Paying Tribute to Gary Becker's Scholarship

Published on November 05, 2014

Persuasion is a type of pressure and people generally don’t like to be pressured, Booth professor Kevin Murphy told colleagues and students in a lecture at the October program celebrating the life and work of Nobel laureate Gary Becker. Murphy collaborated with Becker on unpublished research involving persuasion and indoctrination.

The first type of persuasion that normally comes to mind is advertising, said Murphy, George Stigler Distinguished Service Professor of Economics. But persuasion can be used to promote ideas or to indoctrinate people into certain patterns or behaviors. Parents and families use many forms of persuasion to get children to behave in certain ways, he observed.

On Oct. 30 and 31, hundreds of colleagues, students, and admirers gathered to honor Becker, AM ’53, PhD ’55, University Professor of Economics and Sociology at the University of Chicago, who died on May 3.

Becker pioneered study in the fields of human capital, economics of the family, and the economic analysis of crime, discrimination, addiction, and the relationship between law and economics. He won the Nobel Memorial Price in Economic Sciences in 1992 for having extended microeconomic analysis to a wide range of human behavior.

The tribute was organized by Murphy, along with Nobel laureate James Heckman, Henry Schultz Distinguished Service Professor of Economics at the University of Chicago, and Edward P. Lazear of the Stanford University Graduate School of Business.

Fifteen world-renowned academics participated in the program, which included lectures such as Market and Nonmarket Benefits of Human Capital and panel discussions such as The Economics of Crime and the Law.

The program ended with a memorial at Rockefeller Chapel, where University of Chicago president Robert J. Zimmer recalled economist Milton Friedman’s praise for Becker as “the greatest social scientist who has lived and worked in the last half-century.”

Murphy explained that his collaboration with Becker spanned a period of years.

“We laid it down, and picked up, and laid it down,” he said. “I am trying to figure out how I am going to put the paper together, which is so much harder to do alone,” Murphy said. “Gary could always push the ball forward.”

Murphy proceeded to lay out the research that the duo had completed on the potentially titled paper “The Economics of Persuasion and Indoctrination.” He began his explanation by clarifying that unlike some other economists, Becker believed and demonstrated that rational people care about all kinds of things and are subject to a variety of pressures because they care about issues beyond just financial wealth and material wants. So those who wish to change our behaviors, our habits or our buying patterns should use these interests, likes, and dislikes to persuade us.

Persuasion is part of the way any social group works, from governments and their citizens and teachers and students to businesses and their clients. “What you have to keep in mind is that persuasion can work beyond the individual and the company,” Murphy explained.

Although people generally don’t like to be pressured to change their choices they may only modestly resist some forms of persuasion. When people are close to the margin, when they can’t decide which way to go on an issue or a decision, then persuasion often is easily accepted and may even be desired. After all, much advertising and marketing can help to define a good or service and offer additional information.

The key point of the research is that the ability to persuade, commonly taken to be evidence against the rational economic model, is actually an implication of the rational model, Murphy said. It should be relatively easy to “nudge” consumers to buy a little more though they will require some compensation for that. As a result, those that want the right to influence behavior will often have to pay in some way for that right, he added. Those payments show up as covering the costs of stories to put in the newspaper or shows to put on TV in order to induce people to subject them to persuasion. But the cost could come in other forms, such as a backlash if companies push their agenda too hard and try to persuade people who are not leaning in that direction.—Robin Mordfin