Richard Thaler on Behavioral Economics: Past, Present, and Future. The 2018 Ryerson Lecture
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- Опубликовано: 15 май 2024
- In the 2018 Nora and Edward Ryerson Lecture at the University of Chicago, Richard H. Thaler discusses his Nobel Prize-winning research.
Richard H. Thaler is the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. He was honored in 2017 with the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his pioneering scholarship in the field of behavioral economics.
The Ryerson Lecture grew out of a 1972 bequest to the University by Nora and Edward L. Ryerson, the latter a former Board of Trustees chair. A faculty committee selects the Ryerson lecturer based on research contributions of lasting significance.
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I just watched the excellent "The Big Short" and was curious about Thaler. Great introduction.
I forgot. Did the movie mention Thaler?
@@khuntienboy he was in it. In the movie he explains what synthetic CDOs are alongside Selena Gomez.
O
Got
I got here by searching behavior economics after I saw him in Noble Price meetings
I searched for "long and boring economics lecture" to help me sleep and got here. RUclips disappointed me, i was up all the time watching him explain behavioural economics. Definitely a good find for the subject, not much for sleeping
💤
I like your humour. 👏
Hahaha I do get to sleep with economics videos 😂 thought I was weird !! Haha you made my day!
Take a sleeping pill
Thank you so much, University of Chicago, for making this talk available.
Had it not been... the You tube - would I have been able to listen to Noble price recipient, at my will, sitting lazily in my easy chair in my bedroom ?
Let me also thank University of Chicago who took all the efforts to upload it!
Thaler's opening remark at the 4th minute is not only meant to be taken as a joke, it's the realization that human do not always maximize their own utilities given any circumstance, economic, or non-economic.
0:00 Opening statements
4:00 I got a phone call
Economics is about behaviors
Borrowing good psychology
13:17 Choosing what’s best for oneself
Econs vs Humans
15:41 Is Optimization Plausible?
Yea? No?
18:34 Impulse Control, Self-Restraint, Self-Control
20:50 “As If”
• Assumption of intelligence
• People make errors, errors are predictable
24:07
• “In the Real World People get to learn”
The higher the stakes, the less practice,
26:26 “If people behaved in markets the way they do in your experiments then they would.....”
27:36 Fail to save for retirement -> you get poor
31:22 Self-Interest
• Split or Steal?
More people steal than split?
36:00 Cooperation rates fall slightly as the stakes rise
37:24 Small $ Big $
• “I don’t want to be a jerk on tv for $500”
41:22 Closed End Mutual Fund
Great learning for me. Infact a new knowledge and I unlearned today few of my old concepts. Thank you, Dr Thaler.
One of the best video I ever watched in my life. Insightful and really useful for personal introspection.
Love the transcript also coming on this video.
Brilliant talk. Loved it
Health, Wealth and Behavioral Science: Right thing To do in decision making takes self control, rational thinking, gathering good information influenced by learning from the past, going into the future we may borrow good psychology, from Fermis or Thaler. Helping Humans take care of themselves better i.e Thalers, is a hard thing to do but well worth it. Thank you very much for this lecture.
We're notoriously bad at balancing social and antisocial tendencies. Too social and others take advantage. Too anti-social and you wind up miserable. A correct balance would become a force-multiplier, an actual community, where people work together to produce more than they would just doing it alone. I think we're going to collapse if society, as a whole, continues to be narcissistic, malicious and bitter. Economic psychology is the most important topic no one even knows exists.
I love this thought and YES it IS how we should (and how historically humans have always) operating as a society (or more realistically, in smaller communities within society)
Behavioural to the mankind is always irrational.If you move down from great economy till the lines of lower precision then you will find there is low education thus a social or environmental destruction we should look into it as it could be a retarded activity as my case and may start in near or far future....so the age is bar sometimes but we need to take the primitive precaution by not to take account the age not bar scenario.The ingestion of quality education is also a hindrance.
One of the best thing that I liked about was that it was very magnetic i.e we were attracted towards the lecture all the time.
That was great. Thanks for sharing :)
I'm confused why a lot of economists thought that consumers always make good decisions and have no self-control problems. What do they think marketers have been doing this whole time? (They're taking advantage of people's lack of self-control, duh).
