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0:00
Richard Thaler, welcome back to Cornell. Funny seeing you here. And I want to stress the welcome back part for a couple of reasons. I did some research in preparation for this event, and I noticed that your current institution, when they announced your Nobel Prize, helpfully provided some milestones in your career. For example, milestone number one, BA in economics from Case Western Reserve in 1967, milestone number two, PhD from the University of Rochester in 1974.
0:34
Milestone number three joined the faculty at Chicago Booth in 1995.
0:42
No mention of, Cornell at all. At a time that I think may have been instrumental in developing your thinking that ultimately led to the Nobel Prize and such an omission, I think, would, stand out anywhere but in Ithaca, a town that owes its very name to one of the great homecomings in classical literature, it really sort of, sticks there. And not only that, but, Odysseus was, in a sense, the ancient world's greatest choice architect, which, we'll probably talk about, described
1:23
throughout the Iliad as clever Odysseus. He's, most famously known, of course, for arranging his own and his crew's choice context in such a way that he could, enjoy the siren song without his ship crashing against the rocks.
1:41
So because every epic tale of homecoming is ultimately an epic tale of nostalgia, let's start with a nostalgic look back. What was it about, that time and this place that influenced your thinking in ways that ultimately led to the creation of the field of behavioral economics? So the the
2:10
this does feel like a homecoming now, it's not the first one. Yeah. I should, I should let's get on the table that, you've probably,
2:22
many of you have seen a home run hitting contest where some the batters try to hit as many home runs as they can, and there's somebody whose job it is to throw a ball as easy as possible to hit a home run. That's Tom's job. Yeah. Tom and I have known each other since 1978. Yeah. Though you didn't know who I was at the time. I was spending, I don't know, they didn't mention that year in Stanford either. The year before I came here, I spent a year at Stanford, as I often say, stalking my friends
3:09
to be, Kahneman and Tversky. And, in the spring quarter, I took a class that Amos taught that Tom was a student in. We didn't know each other. He knew me as the somewhat older guy who asked a lot of weird questions
3:32
and did so with just this very enviable self-assurance, like, who is that? He's not a another I didn't know I knew all the faculty. You weren't one of them. I was a first year student, and, I thought I knew all the graduate students. I don't think you were one of them. Who is this guy? Asked around. Nobody knew. But you just seemed so comfortable asking questions that seemed unfathomable to a first year graduate student. Yeah. So then when we officially met, was in a dark movie theater,
4:06
somewhere over near Triphammer Mall, I think. And, I, Chariots of Fire. Right? And I was talking to my friend Tom Russell,
4:21
who had just started teaching a class I had started teaching here, and he said, your syllabus has a lot of Kahneman and Tversky in it. And I said, well, I took this seminar from Tversky when I was at Stanford, at which point the guy sitting behind me says, yeah, I was in that class, too.
4:46
And, yeah, that's when we met. So, you know, I think that, that passage from my book gets it right that this was this was a good place for me. It was a it was a time. After that year at Stanford hanging out with Amos and Danny, and, they didn't know any economics. There's a photo of Danny that has Samuelson's principles of economics book in the background. So that was the level. This is a guy who later wins a Nobel Prize in economics, but he's reading the 101 principles book at the time.
5:35
So, I was teaching them economics. They were teaching me psychology. And I had a year to let my mind wander.
5:46
Something I'm good at. And then I was lucky to get a job offer here, and, yeah, the sort of the stars aligned, and some like minded people like you and Bob Frank and others, were around, and, I, I didn't feel, the pressure to do anything specific, which allowed me to dabble,
6:25
in lots of different fields. I wrote a paper in finance and one in marketing and, lots in economics, but. So yeah It was a good time to be here. And, I hear they're having a hockey game this week. I seem to remember going to a lot of hockey games as well. One of the of course, it seems runny to be saying this to you, but one of the signature findings in the field of judgment decision making and behavioral economics is you can ask the same question
6:58
in slightly different ways, and the mind gets channeled, differently. And so it highlights different things. So I want to essentially ask the same question differently, by engaging in a little, counterfactual history.
