Masters in Business How Investors Fall Into Bias Traps with Economists Richard Thaler & Alex Imas
21 snips
Jan 16, 2026 
Richard Thaler, a Nobel laureate and a pioneer in behavioral economics, and Alex Imas, a behavioral finance professor, delve into the quirks of human decision-making. They explore how mental accounting affects spending and the psychology behind NFL draft picks. The duo discusses the enduring nature of behavioral biases and the implications for investors, especially regarding the winner's curse in auctions. They also share insights on choice architecture to combat biases and the impact of gamification in trading, offering practical advice for aspiring economists.
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Predictable Human Errors Beat Homo Economicus
- Kahneman and Tversky showed people make predictable errors that differ from the economist's rational model.
- Richard Thaler used those predictable deviations to build a practical behavioral economics framework.
Money Is Not Fungible In People's Minds
- Mental accounting causes people to treat money differently depending on its source or label.
- Thaler notes house-price gains barely change spending while cash or checks from sales spur far more consumption.
The Nobel Wake-Up Call
- Richard Thaler describes waking up to his Nobel call and being asked how he'd spend the prize money.
- He joked he'd 'spend it as irrationally as possible' and later wished he'd set up a Nobel account for fun spending.
