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Richard Thaler

lines on the record: 119
first: 2025-10-10
most recent: 2025-10-10
sittings or episodes: 1
sources: podcast

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“Well, so take just right now. I'm going to say the words Michael Jordan and give me an image. There comes to mind, and I can tell you what it is. It's Michael taking some last second shot somewhere mid-range with two guys hanging on him. Now that, even if you're Michael Jordan, that's a low percentage shot. Steve Kerr, who's now the coach of the Warriors, was on the team with Jordan. For an entire year, his three-point shooting percentage was 50%.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“For that, all shots are with two points. Now you have a shot that's 50% better. Now every team had somebody who could make 40% of their three-point shots. And teams average about half of their two point shots. How Nick, see if you can keep up with the math here 40% of three”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“You know this better than everybody, but people are good at something. Like being a chef. Many restaurants are run or owned by the chef. And being a good chef doesn't make you a good business person. The same is true of being a coach. You don't get to be the coach of a team just by being smart. You almost always have to have played that sport. And that doesn't make you a good decision maker. And the field of behavioral economics and the field of sports analytics, think of Michael Lewis's book, Moneyball, it's the same field. So why do I say that? Again, people optimize, right? So economists would say, well, teams are all going to do the strategy that maximizes their chance of winning. Well, let's take basketball. There was an innovation 40 years ago, the three-point shot.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“So much for economists. Look, basically everything I've done. Has seemed obvious after the fact, you know, selling reservations at a restaurant instead of, as you used to say, having five people you pay to say no on the phone, that seems like an obvious thing to do.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, lock the wine cellar. And so make it harder to do the stuff you want to do less of. And make it easier to do the stuff you want to do more of.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Well, you know, let's go back to the cashews. This is stuff everybody knows your mother told you that if you're trying to quit smoking, you don't have cigarettes around. If you are drinking too much,”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“If they have a top pick, they can trade down. So if you have the first pick, you can trade it for the seventh and eighth picks, or five count them, five second round picks. And those five players will cost you about the same as the Contracts, yeah, right, and if you look, I mean, any sports fan can rattle off the number of very high picks, quarterbacks, and others that have been complete busts. So here's the one statistic from that paper that I think is most compelling. Take the players at any one position. Let's say running backs and rank them in the order in which they were picked. So we have the first down to whatever. Now we ask, what's the chance the higher one picked is better than the next one? My co-author, Kate and I used to, we called this the better than the next guy stats.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“So, you know, the winner's curse sounds like an abstract concept, but Nick knows I wrote a paper about the NFL draft that applies exactly that concept. Teams really think it's valuable to have the first pick or one of the top 10 picks.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“A third of the time. Yeah. Now it's true that that's an impossible task. Meaning nobody can predict the market. But you should know that you can't predict the market. So a correct answer for eighty percent is, well, it's going to be somewhere between up 20% and down 10. That's a reasonable forecast.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“So the same is true for CFOs of Fortune 500. I have two friends at Duke who do a survey twice a year of CFOs and they're asked what's going to be the return on the S&P 500 over the next year And they are asked for a high and low estimate. And the correct answer comes out between those. I think they asked for 80% limits. And it's like.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Or in judgments. I mean, you ask people. What's the length of the Amazon River and give ninety percent confidence limits, meaning give a high and low estimate so that your 90% sure that the correct answer lies in? And the right answer will be within it, not 90%, but like 60%.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“And I've put that little note in my first class ever since then. And I say to people, look, people will tell you, don't take this class. All he does is tell stories. And I said, that's true. And talk about sports. That's also true. But here's this line from Amos Smartest Man on Earth. That's the way you learn. You're going to learn through the stories. So I think, you know, we show people that they're overconfident.