Sendhil MullainathanOpen Access

Sendhil Mullainathan

at University of Chicago, Booth School of Business

Most famous for his book Scarcity on how being poor hinders cognitive ability. He also researched discrimination in hiring and is co-founder of Ideas 42, a non-profit that uses behavioral science to solve social issues.

Sendhil Mullainathan’s [MUH-la-NAY-than’s] findings

The study

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Results

Results

Study graph
np_read_2490885_000000

Sendhil Mullainathan’s [MUH-la-NAY-than’s] findings

• Scarcity impedes unrelated tasks and keeps the poor poor.
Sendhil found that the cognitive ability of sugar cane farmers in India was much lower before their harvest period, when money was tight, than after. When under Scarcity, we're driven to focus on the now, as explained by Present Bias and Delay Discounting.  

Be mindful of the cognitive tax placed on those in a stressed situation, using smart Defaults, shorter, well-chunked forms and reminders to reduce Analysis Paralysis.

“The tug of scarcity can be strong. But understanding its logic can minimize its negative consequences. We can go some way toward “scarcity-proofing” our environment.”

• We're unconsciously racist when hiring
Sendhil did a study on recruitment, where resumes were assigned either a very African American-sounding name or a very White-sounding name. The results showed strong discrimination: white names received 50% more interviews.

Unconscious bias can be reduced by putting systems in place to remove it. New companies, such as Applied are doing just this: removing the candidate’s personal details and allowing the recruiter to focus on the important information.

• Crime can be reduced with behavioral economics
Inspired by Daniel Kahneman's popularized Fast-and-Slow Thinking model, Sendhil co-authored a study on youth crime in Chicago.  It found that promoting reflection on our automatic (System 1) thoughts on risky behaviors by encouraging use of our less spontaneous, more controlled System 2, total arrests dropped by 28-35% and violent crime arrests by 45-50%.

Key Takeaways

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Sendhil Mullainathan

Sendhil Mullainathan

at University of Chicago, Booth School of Business

Most famous for his book Scarcity on how being poor hinders cognitive ability. He also researched discrimination in hiring and is co-founder of Ideas 42, a non-profit that uses behavioral science to solve social issues.

The study

Setup

Nuggademic people academic

Results

study graph
np_read_2490885_000000

In detail

• Scarcity impedes unrelated tasks and keeps the poor poor.
Sendhil found that the cognitive ability of sugar cane farmers in India was much lower before their harvest period, when money was tight, than after. When under Scarcity, we're driven to focus on the now, as explained by Present Bias and Delay Discounting.  

Be mindful of the cognitive tax placed on those in a stressed situation, using smart Defaults, shorter, well-chunked forms and reminders to reduce Analysis Paralysis.

“The tug of scarcity can be strong. But understanding its logic can minimize its negative consequences. We can go some way toward “scarcity-proofing” our environment.”

• We're unconsciously racist when hiring
Sendhil did a study on recruitment, where resumes were assigned either a very African American-sounding name or a very White-sounding name. The results showed strong discrimination: white names received 50% more interviews.

Unconscious bias can be reduced by putting systems in place to remove it. New companies, such as Applied are doing just this: removing the candidate’s personal details and allowing the recruiter to focus on the important information.

• Crime can be reduced with behavioral economics
Inspired by Daniel Kahneman's popularized Fast-and-Slow Thinking model, Sendhil co-authored a study on youth crime in Chicago.  It found that promoting reflection on our automatic (System 1) thoughts on risky behaviors by encouraging use of our less spontaneous, more controlled System 2, total arrests dropped by 28-35% and violent crime arrests by 45-50%.

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Open access, foundational Nuggets

Scarcity

Scarcity

We value things more when they’re in limited supply

Social Proof

Social Proof

We copy the behaviors of others, especially in unfamiliar situations

Prospect Theory

Prospect Theory

A loss hurts more than an equal gain feels good

Reciprocity

Reciprocity

We’re hardwired to return kindness received

Framing

Framing

We make very different decisions based on how a fact is presented

Loss Aversion

Loss Aversion

We feel more negative when losing something than positive when we gain it

Default Effect

Default Effect

We tend to accept the option pre-chosen for us

Anchoring

Anchoring

What we see first affects our judgement of everything thereafter

Fast & Slow Thinking

Fast & Slow Thinking

We make knee-jerk spontaneous decisions that can cause regretful damage

Dynamic Norms

Dynamic Norms

We’re more likely to change if we can see a new behavior developing

Salience

Salience

Our choices are determined by the information we're shown

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Certainty Effect
We crave clarity over chance and make costly sacrifices to get it

Like it or not, we're all hard-wired to seek out information that helps us reduce uncertainty over the future. We'll explore:

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