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Richard Thaler, Nobel Prize-Related Economics Award Winner, has also Advocated in Favor of Open Data Access

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Top 10 Tech Trends for 2010, May 19, 2010 | © Courtesy of Steve Jurvetson.

While upon his 2017 prize nomination, Richard H. Thaler has received recognition for his contributions to behavioral economics, he has also argued that open data initiatives can bring public and private benefits alike.

A Blog Article by Pablo Markin.

On October 9, 2017, the University of Chicago Booth School of Business has announced that Richard H. Thaler, its Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics, has received the vaunted 2017 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. This award has celebrated Thaler’s work in behavioral economics that takes account of the non-rationality of economic agents, due to human biases. While his economic behavior scenarios have served as the foundation for his book-scale publications, such as Nudge: Improving Decisions About Health, Wealth and Happiness (2008; co-authored with Cass R. Sunstein) and Misbehaving: The Making of Behavioral Economics (2015), in his smaller-scale publications Thaler has also advocated that Open Access to governmental, organizational and user data can be of significant utility for individual and collective decision-makers, precisely because more often than not economic agents act counterintuitively.

In other words, the ability of public policies to arrive at optimal decisions and realize cost efficiencies is likely to critically depend on the availability in Open Access of behavioral data based on which incentives can be devised and fine-tuned. Thus, in his article that has appeared in The New York Times on March 12, 2011, Thaler has called on governments to allow for Open Access to the data that their various agencies collect so that private companies and individual consumers would be able to tap into that information to deliver optimized services, such as real-time traffic tracking solutions, and make smarter decisions, e.g., based on service provider price registries, respectively. These uses of open data can also contribute to higher levels of consumer market competition and product safety transparency with public and private benefits in the form of improved resource allocation efficiency and reduced damage and mortality rates due to accidents.

For this reason, Thaler’s argument has strengthened the case for the implementation of open data policies, since they can have wide-ranging positive effect as instruments for recording behavioral biases and creating counter-acting incentives. Since, as Amitai Etzioni has argued in his 2010 article, the beneficial effect of data transparency is likely to significantly depend on data utility and information costs, it appears that information necessary for complex individual and collective choices needs to be available in Open Access, to enable data-based feedback to consumer behavior, human errors and aggregate outcomes that can be used for intelligently structuring incentive structures to which agents are likely to respond by changing their behavior in beneficial ways, as Thaler, Cass R. Sunstein and John P. Balz have pointed out in 2014.

As Luisa Blanco-Raynal, Jeffrey DeSimone and Zijun Wang, the editors of Open Economics, have highlighted in Konrad Sarzyński’s blog post, Thaler’s research not only demonstrates the importance of economic theories for policy making, but also underscores the wider beneficial effects that open data can bring about.

By Pablo Markin

Featured Image Credits: Top 10 Tech Trends for 2010, May 19, 2010 | © Courtesy of Steve Jurvetson.

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