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“I don't know whether people will learn that theoretical lesson, but they'll remember the jar of coins, and they'll remember stories. You know, I had two psychologist mentors, Amos Dorski and Danny Kahneman. Now both dead. Amos sadly died at 59, but at his funeral his son read a little note that Amos had given him that said something like, I'm not going to get this exactly right, but he had cancer and had a few months where he knew he was dying and was spending time talking to him. Has been useful and that he thinks People learn through stories”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“They pay too much. No, he didn't bid. And I said, Peter, how come you didn't bid on this book? I think it's going to sell. He said, no, I read the winner's curse. I knew. I can't bid on your book. And no, don't bid in auctions. So I said, well, you know, maybe this one should have been an exception. But that concept, I haven't forgotten your question.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Right. So instead of going to all the other team owners and say, hey guys, when catfish hunter becomes a free agent, don't bid. And, you know, that's illegal. But publishing a paper saying people are bidding too much and the more bidders there are, the less you should bid. That's perfectly legal and useful. Now, it turns out that there's a funny story about this, which is the version of this book that Winters Curse that I published in 1992, the editor who bought that went to Princeton University Press. And then when Nudge came along there was an auction for the rights to bid it.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“That was their solution. We're outed on that. No, their solution was to write a paper. Think about it, you know. So they made”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“On these things. That's a great question. So, all right, it's 1970 or something, whenever they published that paper, they get this finding, what should they do? One would be not to go into some other line of business. Another would be to bid less, but then they're not going to win very many auctions. They came up with a pretty clever solution.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Bid too much. Now, this concept was not discovered by psychologists. It was discovered by engineers at Arco, an oil company. There were bidding for leases in what I'm going to insist on continuing to call the Gulf of Mexico. And what they discovered was the leases that they won had less oil than the engineers and geologists had told them would be there. And they said, gee, that's weird because we thought we had great geologists. And what's the problem? And the problem they figured out was very subtle, which is That the auctions you win are not a random sample of the auctions you bid in. They're the ones where you're the highest bidder. And if you're the highest bidder, there's a good chance that...”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“They win Right, so that experience you can tell people this abstract concept of something called a winner's curse they won't even remember what it means because it's got a weird name. It doesn't have anything to do with cursing or witches, but they remember, oh yeah, that guy who bid a lie too much.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, the professor always makes money because you have this jar. It's worth $75. There will be somebody that will bid $100 or $150. And they win.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. In fact, you can juice delu beans or whatever, paper clips. So, what do you find in that? You always make money on this.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“So, I do hear from people who took a class from me at Cornell 40 years ago, which is very gratifying. I'm glad that they even remember that they had such a class. What do they remember? They remember stories. That is the only thing people remember. They do not remember a formula. They don't remember some abstract concept. They remember a story or they remember a demonstration. Take the concept of the winner's curse. This is an obvious move on my part since I have a new book that's called The Winner's Curse. But let's talk about the Winners Curse because it's a great example. Winner's Curse, The way you do this in a class is you bring in a jar of coins and you say, I'm going to auction this off. You get the money in the jar.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“So, first thing I will say is nobody thinks they need a class in decision making. Because they're great at decision making. Why would they need a class in that? Do I need a class in breathing? Although you're going to tell me, actually, you don't know how to breathe right then.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“So they're making it easy, right? They've made it easy to bet. It used to be I had to go find a bookie. Now you open your phone and you can bet on the game that you're watching. And that's very tempting. So the principles of understanding the customer. And then designing the product can be used for good or evil. And I take no responsibility for somebody optimizing an online gambling app to make it as attractive as possible for people to lose all their money. Don't blame me. But that's what's going to happen in a competitive market with consumers who are humans.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Right And now we have online gambling. And within game gambling, and we have places like Robin Hood that have made investing feel a lot like the scene of gambling.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“You want to ask, you want people to do more of that why are you making it hard for them to do it? That's the answer. But where I was going with that was the same principles can be used to harm people. So if you go into a casino, the whole casino has been designed to get people to bet as much as possible and to bet on things that”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, sure. We always say we didn't invent nudging. Adam and Eve, then the serpent, right? There was the apple. So human nature has been there all along. Hucksters have existed forever. Charles Ponzi didn't read our book. Didn't read any of my papers. Neither did Bernie Mandoff. So, when we wrote Nudge, it was saying, look, here are some basic principles of human behavior. Can we use those to help people make better decisions?”