7:15
Would things have been different or how would they have been different if you hadn't come here right away? You had gone to, let's say, Wharton or Dartmouth's Tuck School or Cornell didn't give you a leave to go that year to Stanford, to spend with Amos and Danny. How would your career have been different? Would the landscape of behavioral economics look a little different? Yeah, I mean, so I wasn't the leave was from the University of Rochester, where I had been an assistant professor.
7:51
And I would say Rochester was probably uniquely ill suited to be a place to do this. And I realized that, that if if I'm going to try to make a living, well, there wasn't a there wasn't a field of behavioral economics, it didn't exist. But, if I was going to try to create such a field, I knew Rochester wasn't the place. And, you know, I thought I'd go south for some better weather and the, the most viable alternative was actually Duke.
8:28
And aside from somewhat better weather, the offer I had from there was in their public policy school, not their business school. And I made a conscious decision. I thought the business school offered more, more different paths. And since I had no idea, it's one thing to have an idea. Oh, let's combine psychology and economics. But it's like when when when Cass and I wrote Nudge, I coined the phrase choice architecture.
9:05
Now that was a meaningless combination of two words.
9:11
But that then made us the world's leading authorities on something that we just made up. It's not like we knew how to do it. We we said, oh, you know, it's like the person who arranges the food in a cafeteria or in a supermarket, but we didn't know what the best way to do that was. We just knew that it would matter. So I had an idea to do behavioral economics, but I didn't know how to do it. Should I run experiments? You know, so initially I was heavily influenced by Amos and Danny.
9:48
I think removing that year, if if I hadn't heard they were going
9:55
or it hadn't worked out, I, you know, I went to Stanford and Victor Fuchs, a very famous health economist, sort of took pity on me and put me on his grant. And then I kept sucking him in, and he ended up putting me on for the whole year. If that hadn't happened, I don't, I don't know, I might be an insurance salesman. or Yeah. I don't know. Yeah. You can't unwind. Do you feel like there was an inevitability for the development of behavioral economics?
10:34
So without that collaboration with Amos and Danny, It wouldn't have started, as soon as it did. It may not have taken the same shape that it has now, but it was in the cards or not? I think I think something was in the cards, but, you know, like, if you look and I don't want to go into this because it's very much in the weeds. But if you look at what's going on in behavioral economics now, there are a lot of paths that I
11:06
find not particularly interesting and not very behavioral.
11:15
There's choice architecture at least means something. Or you can imagine it meaning something. There, there's an active research program in something called rational inattention. I'm 90% sure there's no sensible meaning of those two words in that order. There's inattention, there's rational. Nobody decides rationally when to Let their mind wander. You get distracted. Either you see that gorilla or you don't. And if you don't know what I'm talking about, never mind. So, so so.
11:58
No, I think the Kahneman Tvers, you know, I sometimes say our field should be called not behavioral economics, but Kahneman Tversky economics, because that's the flavor that emerged. Now, there's lots of other things going on, but it's the.
12:20
And what do I mean? I mean it's systematic bias. So that was the big aha moment I got from from reading their stuff. And you know, it's taken lots of branches. So Ted O'Donoghue is here somewhere. The the the sort of stuff that, he and Matthew have done is a particular theoretical approach to, what they call present bias, which is we weigh right now a lot more than later. They have was a brilliant paper called Now or Later, but, well,
13:03
I don't know whether they cite Kahneman and Tversky in that paper, but it's clearly of that ilk. It's a bias. And, so, yeah, I think
13:16
economics would have ended up somewhere, but, probably not in that place. And I don't think it was inevitable that Amos and I mean, they were when I met them, they were working on prospect theory. So I had nothing to do with that. And I watched them spend a year rewriting every word, switching between Hebrew and English. But so that would have happened and that would have influenced economics. But even that, that that paper didn't really take off right away. So, so I don't know. Okay.
