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Q&A with Professor George Loewenstein

Professor Loewenstein speaks about his life, academic work and also his advice for graduating students
by George Wigmore (Senior Communications Officer)

One of the founders of the field of behavioural economics, Professor George Loewenstein is an outstanding academic amongst his peers having made a major contribution with his prolific research focusing on the application of psychology to economics.

Receiving his honorary doctorate award from City University London, City News spoke to Professor Loewenstein about his life, academic work and also his advice for graduating students.

CN: Where did you grow up and what did you want to be as a child?

GL: I grew up in Lincoln, a suburb of Boston Massachusetts along the route of Paul Revere’s ride, a well-known American poem. I was obsessed with Lego, which was very different when I was young; mostly just blocks; I think I wanted to become a civil engineer and design and build bridges.

CN: What first attracted you to economics and psychology in the first place, and as one of the founders of the field, how did you first get interested in behavioural economics and neuroeconomics?

GL: When I graduated, with a degree in economics, I realised belatedly that what really interested me was psychology. Given that I had majored in economics and not psychology, I applied to economics PhD programs after taking a few years off to live in NY and work in a hospital, and when I got into one of the programs I applied to at Yale, I visited to ask if I could take psychology classes in addition to economics classes. I was incredibly lucky that the year I started graduate school was the year the paper by Richard Thaler that I think really started behavioural economics got published. I came across it and that got me interested in the field.

CN: What can behavioural economics tell us about our lives?

GL: That’s a big question. Perhaps the main thing is that our decisions, including our most important decisions with most lasting consequences are subject to many unjustifiable influences, such as immediate emotions that have nothing to do with a decision at hand, framing effects (how a decision is presented to us), loss aversion (our disproportionate aversion to losses relative to our attraction to gains), overweighting of (though in other cases completely ignoring) small probabilities.

We are in many cases, our own worst enemy. Ideally, knowing about this can help us to make better, more informed, decisions, in some cases - such as when we expect to be inebriated or in elevated emotional states - lead us to commit to future course of action, or to delegate decisions to people who are in a better position than we are to make them. Behavioural economics certainly challenges the idea, dominant in traditional economics, that people can be relied upon to do what’s best for themselves.

CN: How has behavioural economics changed since you started working in the field?

GL: When I started doing behavioural economics in the 1980s most economists didn’t accept it as a subfield of economics at all. For at least a decade, it was just a daily struggle to gain acceptance from the profession. At this point BE has taken off to the point where all the top economics departments have behavioural economists, many Nobel prizes have gone to people who are currently doing behavioural economics, Behavioural Economists are publishing best-selling books, the newspapers are full of it, governments around the world are starting Behavioral Insights teams.

Back in the 1980s I couldn’t possibly have imagined such an outcome. I think behavioural economics has thrived due to its incredible openness – to different methodologies, inputs from other disciplines and applications.

CN: What advice would you give to anyone graduating? Also, if you could, is there any advice you would give to your younger self when you graduated?

GL: I wish someone had told me at the beginning of my career that everything was going to turn out fine. Of course no one could have told me, because no one knew, and people probably did tell me, but I didn’t believe them. But, it pains me to think of all the unnecessary anguish I went through being uncertain, and even doubtful, about how things would turn out. Some insecurity is probably motivating, but too much is counterproductive. So, I would say “don’t sweat it; it’s not worth it.” Brave men die once, cowards a thousand times. Be brave.

My advice for young researchers at the start of their career is to work on topics you feel passionate about. Intrinsic motivation is infinitely more compelling than extrinsic motivation. The only (or at least best) way to put in the hours necessary to be a successful academic is to do research you are so excited about that, instead of forcing yourself to do it - you need to exercise self-control to get yourself to take a break.

The second piece of advice applies equally well to non-academics. I would also tell prospective academics to look for unpopulated areas of research and to assume that there are lots and lots of them. Every generation thinks that the prior generation asked all the interesting, important, questions, and the people who thrive are those who recognize that there are lots of cool topics left to be studied, who figure out what those topics are, and who work on them. I suspect, again, that a similar principle applies outside of academia. There are still an infinity of cool ideas, products (if you are an entrepreneur), plots (if you are a novelist or playwrite), etc. waiting to be discovered.

CN: What do you feel is your biggest achievement?

GL: Raising two children, staying married for 30 years, mentoring lots of graduate students, persisting with research despite the misery of never-ending rejections. Academic publishing is glacial. I probably get five papers rejected for every one that gets published, so it feels as if I’m not making any progress. But, like the movement of a glacier, small bits of progress accumulate, and if I look at the end of a year, I can generally see that I did manage to get my work out. More often than I would prefer to admit, I look at my CV to reassure myself that I have been, and continue to be, productive.

My major aspiration in life, which I have no confidence that I will achieve, is to produce something of beauty. When I go to plays, to art exhibitions, or read novels, I think how wonderful it would be to produce something of beauty, and I’ve been trying to imagine how that might be possible as an academic.

CN: What do you enjoy doing in your spare time?

GL: I’m very into outdoor activities: mountaineering, whitewater boating, sailing, sea kayaking, canyoneering, mountain biking. I also love reading novels, and now I’ve become addicted to the new kind of TV series – like The Wire.

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