Policy Punchline

Robert Frank is the H. J. Louis Professor of Management and Economics at Cornell University. His newest book “Under the Influence, Putting Peer Pressure to Work” discusses how social environments profoundly shape our behaviors and how we can unlock the power of social influence – through fascinating ideas from behavioral contagion to consumption taxation. 

 In this interview, Prof. Frank explains the core ideas of his book in detail: how individuals are constantly “under the influence” of others’ behaviors and thus do not always make the most rational decisions; how Adam Smith’s concept of “Invisible Hand” has been greatly misconstrued and overblown by free marketers; why we have a powerful and legitimate public policy interest in encouraging socially beneficial memes and discouraging socially harmful ones… We also discuss Prof. Frank’s progressive consumption tax proposal. It may sound surprising to many, but imposing higher tax rates for the rich might not hurt their purchase power because the prices fo