13:55
I'm going to want to get back to the things you don't like about contemporary behavioral economics in a minute. But I want to stick with, looking back here, part, you and Amos and Danny and some others, had this plan to, a master plan In a way to create the field of behavioral economics, which has been very successful. And you said that you've never convinced a, conventional senior economist of the value of a behavioral approach. So you went after the youth
14:29
and created these essentially behavioral economics summer camps. And, I'm interested in how you came up with that plan. That is that's not part of our training. Our training is to think of, to ask and try the best of our ability to answer interesting and important questions, not to launch revolutions. So do you have any advice for any potential rebels out. Out in the audience? Well, yeah, I think the corrupt the youth plan is, you know,
15:03
so, my wife France who's here and I, you know, I have to watch what I say, but, I mean, she thinks somehow maybe someone might misinterpret that phrase.
15:16
But, Yeah, when you trying to convince
15:22
Gene Fama or Gary Becker or, Milton Friedman that this was a worthwhile approach was not going to work. What was really useful, though, is learning all their responses. So that's and here's a little bit of advice.
15:46
If you're going to write a paper that you know, some people are going to hate,
15:52
really understand the way they think and preempt their first three lines.
16:01
So yeah, and I think the big value I got from my experience at Chicago was getting to know Gene Fama and Gary Becker, who were the Nobel laureates. And Becker was sort of the extreme.
16:29
Everything individuals do is rational, He even has a rational theory of addiction. I don't think it's his best work, but, but, you know, having lots of arguments with Gary, who was a real gentleman and easy to talk to, but figuring out how his mind works. And, you know, I could write down a paragraph and then say, all right, now, what would Gary say? And then
17:00
and, the same with Fama. Who, is the person who invented the efficient market hypothesis. You know, I would the there's a, a room where, I was going to say some faculty at Chicago. Chicago Booth, go have lunch. It's really only the economists, I don't know whether we smell bad or are just boring, but, all other faculty have been driven out, but
17:39
there would be days when I would go to lunch
17:44
just because I had some question I wanted to ask Fama.
17:49
And, and then later we we were both tennis players, like, you and I and Bob and some of the others here are, and Gene and I later switched to golf, having rational expectations about our future tennis game. And, so I would continue these with Gene and
18:14
getting the opportunity to ask your intellectual enemy and I should say. I'm on very good terms with these people and still play golf with Gene when I can. But being able to go ask him, I asked him one day, what's more embarrassing to you, Gene? Bitcoin or GameStop? we'll Take a vote. How many people think he said Bitcoin?
18:48
How about GameStop? F Bitcoin.
18:56
He said Bitcoin shouldn't exist. GameStop. He basically put it in the category of
19:06
annoying Thaler anecdotes. Yeah. That, you know, it's a small cap, stock. And yeah, the prices are too high. I won't go into my Fama imitation, but,
19:21
so so yeah, I think
19:25
learning how your adversary, your intellectual adversaries think
19:32
and what their immediate responses are going to be is, really valuable. And then, finding young people,
19:47
you know, corrupt the. Youth is Not exactly. I mean, they're, there are many corrupted youths that are not that young anymore, including Dean Shu, That fall under my evil influence. But, Yeah, yeah, I think oh so, how did that happen? The Russell Sage Foundation, which supported our research. At one point they decided, that this is sounds like a very lefty. Kind of. It doesn't sound like a very lefty thing to do. And they were about improving the welfare of poor people,
20:35
but they said, look, we don't know how to help you guys. Here's a small pot of money. Do what you think is right.
20:44
And it was like, I don't know, $200,000 a year or something like that. And you couldn't write a lot of grants with that. So, Danny and I decided the summer camp would be the best thing we could do. And, that's been a big success. That's been. And then even higher ROI
21:10
return on investment. We, we we started giving tiny grants to grad students, like, $2,000, it's probably up to 5 or 10 now, but tiny grants, two page
21:27
application. One faculty member somewhere read them and said yes or no, and they got a check.
21:37
And I mean, they're, I challenge you to find a research funding program that led to more than that. So, that's what we did. The summer camp was a lot of fun.
21:57
Two people who were at the first one, David Laibson and Matthew Rabin, are still doing it 30 years later. So, yeah, that was a good one. That work that worked. So your answer to that question nicely sets up, my next question, which is, you seem to be having a ridiculous amount of fun, doing your job here, and you just talked about it. You've got all this, you know, hammer and tongs battle with other people, and you come out of it kind of cheerful.