They don’t. Behavioralist are attaching more to econ then Econ does. They are also redefining language to match the ideas of psychology. Behavioral economics is just wordplay
People do not seem to realize this but behavioral economics is an EXTENSION of neoclassical economics. A general misconception of neoclassical economics is this idea of rational, non-biased, infinitely willed agents, but that is not what makes neoclassical economics what it is. Neoclassical economics simply means an axiomatic and optimizing approach to understanding economic principles (nothing more nothing less). Behavioral economics does exactly this whilst relaxing older assumptions so behavioral components can fit into the model's purpose for, again, optimization.
By all Neoclassical Economic theory like Adam Smith infested,Keynesian approach etc,emerged as a primitive form of a model as suppose one to one mapping of a metrics but after that the model got so many things in this to generate a high infestation in the environment then after a lot of work they got the highest peak and got subsumed with asdimptive quality.
Great talk! Thanks much to Mr. Thaler and Uni of Chicago
excellent LECTURE.
Brilliant man!!!
very interesting one,marveled!
Amazing!
Very good lecture, I am aiming to make career in this area & checking it's application in banking sector
can someone tell me if and where can I take the slides of this presentation please?
Thank you!
Brilliant!
when he said they ended up saving 30 billion dollars more I was actually surprised nobody applauded! That was so cool!
“All are problems are behavioral”
You are apsolutly right of course! I am not a native speaker and I know it's not that important but it's spelled " All OUR problems...." Tnx!
@@ivanaandric5703 ekkkkkkk 😖
beautiful
Thank you
26:52 Prof. Thaler: "It's impossible to do. Try it"
Me:" Well, I mean...Ok."
- ¯\_(ツ)_/¯ .
Me again: "Daym he's good!"
BTW Richard Thaler starts talking at 4:00.
Would've been nice to have a bit more statistical data accompanying the cooperation as a function of stakes graph. sample size per bar? a link to a freely available publication would be better.
This is just a lecture. He has decades of papers and books published with way more in-depth data. This was just a relaying of ideas and findings, sans the research numbers.
@@drowsspeed1 lectures in my field are regularly accompanied by quantitative support. if i had the time to read through all his seminal works and find it myself i would have. this is not a critique but rather a request for persons like myself.
As an undergrad BA Econ. and MBA Intl. Econ. major grad. BE was not even invented then. Since of course, I now want to add to my Micro knowledge and embellish with BE. Where can I enrol in an affordable, online PhD Econ. majoring with BE? Thanks Prof. Thaler and UC.
Summary:
1) What is Behavioral Economics?
It started actually far away in time, with Adam Smith, who talked about Overconfidence, Loss aversion, or self control...
Or Kaynes, who invented Behavioral Finance, and told us about the fluctuation on the market.
Pareto also.
The vision of U of Chicago, by Clark, that explained about psychology and Economy.
2) Assumptions of Economics:
Optimization
Consumer Sovereignty -> no self control problems
Unbiased beliefs
Self Interest
It creates the Homo-Economicus (which Thaler calls "Econs", like Homer Simpsons)
3) Is optimization plausible a model of human behavior?
No.
-> Some tasks are harder than others,
-> and some people are smarter than others.
We have self-control problems.
We have excuses for retaining the status quo.
4) If you raise the stakes enough, people get it right.
In the real world, people get to learn.
5) It is much easier to make money exploiting consumer's biases than trying to correct them.
-> Always say no to extended warranties.
6) Prisoner's Dilemma and the game shows that he studied.
-> Actually raising the stakes did not have a meaningful impact on how people behave (I am not sure about this one)
7) The Efficient Market Hypothesis (Fama)
You cannot beat the market (no free lunch). He says that the free lunch in approximately true.
The prices are right. Asset prices are equal to intrinsic value. He says that there is no really way to say that prices are right. And gave us an example that people invested in Cuba Fund even if there was no investing in Cuba for this fund. And even so people BOUGHT the fund when Obama said that he would relax the trading with Cuba (would trade more).
People are irrational. Markets are irrationals.
8) Supposedly Irrelevant Factors
Sunk costs
Framing
Which options are named as defaults
Mental accounts (people put labels on money, they should not).
9) Retirement savings
-> You should make it standard to save (automatically enroll, make it default to people save). He explains that his plan that was called "Save More Tomorrow", taking into account that people are lazy, so saving more tomorrow (automatic escalation) made them save much more.
