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#830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment
Episode 830
Richard H. Thaler is the 2017 recipient of the Nobel Memorial Prize in Economic Sciences for his contributions to behavioral economics and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. He is the New York Times bestselling co-author of Nudge: Improving Decisions About Health, Wealth, and Happiness and the author of Misbehaving: The Making of Behavioral Economics. His new book is The Winner's Curse: Behavioral Economics Anomalies, Then and Now.
My co-host for this conversation is Nick Kokonas. Nick is an entrepreneur, investor, and author best known as the co-founder of The Alinea Group (sold in 2024) and the reservation platform Tock, which is now owned by American Express.
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Timestamps:
[00:00:00] Start.
[00:02:33] First principles: What is economics, really?
[00:04:18] The “max” assumption and agents as optimizers.
[00:06:41] Rationality in models: Solving problems like an economist would.
[00:07:29] “Meh” vs “Max” — shortcuts instead of optimization.
[00:08:06] Selfishness, fairness, and self-control in economic models.
[00:10:08] Milton Friedman’s “as if” defense.
[00:12:36] The cashew nuts story: Origin of behavioral economics.
[00:14:02] Removing choice and status quo bias.
[00:17:31] The case for Americans needing forced savings.
[00:19:34] Academic resistance: Psychologists laughing at economic theory.
[00:24:37] Loss aversion: Disease cure experiment.
[00:27:04] Endowment effect: Coffee mug experiment.
[00:29:45] Restaurant reservations and the power of deposits.
[00:31:05] Fairness research: Snow shovels and blizzards.
[00:32:50] Uber surge pricing and the 9/11 thought experiment.
[00:34:37] Behavioral economics in one sentence.
[00:35:00] Nudges: 401(k) auto-enrollment case study.
[00:37:46] The fly in the urinal and nudge durability.
Published on 2 months ago