Judd B. Kessler is an Assistant Professor of Business Economics and Public Policy at The Wharton School, University of Pennsylvania. His research interests cover Experimental Economics, Public Policy and Market Design.
In March, he visited Bocconi University as a part of seminar series co-organised by B.BIAS and BELSS (Bocconi Experimental Lab for Social Sciences) and we had the honour to interview him about his career.
B.BIAS: What would you say first ignited your interest in BE?
Judd Kessler: I first got interested in Economics in high school, where we had a semester of Economics and our teacher made us keep an Economics journal. We were supposed to write about things we saw in the world through the lens of how an economist would think about it. I remember vividly the first time I understood why in a movie theatre popcorn is so expensive. That kind of thinking made me excited about Economics. When I got to undergrad and then graduate school, the thing that drew me to BE was that, in standard Economic Theory, humans are very simple. You can organize how they behave just with mathematical equations. That did not seem realistic to me, particularly in domains that interested me such as charitable giving, organ donation, and volunteering. That made me wonder what drives this behaviour and set me on the path of doing BE.
BB: Could you tell us a little more about your own research interests and the work you’ve done?
JK: I’m interested in what people call pro-social behaviours, basically a personal sacrifice that has a benefit to other people. In particular, I’m interested in understanding how social forces influence pro-social behaviours. For example, when I learn that other people are behaving generously — say I learn that others are donating to charity or taking up jobs that pay less but are good for society — then I’m more likely to do the same. This kind of response really fascinates me.
BB: Which of your research did you enjoy the most and why?
JK: It is a tough question, because I do three kinds of research, three methods really. The first is analysis of pre-existing data. The second is laboratory experiments, which are controlled experiments where you recruit people who know they are in a study. The third is field experiments, which are experiments where you do interventions in the “field” with people who do not know that they are a part of an experiment. They are all fun for different reasons.
One of the projects I’ve done recently is with “Teach for America”, an organization in the US that takes recent college graduates and people who are switching careers and helps them to get into jobs as teachers. We did a study with them, where we randomly added a line to the acceptance letter of people who have been admitted into the two-year program, saying: ” Last year, more than 84% of admitted applicants made the decision to join the corps, and I sincerely hope you join them”. We followed them for two years to see whether they stuck with the program. We were worried that we might get people who didn’t really want to be in the program to say yes and then they would drop out immediately. But that didn’t happen, and it was really cool — we did the experiment, added one small line, and we got to see in the data that the effect persists.
BB: Do you perceive any difference in the importance that BE has gained in the US versus other countries or regions (e.g. Europe)?
JK: I don’t think so, although I’m judging this based mostly on the extent to which academics are publishing BE work and the extent to which governments are using BE insights in their operations and practices. Both Europe and America have seen an increase over time. There are nudge units here in Europe, and also in the US, and there is lots of academic work done in both places. My hope is that it will continue to increase in both places.
BB: Maybe we perceive differences because of the heterogeneity of countries in Europe. For instance, here in Italy we see a few researchers working on BE, but it hasn’t picked up as much speed as in the UK.
JK: There is a lot of heterogeneity in the US as well. There are some universities in the US that have Econ departments that don’t do much behavioural work, so I think that’s probably not unlike Europe, in the sense that there are some places where lots of great behavioural people are and there are some places where it hasn´t come in yet. It could be that in equilibrium some universities don’t do behavioural.
BB: What do you think is the future of the BE?
JK: While lots of the early work focused on questions such as “Do people have this bias?” or “Is it possible for this behavioural phenomenon to arise in practice?”, I think the next set of work that will come out of BE will be more focused on identifying where behavioural biases are particularly relevant in affecting behaviour. Regarding nudges, I think we will start to see models designed to understand why nudges influence behaviour. This should help us understand when nudges will be effective and also when they will increase welfare.
BB: Apart from academic research, what are the career options available in the field of BE?
JK: There are academic-style jobs doing research for think tanks and government organisations. I also think BE is quite useful in consulting jobs. There is a lot BE can say about how consumers are thinking or how firms should operate. Understanding BE can help consultants make better recommendations. Within firms, I think of departments focused on pricing, advertising, or marketing as places where behavioural knowledge could be quite valuable.
BB: Do you think there is a threat of companies abusing this?
JK: Like any tool, BE can be used for good or bad. Think of a nudge. When deciding to implement a nudge, you should worry about its welfare effects — you should only like it if it makes people better off. Once you’re asking those questions, you’re on the right track.
BB: What advice would you give to young students interested in BE? What courses should they take and what experiences should they try to gain?
JK: I would advise them to take both Econ classes — to understand the traditional Econ way of thinking — and psychology classes so that they can see both sides. If you just do behavioural and you don’t know the way psychologists and economists think about it, there’s a gap in understanding. What I ask my graduate students to do, when they are developing new behavioural ideas is to think first about what would happen in a non-behavioural world. How would their intervention affect behaviour in the traditional, rational-agent model? Only then do we move on to how behavioural agents would respond.
BB: How did you feel after being mentioned in the Forbes’ list of under 30s?
JK: It was quite nice actually. No one in my family had done a PhD before and it wasn’t that common a thing among my friends, either. So there was this sense that I was still a student and in school and my friends made fun of me for that, even after I got my first job as a professor. So, it was nice to have some validation that research work could influence policy — and, as a bonus, my friends stopped making fun of me.
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