10% Happier with Dan Harris

How To Work Around Your Own Irrationality | Richard Thaler

Dec 6, 2021

Richard Thaler, Nobel Prize winner in Economic Sciences, shares his insights on the complexities of human decision-making and habit formation. He introduces the concept of 'nudges,' small changes that can significantly influence choices, contrasting them with 'sludges' that complicate decisions. The discussion delves into behavioral economics and its real-world applications, including financial decision-making and climate change solutions. Thaler also highlights the importance of understanding our irrational behaviors to foster personal growth and happiness.

40:27

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Episode guests

Richard Thaler

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Episode notes

Intro

3min

Understanding Behavioral Science and Economics

4min

Navigating Choices: Nudges and Behavioral Economics

13min

Understanding Financial Irrationality Through Personal Experience

4min

The Power and Pitfalls of Nudges in Everyday Life

2min

The Balance of Nudging: Personal Finance and Technology's Role

3min

Harnessing Self-Nudges for Better Decision-Making

2min

Exploring Libertarian Paternalism and Climate Change Solutions

4min

Nudges and Bounded Rationality

7min

10.

Reflections on a Book and Upcoming Insights

3min

This episode explores how to make the infernally difficult challenge of habit formation a little easier, with guest Richard H. Thaler, who won the Nobel Prize in Economic Sciences in 2017 for his pioneering work in the fields of behavioral economics and finance. Thaler is the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago’s Booth School of Business, where he also serves as the director of the Center for Decision Research. He is also the co-author, with Cass R. Sunstein, of Nudge: the Final Edition.

In this episode, Dan and Richard discuss what a nudge is as well as its opposite – which Thaler and Sunstein call sludge. They also discuss other fascinating concepts, including: choice architecture, mental accounting, libertarian paternalism, bounded rationality, and how the lessons of behavioral economics can lead to a happier life

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