"No one ever got fired for buying IBM" is a wonderful example of understanding loss aversion or "defensive decision making". The advertising and marketing industry kind of acted as if it knew this stuff—but where we were disgracefully bad is that no one really attempted to sit down and codify it. When I discovered Nudge by Richard Thaler and Cass Sunstein, and the whole other corpus on Behavioral Economics…. when I started discovering there was a whole field of literature about "this thing for which we have no name" …. these powerful forces which no one properly understood—that was incredibly exciting. And the effect of these changes can be an order of magnitude. This is the important thing. Really small interventions can have huge effects. ...
...Markets actually work because they're adaptive. Bad things get killed, good new things sometimes get promoted. But most of the time what you'll find in business is no one has the faintest idea of why the things that work actually work. What's very useful here is that finally a group of academics with money, time, and immensely high intelligence were finally sitting down to codify and make sense of things, which we'd been aware of for years but which, to our shame, we'd never attempted to actually try and systematize.
RORY SUTHERLAND is Executive Creative Director and Vice-Chairman, OgilvyOne London; Vice-Chairman, Ogilvy & Mather UK; Columnist, The Spectator. Rory Sutherland's Edge Bio page
THIS THING FOR WHICH WE HAVE NO NAME
The strange thing about academics, which always fascinates me, is that they believe they're completely immune to status considerations and consider themselves to be more or less monks. In reality, of course, academics are the most status-conscious people in the world. Take away a parking space from an academic and see how long he stays. I always find this very strange when you occasionally get in the realm of happiness research, you get fairly considerable assaults on consumerism as if it's just mindless status seeking. Now, the point of the matter is, is that academics are just as guilty of the original crime, they just pursue status in a different way. ...
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I have probably stolen, without realizing it, your own job title of "impresario" rather unfairly. The reason I did this was that occasionally people started writing about me online as a "behavioral economist" and I realized that, among academic behavioral economists, this would drive them practically apoplectic to have someone with no qualifications in the field so described. (I'm a classicist by background in any case). So my being described as a behavioral economist would make them practically deranged.
