Is There a Better Way to Choose a Life Style Fund?

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People are very heterogeneous, so the default that's good for one type of person might not be the ideal default for another. People have a lot more information about their own situation than any corporate manager or government ployee had. That's probably as much insight as 90 % of the participants have about their own preferences. So this is just not a fatal flaw. There's no reason that smart defalts need to worry about that.

Richard Thaler of the U. of Chicago Graduate School of Business defends the idea of libertarian paternalism--how government might use the insights of behavioral economics to help citizens make better choices. Host Russ Roberts accepts the premise that individuals make imperfect choices but challenges Thaler on the likelihood that government, in practice, will improve matters. Along the way they discuss the design of Sweden's social security system, organ donations and whether professors at Cornell University are more or less like you and me.