The Frontal Cortex

Obama and Behavioral Economics

Noam Scheiber has an article in TNR touting Obama’s connections to behavioral economics. The article isn’t particularly persuasive, since the only examples Scheiber can muster are Obama’s 401(k) savings plan and his embrace of automatic tax returns. Neither plan is unique to Obama, and only the 401 (k) savings plan is really rooted in the findings of behavioral economics.

Nevertheless, it’s interesting to see the fruits of psychological science enter the arena of public policy. One of the advantages of interdisciplinary fields like behavioral economics (or neuroeconomics, for that matter) is that they are vehicles for translating basic neuroscience into more practical paradigms. Neuroscientists know, for instance, that the impulsive emotions generated by “limbic brain areas” tend to make us hyperbolic discounters. But it takes a behavioral economist (like Richard Thaler) to devise a savings plan that takes this irrational tic into account.