Last year, the Prime Minister launched a behavioural economics or “Nudge” unit in his Department (see my post from last November), following similar initiatives in the US and UK. The Government is looking at how it can use the insights of behavioural economics to improve public policy. One of the most well-known applications of behavioural economics is to prompt people to pay their taxes on time, by advising them that most of their fellow citizens do so.

Queensland is fortunate to have world-leading experts on behavioural economics at QUT in the Queensland Behavioural Economics group, known as QuBE. The group’s Research Director Professor Lionel Page was recently awarded the 2016 Young Economist Award by the Economic Society of Australia. The Queensland branch of the Society, of which I am the Secretary, is fortunate that Professor Page has agreed to present a lunchtime seminar to the Society on Friday 16 September at Morgans at the Riverside Centre in Brisbane CBD:

Optimally Irrational: An Insight into Behavioural Economics

The Economic Society of Australia (Qld) invites you to a luncheon address by Prof. Lionel Page.

Behavioural economists have gathered a large amount of evidence undermining the model of the cold (often selfish) rational economic man (Homo Economicus). From this accumulated evidence it appears that people often make mistakes: they have inconsistent preferences; they fail to commit to their plans; they are influenced by their emotions.

A deeper understanding of decision making processes shows that in many cases “irrational behaviours” have good reasons to exist. In many ways the old standard model of Homo Economicus is not the optimal solution to the complex world the Homo Sapiens evolved to live in. Many of the seemingly “irrational” deviations are better adaptations to the real world than what was considered the “rational” standard of behaviour in simplified models considered by economists.

The insights arising from behavioural science is that people are very good at using their limited cognitive resources to making decisions in a highly complex environment.

This presentation will review a few of these situations and show why, in many ways, our “defaults” make us smarter than we think.

This should be a very interesting seminar, and I expect some lively discussion given that behavioural economics is a relatively new and still somewhat controversial field, so please consider attending.

Professor Lionel Page of QuBE