22:34
There must, however, be some exceptions. And so my question is, what is the project you worked on that was the most frustrating, the most just purely difficult. That you nonetheless feel. I'm glad I did that. I'm proud of that work. It wasn't fun at all,
22:52
I don't think. I just don't do anything that isn't fun. I mean, could you tell everybody out there how to pull that off and and get a Nobel Prize? Well, All right, so let me be clear. I don't say that only having fun leads to Nobel Prize. Yeah right. But that, you know, like, when, Cass and I decided to write Nudge.
23:26
Here's this is an example of, of of that in action. So I had written this, paper with, one of my Cornell grad students, Shlomo Benartzi, on something That we called Save More Tomorrow. And the idea was we wanted to help people save more for retirement. And so we would invite them to increase their savings contributions next year when they get a raise, because we all have more self-control later. That's, the now and later. Right. So I'm planning to go, on a strict diet,
24:12
but not tonight when I'm having dinner with my old friends. So, that that program, we tripled savings in some company,
24:25
and I gave a talk on it at Chicago, and there's, one of the economists there was the discussant, and he was doing a lot of sputtering. But at the end of his sputter, he said, but, but but this seems like paternalism
24:46
now. We were inviting people to join a program where they would volunteer to increase their savings. Right. So I said, you know, normally when we talk about paternalism, we, think of coercion
25:06
and like, you must buckle your seatbelt. So I said, there's no coercion here. So maybe it's a different kind of paternalism. I don't know, maybe we could call it libertarian paternalism.
25:21
This really made him mad. You know, it was. Yeah. More sputtering. So then the next day, I was having lunch with Cass. We kind of had a weekly lunch,
25:34
and I said, you know, I came up with a phrase yesterday that I think is really going to annoy people because the libertarians hate it. They still hate it because they think I'm stealing their word. And attaching it to something they hate and paternalists Say, what do you? Those libertarians are evil? So. Right. So combining those two things. So I said, look. Let's write something about this. Maybe there's a book now, you know, Cass, I mean, books and he's his own book of the Month club. So,
26:24
but I then and there, I said, look, if we write a book, there has to be a rule, which is we only do it if it's fun
26:35
and we only have a chapter if it's fun.
26:38
And then we later during Covid, there was nothing to do. So, we revised that book and I had the same rule. We take out the chapters that are no longer fun. We put in new ones that are fun. So yeah well that translates to the experience of the reader as well. That because you're having so much fun, it's fun to read them. A lot of joy comes out of those, so that's a well, that's good. Allright. So it's working. So, since you mentioned Nudge, I have a question about that,
27:18
which is essentially why was that book ever necessary in the following sense? That is, why did we have to teach people that to get more, to try to advance the greater good, you need to nudge people, arrange the environment, when, of course, businesses have known this forever to advance their own, interests. They arrange the environment to sort of extract more of your money. We don't need to go any farther than the little tip screen that you get. Your'e paying.
27:51
You go to the coffee shop and you go, I want that, almond chocolate croissant. They put it in a bag. They haven't really done anything. And then the screen says the smallest tip you can give is 18%. And there are all sorts of things like that where it was clear to people, you structure the environment, you can get more what you want more of the customers money. Why did we have to have a book? Why did we have to have you tell us that to advance the greater good, we, You should pay attention to
28:27
choice architecture to nudges etc. So, paradox there. I told you, this is, you know, like, softball questions, right? So here's the here's the mean version of that question that I get all the time. And, and a lot recently because I'm in some podcast hell at the this isn't a podcast, right? It is not. Yeah. So I mean there's a version of that question which is we see this stuff all the time and it's all your fault. So, and, you know, you mentioned Homer and Odysseus,
29:09
and I said, look, it wasn't me, right? Odysseus figured out that he could fill the crew's ears with wax,
29:22
and he. Could tie himself to the mast. Right. And, you know, you can go back. It's in the Bible. So we didn't invent this stuff. And and, you know, in terms of bad behavior, Ponzi did not have Nudge available to read. Neither did Bernie Madoff. And there
29:52
there's lots of bad actors out there. And, you know, when we revised Nudge, we added a new section on Evil Nudging and gave it the fun name sludge. Yeah. So you see, I follow my rule, and yeah, I think that look, a lot of what I've written about is kind of been was obvious to anyone who wasn't an economist. I mean, you know, you used to tell me, I remember, you saying on more than one occasion, I never ceased to be amazed at how many convenient null hypotheses economics has given you. Yeah.
