselves to courses of action that best reflect their long-run interests," Ariely writes.
Another economist on the list, across the Charles River from Laibson, at Harvard Business School, is Alvin Roth.
You may or may not have heard of Roth, but his work in market design and the science and art of "matching" has influenced everything from how kidney donors are paired with recipients to matching students with schools.
According to Ariely, Roth "is interested in how people behave in complex economic environments, and how those environments can be better designed to help people achieve better outcomes." If you need a kidney some day, Roth's work might save your life.
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