Allison Schrager, Columnist

Behavioral Economics Doesn't Have to Be a Total Loss

Exploiting personal biases to influence people's behavior was always a bad idea. Instead, governments and companies should find better ways to communicate risks.

August 27, 2021 at 6:30 AM EDT

By Allison Schrager

Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of “An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.”

People aren’t always rational when assessing risks.
Photographer: Angela Weiss/AFP

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Behavioral economics is facing a reckoning.

For a few decades, the idea of applying human psychology to economics made a dry subject hip and relatable. Before, the field seemed out of touch, full of abstract models that started with the assumption that people would act rationally based on a universal desire to make widgets and get more stuff.

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