Richard Thaler, a Nobel laureate and professor at the University of Chicago, has made significant contributions to the understanding of human decision-making. He is considered a pioneer in the field of behavioral economics. Recently, Thaler has turned his attention to the process the Democratic Party uses to select its presidential nominee. He views the 2028 election as particularly significant.
David Leonhardt, an editorial director at Times Opinion, engaged Thaler in a discussion about decision-making mistakes commonly made by organizations, especially in hiring processes. Thaler highlighted the challenges involved in making reliable predictions about job performance and explained why hiring decisions become more complex at higher organizational levels.
The most reliable predictions about someone’s job performance often derive from actual tests related to the job. For instance, when hiring a chef, a cooking test can provide clear insights. However, gauging a chef’s ability to manage a team in a large restaurant is much more complicated, as no test directly assesses that skill.
Thaler explained that in the absence of direct job performance indicators, many organizations default to interviews. However, he noted that unstructured interviews often offer little useful information regarding future job performance.
He provided an example from sports, illustrating the difficulties in selecting effective leaders. In the past year, the National Football League saw a high turnover rate among head coaches, with nine out of 32 teams firing their coaches, and a tenth coach resigning. Despite stringent selection processes and the existence of track records, the turnover exceeded 30% in just one year.
According to Thaler, selecting a presidential candidate is a high-stakes decision, as the role combines the responsibility of executing the world’s toughest job and competing in a popularity contest by 2028. Many candidates lack experience in national elections or in the full range of presidential responsibilities. As a result, creating a suitable test for candidate selection is challenging.
Nonetheless, Thaler believes there are ways to meaningfully improve the candidate selection process, given its crucial importance.
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