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Decision Research at Chicago GSB

Richard Thaler

Richard H. Thaler
Ralph and Dorothy Keller Distinguished Service Professor of Behavioral Science and Economics and Director of the Center for Decision Research.

 


The Center for Decision Research at Chicago GSB is devoted to the study of how individuals come to think and make decisions about their world. In particular, we investigate the power of intuition, reasoning, and social interaction to shape beliefs, judgments, and choices in all domains of life, from personal to work to policy. Using a variety of rigorous scientific methods to get at these issues, we aim to produce knowledge that can improve judgment and decision making in a range of contexts, including management, marketing, finance, and public policy.

As the oldest academic center in the world devoted to decision research, the Center for Decision Research has made significant progress in advancing decision science. Building on this foundation, our newest streams of research have yielded numerous insights, a few of which we highlight in this issue of Capital Ideas.

In the first article, “Know What I’m Thinking?” Nicholas Epley and coauthor Tal Eyal show how changing the views that people have about themselves can allow them to better predict the view that others will have of them. The researchers show that each person’s default concept of themselves is so colored by their own experiences that it gets in the way of accurately understanding the less-informed, more distant views others have of us.

In the second article, “A Room with a Viewpoint,” Noah Goldstein and coauthors Robert B. Cialdini and Vladas Griskevicius use a field experiment to illustrate the power of social norms to influence environmentally conscious behavior. By changing the wording on placards in hotel bathrooms regarding towel reuse, the researchers demonstrated that hotel guests are more likely to reuse their towels when presented with information suggesting that other hotel guests do so than when presented with standard messages about environmental conservation.

The third article, “More Pie, Please,” by George Wu and coauthor Richard Larrick, finds that most people don’t bargain as well as they think they do. The give-and-take of negotiating generally leads both parties to believe they get more value out of their opponent than they actually do. The reason? Each side misjudges the other’s bottom line. They recommend that negotiators more seriously consider the risks of underestimating the value opponents might be willing to offer, and make more ambitious first offers. In the fourth article, “One Bird, One Stone,” research by Ayelet Fishbach and coauthors Arie Kruglanski and Ying Zhang shows that people don’t always want to “kill two birds with one stone.” Their experiments found that when people have just one goal in mind, we tend to prefer a means tailored to that goal alone, rather than one that is associated with multiple, distinct goals.

The final article in this issue presents highlights from my new book, Nudge: Improving Decisions About Health, Wealth, and Happiness, coauthored by University of Chicago Law School professor Cass Sunstein. In this summary we discuss how subtle features of everyday situations can enhance our lives. These features can be readily and powerfully used to promote greater well-being by people whom we call “choice architects”—those who shape the situations in which people encounter choices, from literal architects to HR managers who design retirement plan options.

The Center for Decision Research has already begun to extend the lines of research featured here, and to move forward on several others investigating human judgment and decision-making tendencies. In addition, with the generous support of the GSB and a $2.2 million grant from the John Templeton Foundation, our researchers are able to devote particular attention to understanding those tendencies in human nature that can constrain or enhance our potential to achieve success and happiness. With these ongoing efforts, we hope to help managers, policymakers, and others to better understand human experiences, and to make the human experience better.