30:45
You know, like, oh, people have self-control problems. You know, you get you get paid for saying that, you know,
30:54
Tom Would never say it in a mean way like that. But that was what he was thinking. So, so, yeah, I think there now, I the idea of studying choice architecture. Well, first giving it a name was useful, though it would have been a really bad book title. And Nudge is so we didn't think of that. I mean, the the word nudge and the title came from the editor of Oxford University Press, who declined to publish the book but said, there was he said there's some internal stuff going on that
31:46
doesn't allow us to do this. But he said, you know, reading your proposal made me think of the word nudge, which is kind of a fun word. And
31:57
and we read that and said, yeah, there's a title. And then to tie the hands of the publisher, we used that word throughout the book in such a way that there could not be an argument about the title.
32:20
I have a different answer to my question. I'd love to hear your, response to it. The reason I think we have to teach people about nudging to advance the greater good is all about, as you know, the fundamental attribution error. Sorry for the inside baseball here for some of you, but the fundamental attribution error is the idea that we have a tendency to attribute people's behavior to them, characteristics about them, even when the situation perfectly determines, their behavior.
32:52
And, what that means is we're looking to the cause of the behavior we want is going to be inside the person. So when we're trying to get people to save more, to lose weight, to exercise more, we want to change the internal part, motivate people. And sometimes that's appropriate. When motivation is a problem, you need to, get life coaches to motivate them, have motivational speakers. But many times it's not a problem. People are perfectly well motivated.
33:26
They just can't figure out how to translate their motivations to their good intentions to effective action. And that's where nudging, comes in.
33:38
Flip it around to the private sector time. I'm trying to get more of your money. I know that you don't want to give me more of your money, so the way to do it is to structure the environment where that becomes more likely. The two are very different, possibly without a fundamental attribution error. Nudging for the greater good would be just as intuitive as nudging, for one's own good. Yeah, well, I think it was an unfamiliar idea in public policy circles, and I you look,
34:14
I do accept a little bit of blame for
34:18
things like the strategy of signing you up with one click for a dollar a month and then automatically renewing you at $30 a month.
34:32
I proposed in the
34:38
final edition of Nudge that I insisted on that title to preempt my coauthor from coming up with annual revisions, which he would be able to do in about an hour. But, the in the waning weeks of the Biden administration, a rule was passed that we explicitly proposed in that book, which was that anyone who sells an online membership has to be allow you to cancel the same way you enrolled. So if it's one click, it's one click. And this is a rule that was passed by the FTC,
35:28
I think it went into effect.
35:33
I, don't really want to draw any attention to the fact that I don't think it's been repealed, but I'm also quite sure it's not being enforced.
35:46
So, you know, yeah, I think there's more of it going on and how to regulate it I think is,
35:58
a very interesting and complicated problem that is way too far in the weeds for us to talk about here. Okay. So I want to get to, the contemporary scene in behavioral economics and the possible future. And I have two versions of this question. The more contextualized, complicated one,
36:20
comes from the eulogy that Danny Kahneman gave for Amos Tversky where he noted that when they were working together, Amos, kept using this phrase, let's take what the terrain will give us. And in his eulogy, he said, and I'm quoting that Amos, had an unmatched ability to find the one place where the terrain will yield and then to take it all. And that, to me, raises the question of what is the terrain like right now In behavioral economics? Has the most fertile territory already been seized?
37:00
What are some areas to be seized?
37:05
You size up the terrain. Well yeah I.
37:11
Hey, when didn't you hear that part about the softball question? So I we've got a lightning round of questions. Yeah. Okay. Yeah yeah yeah yeah. Look, I think the,
37:28
let's start with macro,
37:33
a macro macroeconomics, first of all,
37:37
I don't know how many macro economists there are here, but, I, I think
37:45
it's a let's just say it's an underdeveloped area of the field. It's really hard. Part of the reason why it's hard is there's not much data. Now, you might think, what is he talking about? There's an announcement every week on some vitally important thing. But, you know, thankfully we get recessions like, once a decade. So, you know, the, the number number of recessions you might be studying is on the order of ten. And, you know, that's not a large end. And and there are too many variables.
