The id and the nudge: where Freud meets behavioural economics

Briana S Last, a doctoral candidate in clinical psychology at the University of Pennsylvania in this aeon article:

We are not perfectly rational. This is obvious to anyone who has eaten more than their fill, exchanged harsh words with a friend, or taken the wrong turn on their morning commute. Less obvious, though, are the ways in which our thoughts, feelings and choices are systematically biased. Behavioural economics, a field that bridges insights from social psychology, cognitive science and economics, emerged in recent decades to explain the constraints on human rationality – uncovering a still-growing list of biases and heuristics, or mental shortcuts. Behavioural economists have also harnessed research findings to improve judgment and decision-making through simple interventions (often called ‘nudges’).

Though the field’s discoveries are genuinely novel, its intellectual influences run deep. Its founders drew inspiration from the 20th century’s most famous theorist on the irrational unconscious: the founder of psychoanalysis, Sigmund Freud. The notable convergences between Freud’s ideas and behavioural economics are a testament to the durability of theories that divide thinking into two processes. Their divergences point to the distinct historical and political moments in which these psychological paradigms surfaced. Freud and behavioural economists have picked up on something distinct, maybe even intrinsic, about the way we think – but they have done so with very different emphases and to describe disparate realities.


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