The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics 554. Lucky By Design: Strategies for Success in a Scarcity Economy
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Dec 4, 2025 In this episode, Dr. Judd Kessler, a behavioral economist and Wharton professor, delves into the fascinating world of hidden markets—the unseen forces shaping our decisions. He explains how familiar rules can lead to unfair outcomes, using concert tickets as an example. Listeners learn about strategies to enhance decision-making, such as when to pursue big opportunities versus settling for less. Judd also discusses the importance of signaling in competitive landscapes like college admissions and job markets, and how AI is reshaping these dynamics.
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Hidden Markets Favor Nonprice Rules
- Hidden markets allocate scarce goods when price is excluded, creating races won by the tech-savvy or well-resourced.
- These markets often produce inefficient or inequitable outcomes like ticket bots beating normal buyers.
Rock-Paper-Scissors Teaches Market Strategy
- Judd taught his four-year-old daughter rock-paper-scissors to illustrate learning market rules and strategy.
- She played scissors every time and lost, showing knowing rules alone isn't enough without strategy.
Pick Gold Or Settle For Silver Strategically
- Decide whether to 'go for gold' or 'settle for silver' when competing in first-come races like reservations.
- Choose a less-contested option if the marginal value of the top choice is small to increase success chances.
