Richard Thaler on Hiring Mistakes and Presidential Selection

Richard Thaler, a Nobel laureate in economics and a professor at the University of Chicago, has significantly influenced the understanding of human decision-making. His work in behavioral economics has highlighted the complexities of choosing leaders, particularly regarding the Democratic Party’s process for selecting its presidential nominee. He spoke with David Leonhardt, an editorial director in Times Opinion, to discuss these challenges.

Common Hiring Mistakes

Thaler’s research reveals that organizations often struggle with hiring decisions, especially as positions require higher responsibility. He notes that reliable job performance predictions usually come from tasks that simulate the job’s requirements. For instance, while testing a chef’s cooking skills is straightforward, evaluating her ability to manage a large restaurant team is more complex.

Many employers rely on unstructured interviews, which Thaler points out rarely provide useful insights into future job performance. This is evidenced by sports organizations. For example, last year the National Football League (NFL) saw a turnover rate of over 30% among its head coaches. Despite thorough selection processes and established track records, the hiring results often fell short.

Selecting a Presidential Candidate

The Democratic Party faces a critical task in choosing a presidential candidate who must navigate the world’s most challenging job and triumph in the 2028 elections. The selection process is complicated by the fact that many candidates have little experience in national elections or the wide-ranging duties of a president, making practical testing difficult.

Thaler suggests refining the selection process to better meet these challenges, as the stakes are extraordinarily high. Improving this process means finding ways to better predict a candidate’s ability to succeed in office and win the election.