10) Please comment if I said something wrong. I will try to update this comment as people notice more things.
Hope it helps!
25:00 I don't see the 'Stakes' and 'Learning' argument to be self-contradictory, I'd say they are complementary: If I buy a house, most people will be very alert and focused and gather a lot of information before signing the contract. When buying a used car every now and then I will eventually learn that it indeed does make sense to buy one that has been certified by a third party with regard to its quality.
I think the idea is that, even if you're alert and focused and gather information, you still may not optimize your choices when purchasing a house. Only by making multiple purchases, where you learn from your mistakes, do you learn and approach optimization.
Natural resource and commodity and high tech in efficiency are big contribution factors in market and alliance of even military and cultural treaty
Price theory base on value cost and choice between max profit and max of consumers but environmental cost should not be ignored either that is why non profit organization was invented
38:15
Instead of laid off we could raise productivity and expand credit certain markets or products market to fight inflation and prevent collapse
Wow
41:18-45:31
As for an overarching economic equation or theory, there has to be integration and merging of other sciences. Economics only works with humans and their decisions, so psychology, neurology, and axiology would need to be integrated into Behavioral Economics and Micro/Macro Economics. Every human has their own set of values/priorities in life, that dynamically change as they experience life. Now multiply that by billions of people....
This is specially valuable to me as I’m undergoing self controlled day trading pattern to make a million in a daily 4 trades set up for a month. With starting fund of USD1K. Most difficult is so far not making daily target of profit but absorbing loss and regaining the standards as set prior. Slipping off the system is my problem and I’m trying to rock solid that part of my behavior.
Q: How does one stomach the study of economics who is so deeply repulsed by the institutions of society-in their mechanistic, contrived toxic artificiality, in their conspicuousness devoid of soul and substance, and, in their mere mirroring of each other, from public schools to government bureaucracies to corporate offices to strip malls? The study of so many economists and their fancy new jargons of economic discourse who accept all these institutions and construct whole systems of thought around maintaining them? Who have created careers pandering to one governmental regime or another, one monopoly or another?How does one learn to stomach the sugar coated fantasy of a laissez faire economist who blatantly disregards the externalities of unfettered capitalism in its breeding of such a destructive decadent consumer culture? How does one tolerate the behavioralist economist who assists corporate ad firms in exploiting the emotional and instinctual vulnerabilities of consumers? Or the Keynsianite who promotes his asinine stimulation for unnecessary demand for unnecessary products to create unnecessary jobs to maintain an outdated no longer necessary standardized 9 to 5 Protestant work ethic for all? How does such a student tolerate the lies and deceit? The fraudulent upkeep of this status quo?
A: One must tolerate this study in order to achieve a thorough understanding of its genealogical unfolding-all its intricate theses and antitheses-such as to invoke its Creative Destruction via a new working synthesis-a more holistic economic school that lays the blueprint for our most authentic, beautiful, sustainable abundant manifestations of love, work, and knowledge. Welcome to My School, The Holistic Integrationist, Project Integrity International. My own unfettered creative destruction!
01:12:55 the dude in pink shirt shatters the fourth wall
👍👍👍👍👍👍
23:28
$ = Dollar
Page 410
Coins known as Joachimsthaler were struck in the silver mines of Joachimsthal (St. Joachim Valley) in Bohemia during the early 16th century.
real = ri-yal
They should call this how to make investors feel guilty for trusting the investment industry. The fact is the CEOs are making more, and investors are making less.
48:36
I'll be back
According to economic theory
All human are trying to maximize their utility
In reality .people are so unique because of their background
So the quest for economic theory is actually impossible and irrelevant
The society is too complicated and complex
Look for real human behavior to serve as evidence
.
Human not necessarily are self center
Extended warranties exploit the rational fear a product will be defective (common experience, real info/data not provided), as standards in manufacture & sales race to the bottom of cost & price. Most have worthlessness writ in pages of fine print legalese, obfuscation of liabilities for fraud claims. Does anyone read the pages of mortgage documents they sign (usually assigned a lawyer)? Behavioral economics? The stock market is corrupted with acess, layers of specialized experience (smarter?) & practice, insider information, those who act rationally to avoid risk, most often legal. In God(s) We Trust. Tech tools to shape human behaviors.
