Richard H. Thaler — The Winner's Curse and Going Against the Established (#830, with Nick Kokonas)
A Tim Ferriss Show conversation with Nobel-winning economist Richard Thaler, founder of behavioral economics, about what economics assumes, why people are not the perfectly rational 'agents' in textbooks, and how this applies to pricing, savings and mental accounting. PARTIAL COVERAGE: the episode runs about 118 minutes and the available caption text is cut off, so this summary covers roughly the first 40 percent, up to the discussion of mental accounting, and not the later topics. Examples and figures are the speakers' own. This is a summary of their views, not financial advice.
Executive Summary (TL;DR)
A Tim Ferriss Show conversation with Nobel-winning economist Richard Thaler, founder of behavioral economics, about what economics assumes, why people are not the perfectly rational 'agents' in textbooks, and how this applies to pricing, savings and mental accounting. PARTIAL COVERAGE: the episode runs about 118 minutes and the available caption text is cut off, so this summary covers roughly the first 40 percent, up to the discussion of mental accounting, and not the later topics. Examples and figures are the speakers' own. This is a summary of their views, not financial advice.
Key Takeaways
Why people sometimes want fewer options
Thaler tells a story of hiding a bowl of cashews at a dinner party, where guests thanked him for removing the choice.