#830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate - Realistic Economics, Avoiding The Winner's Curse, Using Temptation Bundling, and Going Against the Establishment
Tim Ferriss, Richard H. Thaler, and Nick Kokonas discuss how traditional economics models people as perfectly rational, selfish agents and why that vision breaks down when confronted with real human behavior. Thaler traces the origins of behavioral economics through stories and experiments on loss aversion, fairness, mental accounting, and self-control, showing how these insights improve predictions and policy in areas like retirement savings, pricing, and investing. They also explore the winner's curse in auctions and sports drafts, the power of nudges and temptation bundling, and Thaler's collaborations with Daniel Kahneman and Amos Tversky, including a candid conversation about Kahneman's decision to end his life through assisted dying.