Swedish citizens were encouraged to choose a portfolio for themselves. Half of the money they invested was in swedish stocksa this we call in fin the home bias. People have a tendency to invest in their home country. The average investor lost forty % of their money in the first three years.
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.