38:31
So, does anybody understand right now what's going on in the economy? I don't think so. I think the, the Fed, which is arguably the.
38:52
Most expert part of our government, especially after they get done firing all the scientists. So, I mean, it's it's really,
39:08
full of, experts but you know, there's so much is going on, that there are legitimate arguments about, you know, the, Trump wants them to lower interest rates. You can you can make a perfectly good case that they should be raising interest rates. I don't know what the answer is, but but there's almost no discussion of behavioral stuff in macro. Here's, here's here's a simple example. In the beginning of the Obama administration, there was a financial crisis.
39:55
So every macro economist thinks, alright what you should do is give people money, which is what they do right now. What form should it take? So, one possibility is send everybody a check or even better, deposit it right in their bank accounts. Another is, spread it out. So let's say we're going to give people either $1,200 in a lump or reduce your withholding by $100 a month.
40:37
So what should we do? Well, economic theory has an answer. It doesn't matter. It's a definitive answer. It just doesn't matter. I mean, there might be second order effects, but one is faster. But, you know, the theory doesn't tell us.
41:00
And but you have to do something now. The Obama economic team, which was a really first rate group of economists. I know they talked about this.
41:17
They ended up deciding to spread it out.
41:22
And the argument for doing it that way is if you give people a lump, they're more likely to save it or pay off debt. Like if you study what people do when they get their tax refunds,
41:40
that, and the average household gets $3,000, tax refund, which of course, in and of itself is an anomaly. Why why are people loaning money to the government? So so the argument was spread it out because most of the population is living more or less hand-to-mouth. And so if they run out of money later in the month, they'll spend more. So that's what they did. And notice that's kind of based on them not noticing anything except that they haven't run out of money yet.
42:26
When Trump had the similar opportunity, he wrote a check and of course signed it, in his way.
42:44
I, I think politically Trump had the right way to do it. I think in terms of stimulating demand, I think Obama had the right way to do it. I don't know which which is the right way to do it.
43:02
It depends on who's doing it, I guess. But you can see there there's there, you know, I, one of my favorite subjects is what I call mental accounting, which is how you categorize money. And that, again, macro economists are oblivious to this notion. And, this would be one example of that. So I think macro is ripe. And there are many other,
43:39
branches of economics where people have only scratched the surface now of course, there was only one Amos, and it would be we need more clone Amos, but, it finding the one where you can make a difference in a way that that economists will find appealing.
44:10
That that's that's a different trick. But but yeah, no, I don't I don't think we're done. I, I think we've barely started.
44:22
Okay. When we set up this event today, Suzanne and Ted O'Donoghue had the, very good idea to, solicit questions from anyone who registered for this event. So these aren't softball questions like mine. So, be on your toes here. by far the most common, question was some form of this, out of this is an amalgam. Really, out of all the behavioral economics anomalies that you have studied, which one do you think is the most relevant in today's world
44:58
with first version of this question, the development of AI, or if you'd rather not answer that one, the power of social media to shape what we think and how we think about what we think. So I don't consider those softball questions. Those are other people's questions. Yeah. Thanks, Tom. Well, look, for sure.
45:23
I mean, I, I'm not worried that the effect of AI on X will be understudied and,
45:34
and I wouldn't recommend anybody to go down that path. I mean, it if. Sure, study AI, but, that's a wave. That's a wave that's fully underway. And is not under-explored. You know, I think the the social media is not as the wave isn't as big and the the effects may be quite large and so yeah, I, I, I think that there are promising things to do, but,
46:21
it's not like here's the thing to do. And I mean, I think it's, it's a promising thing to do.
46:31
How about this then? Self-help has been around forever, but it seems to be peaking. It seems like every third podcast is about some kind of life hack and the profession of coaching, has taken off. And so my question is, there's a lot of demand for this out there. Is there one behavioral economics inspired life hack that you'd recommend to people out here that stands above the rest?
