Hidden Brain Follow the Anomalies
Oct 16, 2023
Richard Thaler, a Nobel Prize-winning behavioral economist from the University of Chicago, discusses the nuances of decision-making that often defy traditional economic models. He shares personal stories that reveal how social norms influence our choices, such as the endowment effect, where ownership alters our perception of value. Thaler also delves into the fascinating dynamics of the NFL draft, showcasing behavioral insights in player evaluation. His work sheds light on the psychological factors that drive everyday economic decisions.
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The Cashew Conundrum
- Richard Thaler hid a bowl of cashews from guests to stop them from overeating.
- The guests were happy, realizing more choices aren't always better, defying economic principles.
The Wine Paradox
- Professor Rosette wouldn't sell his appreciated wine but wouldn't pay the current price for it either.
- He would drink the expensive bottles, highlighting a disconnect between perceived value and market price.
The Sunk Cost of Basketball
- Richard Thaler and Jeffrey debated attending a basketball game during a snowstorm.
- They realized their decision was influenced by whether they had paid for the tickets, demonstrating the sunk cost fallacy.
