The power of behavioral science for emerging economies: MIT explores Cuba and Trinidad & Tobago

The power of behavioral science for emerging economies: MIT explores Cuba and Trinidad & Tobago
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Both social scientists and policy makers have long puzzled over a basic question: Why do humans so often refuse to act in their own best interests? This ranges from behavior as simple as snacking on chips when we all know fruit is healthier to spending money on extravagant luxuries when we should be saving for retirement.

The answer is that our choices are shaped by both non-conscious processes and the social influences that shape our behavior. "Behavioral science" seeks to unpack these influences and can discover ways to encourage good economic decisions, healthy lifestyles and other beneficial habits. So I, as a behavioral scientist, was heartened to see the Obama administration issue an executive order in September 2015 calling for incorporating behavioral insights into federal policies and programs.

Behavioral science is kind of "cool" right now (cool, for academia anyway). There has been a great deal of mainstream attention paid to behavioral science recently, notably in books like Freakonomics and Predictably- Irrational to columns like New York Magazine's The Science of Us, and television shows like National Geographic's "Brain Games," and various Ted Talks. There's also increased attention on how behavioral science can move beyond the laboratory, with its interesting, quirky cool studies, to really be used as a tool to help shape behavior and policy. Thus, Obama's creation of a behavioral science team within the White House could really give a boost to cross pollination between academics and policymakers that could result in public policy that would encourage healthier, more fulfilling lives. This could range from encouraging people to enroll in thrift plans, pay fines that hang over their heads, eat low-fat diets, or get out to vote.

Unfortunately, there has been a chasm between the kinds of tools that we use in academia and the policies needed in the real world. Most people outside of academia do not read the arcane articles in academic journals. But we have some great and interesting ideas percolating in campus "laboratories" that we need to share with budget-strapped policymakers dealing with real-world issues.

This is why the we at the MIT Sloan School have organized an unusual class this spring that will examine behavior in two widely divergent economics - that of Trinidad & Tobago and Cuba. Both countries share an Equatorial location, a colonial past, environmental attributes, and ethnic diversity. However, Cuba, with its Communist economy, provides an excellent counterpoint to one of the Caribbean's wealthiest countries, Trinidad, with its (non-tourist) capitalist economy. Through "A Tale of Two Countries: Applying Behavioral Science to Emerging Economies in Cuba and Trinidad," 28 MIT Sloan students will study the history and development of Cuba and Trinidad &Tobago, identifying areas of economic and environmental needs to develop and propose actionable solutions. We will meet with government representatives of the two countries and a member of the Obama's administration behavioral science team. The class will culminate in a 10-day trip to the region in which students will meet with local officials and perform field research.

The class is an opportunity to examine how emerging economies may benefit from the behavioral science lens. For example, students will examine Trinidad's lack of local agricultural infrastructure. Why do people in Trinidad live in an amazing warm climate yet eat blueberries and raspberries imported from California? Agriculture is a shockingly minute portion of the economy. As a result, the population pays a high price for its imported fruits and vegetables, with implications for both health and disposable income. We will explore whether there is a cognitive bias affecting the agriculture industry, and how this might be affected by sociological aspects of Trinidad and Tobago. Could farming thus be "rebranded" as a desirable path?

Students will also look at how Trinidad, enriched by its oil production, can also embrace renewable energy sources. Oil has been good to Trinidad and Tobago in many ways, but it is not an infinite resource. How can behavioral science be employed to encourage the use of sustainable energy without the population perceiving a loss?

Cuba presents other challenges; the island nation provides fascinating opportunities to employ behavioral science as it opens up trade with the United States. Cuba currently supports populations of birds, a kind of crocodile, and insects found nowhere else. But increased development might threaten these creatures, which could be lost forever. Students will look at whether marketing and branding efforts can be used to help underscore the value of protecting these rare species in the face of rapid economic expansion.

By contrast, the Caribbean also has a problem with an abundance of an invasive species, the lionfish. This unchallenged predator threatens to devastate native marine life. We will discuss how framing could result in the lionfish being re-branded or positioned as a delicacy that would encourage local fishermen to create a local market that is profitable and controls its population.

The class will generate ideas and solutions and share them with stakeholders. But most importantly, we will have the rare opportunity to listen and learn how the behavioral concepts that we test in the laboratory may or may not be applicable to real-world problems. We're realistic that changes won't be made immediately and it may take time for the ideas to spread. That's OK. This is first step we've made of this kind as we strive to fulfill MIT Sloan's challenge to leaders: "In the world, for the world."

Renée Richardson Gosline is the Zenon Zannetos 1955 Career Development Assistant Professor of Marketing in the Management Science group at the MIT Sloan School of Management. She has been named one of the "World's Top 40 Professors under 40," and an MIT "Iron Professor."

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