47:12
Make it fun. Make it fun. You know, but, let me let me do what students do when you ask them a hard exam question. I don't know, was that allowed anymore to asking hard exam questions? I, I guess you can ask. We get lots of complaints so. You just have to give A's anyway. But so I do think that we all need more coaching.
47:47
You know, we had the greatest tennis coach of all time. There's some of us still around who used to hit with Eddie Moylan, he was the tennis coach at Cornell tennis and squash for a long time. And would hit with hackers like us and, but there's, you know, and,
48:23
You know, I've made use of the world's greatest clinical therapist.
48:29
Not not as much as I have. Yeah. We need more of that. And, and, you know, let me give you an example in we're in we're in academia. Yeah. It's still the case that if you get a Ph.D. and this is certainly true in economics, I'm pretty sure it's also true in psychology.
48:54
You get essentially no instruction, On how to write a good paper
49:04
or how to teach.
49:08
And you're trying to get a job, in which your two tasks are writing papers and teaching. Now.
49:20
I'm pretty sure that's too little, you know, I some of my grad students are here, but. And we would, you know, Suzanne may take me to task later, but I, we would talk about what makes a good paper and what makes a bad paper, no don't. When, Benartzi was here, he would come in with a list of ten ideas, which is, by the way, a great approach if you're going to talk to your advisor,
49:59
here's what you shouldn't do. Work for five months on a project until you've screwed up your courage to go talk to your advisor. No. So what Benartzi would do is have like ten ideas and he'd go through and I'd go, no, no, no, maybe no, no, no. And then he would come back. So but I, I didn't have a class on how to write a good paper. And I mean, I never taught one, I never took one. I've never heard of one. And and it's hard to say what makes a good teacher
50:43
because I think it's, it's so person specific. It's like how to be a good tennis player. Well, get the ball back and then hit it where they ain't, right. But but you know, if you take the two best tennis players in the world right now, Sinner and, and and and Alcaraz, they play completely differently or Federer and Rafa,
51:14
are they playing the same sport? So it's not like there is the way to play tennis.
51:22
You have to find the way that works best for you. I think that's really true in teaching. And again, you could use coaching, but it would God, it would be time consuming to, you know, are you going to go sit in, how many three hour lectures of your students are you going to go and watch and say, you know, and and you would probably wouldn't even know what to say? You can. Well, this isn't working. I noticed that half the class stopped coming after the second class, and so
52:03
so I think I by now I've forgotten what the question was. But,
52:11
I could use some coaching.
52:15
The landscape is changing on that. At Cornell there is the Center for Teaching Innovation and, faculty who want it can get instruction on how to write grants and possibly write papers as well.
52:29
I think it's time for our real softball questions. The the lightning round. Okay, okay. No. Yes yes. And so this is, go with thinking fast. Suppress the thinking slow part. Yeah. On the back cover of your book, Malcolm Gladwell is quoted as saying, if I had to be trapped in an elevator with any contemporary intellectual, I'd pick Richard Thaler. Who would you pick?
53:03
Hmm
53:10
I'll listen. Oh, Alex Imas. Coauthor that that's some book. Okay. Number two, if you couldn't be an academic economist and had to choose a different profession, what would it be?
53:34
Pundit. That that fits your skill set very well.
53:42
Content free. But.
53:46
Okay. This one may not be a cream puff question. What's your favorite paper of Tversky's that wasn't written with Kahneman? Or your favorite paper of Kahneman's that wasn't written with Tversky?
54:01
Well, with Amos, it has to either be Similarity or, Elimination by aspects. I think the latter one is wouldn't be a popular answer. Elimination by aspects. Is suppose you have to choose from a wide variety of, options, like you're you're moving to New York, and, You have to find an apartment. So what are you going to do? And here's what you won't do. You won't enter Every apartment in the city into a spreadsheet put weights and pick the one that maximizes your, your utility.
54:44
So the strategy Amos describes is you take the most important attribute, say, the neighborhood and okay, I want to be on the Lower West Side and then all right next I well it has to fit in my budget. So under 50,000 a month and and and and then it has to have two bedrooms and so forth and so on. So I think that's a really brilliant paper that isn't,
55:22
with, with Danny well, you know, Thinking, Fast and Slow Is just an amazing accomplishment.
