The Maddest Men of All: A New Freakonomics Radio Podcast
Our previous Freakonomics Radio episode, “Hacking the World Bank” , discussed how Jim Yong Kim, president of the World Bank, is using insights from behavioral economics to fight poverty. Kim acknowledged that nonprofits like the World Bank are playing catch-up:
KIM: If you were to go to Ogilvy or any of the big public-relations companies and give them this new World Bank report on behavioralism , I think they would laugh at us in the sense that they would have been utilizing these insights very aggressively for a very long time.
This week, we explore how Ogilvy & Mather, the global marketing and advertising giant, is pushing the limits of how behavioral insights can be applied in the real world. The episode is called “The Maddest Men of All.”
You can subscribe at iTunes, listen elsewhere, get the RSS feed, or read the full transcript .
The star of the episode is Rory Sutherland, vice chairman of Ogilvy & Mather in the U.K. and founder of #ogilvychange, an O&M offshoot that brings behavioral research to both corporations and nonprofits.
In the episode, Sutherland explains what behavioral economics gets right that classical economics often misses. You’ll also hear “choice architects” teach call-center employees how behavioral techniques can reduce customer churn, and how advertisers apply principles like loss aversion and social norming — sometimes for good, sometimes less so.
SUTHERLAND: Let’s take an example where you go to an airline website and it quotes you a price and says only four seats left at that price. I know it’s exploiting scarcity bias, but it still works on me. Implicitly, you assume subsequent seats will be more expensive — but that’s not actually what they’ve promised.
The episode also features a conversation with Michael Housman, chief analytics officer at Cornerstone OnDemand. Housman discusses insights from the growing field of workforce science, including:
- How employee honesty correlates with performance
- Why salary may be a weaker motivator than commonly believed
- What your web browser choice may reveal about competence
- How strongly managers influence employee outcomes
Housman also addresses the ethical limits of data collection and the importance of avoiding the “creepy” line:
HOUSMAN: There are legal limits — race, sex, age — and there are things we simply choose not to touch. We’re not scouring Facebook profiles or Twitter feeds. We take a conservative approach to what data we use.
Having learned a few things from both Sutherland and Housman, we’ll leave you with this message: you wouldn’t want to miss out on this — or any future — Freakonomics Radio episodes. Many people like you already subscribe, and best of all, it’s free.
To access the full-length podcast, click here .