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
forum Ask episode
web_stories AI Snips
view_agenda Chapters
menu_book Books
auto_awesome Transcript
info_circle Episode notes
insights INSIGHT
Behavioral Science vs. Economics
Behavioral science studies human behavior, not just economic models.
It draws on economics, psychology, and other social sciences to understand decisions.
question_answer ANECDOTE
Humans vs. Econs
Richard Thaler jokes that they study humans because they are more like Homer Simpson than homo economicus.
This highlights that humans aren't always rational actors.
insights INSIGHT
Nudges
A nudge influences behavior without force or economic incentives.
Automatic enrollment in 401Ks is an example, simplifying a beneficial choice.
Get the Snipd Podcast app to discover more snips from this episode
Improving Decisions About Health, Wealth, and Happiness
Richard H. Thaler
Cass R. Sunstein
In 'Nudge,' Thaler and Sunstein argue that by understanding how people think, we can design 'choice architectures' that nudge people toward better decisions for themselves, their families, and society. The book introduces the concept of 'libertarian paternalism,' where gentle nudges guide people toward beneficial choices without limiting their freedom. It explores various aspects of human decision-making, including the distinction between the 'Automatic System' and the 'Reflective System' of thinking, and provides numerous examples of how nudges can be applied in real-life scenarios to improve outcomes in health, finance, and other areas[1][3][5].
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
The Anti-Diet Challenge kicks off today in the Ten Percent Happier app. If you’re not already a Ten Percent Happier subscriber, you can join us by starting a free trial that’ll give you access to the challenge, along with our entire app. Click here to get started.
10% Happier with Dan Harris 