55:36
We'll go with that. Good. You have, an award winning photographer as, your wife, if one. If just what of all those beautiful images comes to mind that captures her magic And maybe we could put it on a website. What springs to mind? I'm sure. Well, yeah. No, well But so France Lecrerc L E C L E R C her uncle is a formula one driver. Well there we can go by popularity. There are three of her images that are winning contests left and right. You can find them, one is, What are there, four,
56:36
African women with white hats, sitting in front of a wall that has white circles on it. They happen to be sitting there. I can't describe any of these. That will make them sound good, but you'll find it. Another was taken in Saudi Arabia. It's a picture. The first thing you see that captures your attention is in the background. And it's a camel.
57:11
That has been hoisted around its belly and moved by a crane, I guess it's at a camel fair And in the foreground are two Saudi gentlemen that seem to be
57:31
bartering. And then there's a bunch of camels in between. And then the third one, is a picture in which there is a kid who has been seemingly playing soccer with a basketball.
57:53
And he's in the background, and there's an elderly woman sitting on the front stoop that is about to be struck by that ball. It's like this far from her nose. And the kid has got wide eyes.
58:16
He was like this, and then these. And then there are a couple of kids behind him that are. And they're all just taking in this scene, except the woman who's about
58:31
to get a basketball in the nose. So I would look at those three. Well, maybe with France's permission, we could put one or those three. Yeah. Okay. I'd like to. End the way a prominent podcast ends, Ezra Klein always ends his show by saying always our final question. What are three books you recommend to the audience? Since this is in part a book event of yours, what are two other books that, you recommend To the audience? Well, I did get Alex Amos in as the answer to one of the other questions.
59:11
Yeah. You did. Who is the coauthor of the book that, we're not mentioning right now.
59:21
One book is, Michael Lewis' is amazing book about Amos and Danny and called The Undoing Project. Michael is a good friend of mine. We both. He lives in Berkeley, and France And I spend half our time there.
59:44
When he wrote Moneyball, he and I met and I said, you know, Moneyball is really a behavioral economics book. Yeah. One part of economics that deserves more attention is, is misbehaving by firms. And that's what Moneyball is about. It's about teams not optimizing, punting too much in baseball. Not enough three point shots, too much punting. So various conversations he and I had after that, he started reading Amos and Danny. And then he tells me, I'm going to write a book about Amos and Danny.
1:00:31
I said that Michael is the dumbest idea I've ever. What are you going? You know, these two guys who sit in a room arguing?
1:00:42
There's no action there. He's, a good writer, though, and, it it's an amazing book, and it's amazing. Somebody could write a book about
1:00:58
two intellectuals arguing,
1:01:03
and, and it's a sneaky way of learning about the field of, judgment and decision making.
1:01:14
A little bit like finishing Ron Chernow's, Hamilton biography and saying there's a hip hop musical. Yeah right. It's like, what? Yeah, I would have had that idea.
1:01:27
It's really a lot like that. Somebody says, oh, I'm going to make a rap musical, about Hamilton. Yeah, right. Good luck with that. So. But you better be as talented as Lin-Manuel or Michael Lewis to pull off that unlikely thing. There's a book called Breakneck by a guy called Dan Wang.
1:01:56
It's a it's a new book. He's born in China. Parents moved to Canada, and then eventually the U.S., so he's bilingual.
1:02:10
It's a book about here's his theory of the world. China is run by engineers,
1:02:19
so they're good at building stuff. The US is run by lawyers, so we're good at not building stuff.
1:02:32
I think it's a fascinating, proposal. There's another thing in that book that he talks about, process knowledge that. So how did China get to be that? They're the place that can build everything?
1:02:57
You know, that fact explains a lot of what's going on in the world, right? And I don't know, that he explains everything, but I think it it asks a lot of questions and I should say that this recommendation is based on only having finished about half of it, but, but, it's causing me to think a lot.
1:03:28
The third book. I'll recommend a classic that doesn't get the attention that it deserves. Let's see, what was the name of it again? Oh yeah. How We Know What Isn't So.
1:03:47
This is the classic talk show guest and the host you know, Exactly. That's a good way to end. Thank you, Richard, for coming back to visit And thanks all of you.
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