Professor Dilip Soman helps organizations make evidence-based decisions. PHOTO COURTESY OF JAMES KACHAN | IMAGE HAS BEEN CROPPED

Most people say that the elevation of Mount Everest is 29,000 feet, forgetting the final 29 feet. During the last 29 feet is when the bad things occur — people fall prey to physical exhaustion, give up mentally, and get caught. People often put in a lot less effort at the end compared to the hard work and preparation that has led them to these last steps.

Similarly, most companies spend much of their effort on at the beginning, from the product design, brand strategy, and optimization of the production process in the hopes of putting out the best product on the shelves. Companies often forget about the final step, where customers enter the store and talk to a salesperson or click a website, to make the choice of whether to purchase the product.

This irrational shortcoming of human behaviour is what caught Professor Dilip Soman’s attention.

In 1992, Soman began his PhD program at the University of Chicago where he focused on marketing and management. However, he was drawn to the implications of consumer behaviour on the market and decided to delve into the field of behavioural economics: the study of how cognitive and emotional factors affect the decision-making processes of individuals and institutions.

Twenty-seven years later, Soman is the Director of the Behavioural Economics in the Action Research Centre at Rotman (BEAR) and serves as a Senior Policy Advisor on the Impact and Innovation Unit for the Government of Canada, while fulfilling his teaching duties at the Rotman School of Management.

“So much [of behavioural economics] I think is interesting because it says that there’s a deviation between what people want to do and what they end up doing,” Soman told The Varsity.

Now, Soman holds the Canada Research Chair in Behavioural Science and Economics. The Canada Research Chairs Program aims to help chairholders launch Canada into the forefront of research and development.

Making choices easier

The presentation of choices to individuals and consumers can impact their decision-making. Different designs can either facilitate action or impede it. “As a behavioral scientist, my contribution is that I can help consumers — you must see that and I can help organizations see that,” said Soman.

He went on to explain that, “People are impulsive, people don’t think too much about the future. They’re emotional. Anything in the context that exaggerates those tendencies tends to make people deviate from what they should do.”

Small and seemingly irrelevant details that make a task more challenging often make the difference between doing something and putting it off. Opting out of email subscription lists appears to be a menial task that will declutter our inboxes and make our lives a little bit easier, but because it is so complicated and inconvenient many people stay subscribed to email lists.

It is easy to see this tendency for people to deviate from what they intend to do becoming a lot more problematic — think retirement saving options and health care plans. When choices are confusing and require more effort to understand, people tend to stick with the default, even if it does not benefit them much, or at all.

Soman’s work consists of developing tools to help government officials and businesses create architecture that guides individuals to make choices that are in their best interests. It has a heavy focus on bridging the gap between the ideas of behavioural economics and how to practically implement those ideas in a real-world setting.

Soman’s work at the BEAR is a prime example of his contributions toward converting academic ideas in behavioural science to implementation-oriented framework.

“Our biggest work is in scaling what we know in the lab to the marketplace… with the goal of shifting the research agenda in behavioural science from the big ideas to where can we use it and how,” said Soman.

On being a Canada Research Chair

The Varsity asked Soman what it means for him to be named the Canada Research Chair in Behavioural Science and Economics, a prestigious title awarded to Canada’s most outstanding scholars.

Rather than reflecting upon his personal achievements, Soman viewed his appointment as a larger recognition of the field of behavioural economics.

“I think it’s more a recognition for the field… [that] this is the first candidate chair at the intersection of Behavioral Science and Economics,” said Soman.

Whereas the government has worked with an economic assumption of citizens’ decision-making when drafting policy, Soman believes that his appointment as the first Canada Research Chair in the field of behavioural economics marks a changing attitude towards the idea that people are not always rational actors.

“That’s a big acknowledgement for the fact that the field is now not only considered legitimate, but that it can impact society,” said Soman. “I think once there’s a Canada Research Chair in behavioural economics… all [of the] ideas of our team are now much more easily received.”

On what’s next

Soman wants to do more than understand the existing friction organizations have in place that prevents individuals from making good decisions — he wants to reduce it by applying the tools of behavioural economics to the complex problems of the real-world.

His main priorities for the upcoming years include converting academic findings into accessible information that businesses and individuals can digest; incorporating the ideas of behavioural economics toward a preventative health system; and improving the financial literacy of average citizens by using smart choice architecture to help people make better economic decisions.

Despite being an expert in understanding human imperfections in decision-making, Soman is the first to admit his shortcomings. He is currently working on his latest book, About Time, but when The Varsity inquired about the book, Soman confessed that he hasn’t had the time to work on it yet.

“I mean, one of the reasons I studied this stuff I’m doing is I’m pretty bad myself,” joked Soman. “I procrastinate.”

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