A word about Professor Zimmer's introduction: Professor Thaler is described as having been awarded a "Nobel Prize in Economics," whereas there is no such prize. Rather, the prize colloquially going by that name is called something like the "fghjfgh Bank Alfred Nobel Memorial Prize in Economics," invented around 1970 by those bank executives in such a way to borrow the prestige of actual Nobel Prizes (by using the founder's name) and honor economists mostly for now discredited (such as by Professor Thaler himself) theories, especially "neoclassical/rational choice" theory.
So Professor Thaler almost flirts with (but never quite achieves) humility, by saying all he really does in his work is resuscitate in the economics field obvious points that people act or behave based on complex combinations of intuitions, appetitive drives, emotions, rational and non-rational beliefs, accurate and inaccurate perceptions, moral convictions, sound and unsound kinds of cooperation, altruism, habits, logic, efficiency-minded planning, conceptions of fairness, aesthetic considerations and other factors. But the problem is EVERYBODY (possibly quite literally) already knew this, because we are talking about motivations everybody, even quite stupid and non-reflective people, act on. You could just ask anybody, and they will confirm they act on combinations of appetites, efforts to self-control, efforts to be fair and comply with religious convictions-- the whole range I just enumerated.
So what Professor Thaler is really saying is that neoclassical theory was systematically misrepresenting what people actually do, and indeed got these "Nobel Prizes" (ie, fake Nobel Prizes) for these misrepresentations, giving very tainted or corrupt, unearned prestige to these theories, and Professor Thaler has built a career (and gotten one of those fake Nobel Prizes) by confirming basically what Homer Simpson could have told you: "That's not what people really do."
So why doesn't Professor just come clean more directly by giving a "behavioral economics" account of the history of the economics profession, focusing on University of Chicago rational choice/neoclassical economics, leading up to his own work and fake Nobel Prize, along the lines I just presented. But to be true to behavioral economists' interdisciplinary aspirations or claims, it would have to take on the character of "ethnography" - a synthesis of ethos and worldview, belief systems, ecological resource factors... Basically what you'd come up with is a culture of truth-indifferent academic entrepreneurship in which peddlers of false claims market these claims to each other in exchange for salaries and academic prestige, and as a community marketing these (almost invariably greed-validating) doctrines to the financial industry, and administering an arbitrary (because based on inculcating and testing competency in falsehoods, usually pseudo-scientific for prestige and illusion-of-rigor purposes) credentialing process for the business and finance community. The economists invented this fake Nobel Prize (of course using the word "science" in its title, to perpetuate the myth that this is real "science" as opposed to myth and deceit) to create an elite in the profession, which Thaler joined simply by exposing what everybody except the peddlers and consumers of neoclassical snake oil had been saying all along: that the ersatz-Nobel-garlanded baloney was in fact baloney.
If Homer Simpson could get an academic career basically for admitting he's Homer Simpson, and get a fake Nobel Prize for this admission, and be invited to give the Ryerson Lecture, this is much what it would look like.
minute 26:02 " I SUPPOSE" I'm referring again to Milton Freman ( in relation to the notion of The invisible hand wave) "I suppose" !! there's a line you don't expect from a Nobel prize winner
" OLD FATHER TOLD ME HOME-TEAM."(5)(MASTER ROOK)(PUZZLE OF GOD SOLVED)
Praxeology.
1:15:42 the woman at the bottom left lmao
Grwat
Why the hell are they not laughing at the continuous time joke? Whats wrong with people? :-)
" I AS THE PROFESSOR OF INTELLIGENCE BUY PROFESSOR RICHARD THALERS SOUL FOR $100,000 WHEN I RECEIVE MY FIELDS MEDAL."(IT)
"AS JESUS CHRIST, I WILL BUY THE CHRISTIAN CHURCH FOR $510,000 HUMBLY SPEAKING OF COURSE."(SPIRIT)
Who has just bought Apple Care for their iPhone12/Mac? lol
Kinda funny he promotes saving for retirement and investing in funds when he owns one.
I don't see any issue with that unless he was shilling his own fund. Saving for retirement is important, no one is going to take care of you when you are old, least of all the government.
This is very slow and unenlightening.
This is exactly what I feel.
good lord this is boring. my mistake watching anything to do with economics lol
Not his best lecture. Great writer, great ideas.. just okay delivery.