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Keep it simple as a formula that always works and getting your attention always works, but it won't be the same thing that will keep getting your attention.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“I don't know, but I think the fly in the urinal probably won't have any effect in the toilet you use at your place of work where you see it several times a day or whatever. But for the pension thing, if we only have to get you to sign up once, that's enough. So yes, attention, it may be that we have to do something different to get your attention this time, but there's a rule which is if you want people to do something, make it easy. That's a rule that's always true. And the more complicated you make things, the less people are going to do it. So, you know, I think that's pretty much automatic. In terms of capturing attention, that's what the business of advertising is constantly trying to do. And clickbait ads on social media, they're all in the business of...”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“And so you're just instinctively tap the brake and then don't wipe out your car. That's good, right? Now those lines, they keep repainting them.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Know there's a good example of a nudge of that sort here in Chicago when Nick and I drive back home. We're going to go on Lakeshore Drive and there's a Bendy part. It's beautiful road and a lot of people wipe out around these bends. You really can't go more than about 30 and it's a six lane road so people think they can go fast. So what somebody did around the time we wrote that book a little before is they painted lines on the road that get closer and closer together. That gives the illusion that you're speeding up.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“But the first company that did that. New employees now joined 90% instead of 50%. So I wrote a book called Nudge, and that's an example of a nudge.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“And what we noticed is in a lot of companies only half of new workers would sign up within the first year. So, how can we fix that? Well, remember we talked about status quo bias. So here's a simple way. The way it worked at that time was in order to join, you have to fill out a form. Choose some investments and then sign. And this was a piece of paper at the time. So how about if we just change the form and say, there's this plan, we're going to put you in unless you fill out a form saying you don't want it. Again, economic theory says that won't make any difference. Everybody's going to join. And certainly just filling out a piece of paper. It's not enough friction to change things. Yeah, I mean, we're giving you six thousand dollars.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“When I started working in this area, one problem we noticed was lots of people weren't joining this savings plan, even though their employer was matching contributions dollar for dollar up to, say, 6% of their salary. So that's like the stupidest thing you could ever do. You're making $100,000. They'll say, I'm going to give you $6,000 as long as you save $6,000. Yeah, in a tax deferred. Yes, right.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“My father worked. He was an actuary, worked at a big insurance company. He had the pension that was prevalent at that time, defined benefit pension plan, the old-fashioned kind, where how much you got in your pension just depended on how long you worked and what your final salary was. No decisions. And we gradually started shifting over to the new 401k type that's called Defined Contribution, meaning you put money in and invested and then you get what you have at the end.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“And so the important lesson is that if you're doing business in the real world and you have customers and employees that are people, not agents, then you have to do things a bit differently. That's like the one sentence summary of Behavioral Comics.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Right, it might be the guys that are in that Uber for five grand, but even they are going to be a little pissed. But more importantly to Uber, if they did that, the thing is, at the time, when they would have these surges like of 10x, they were not making any money off of that. It would be fleeting. So they'd make a little bit of money just like if Nick had sold one dinner reservation for 10 grand yeah, he'd make 10 grand, he'd have thousands of people writing articles. So Uber was making a little bit of money and pissing off millions of people. And that was dumb in a business where they had to fight city by city to get permission to take people to the airport.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, the Yeah, so surge pricing, I thought at the time that there's nothing wrong with surge pricing, but you have to put a limit on it. And the example I gave, I tried to convince the owner of Uber of this. I said, suppose Uber existed on 9-11. And you had Ubers charge $5,000 to drive people back to Greenwich. How many days would Uber still be in business? Minutes. You can't do that.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“But any of them, any of these other experiments, except this one, Unfairness, the business school students are different from the idiots because they think, of course you should raise the price of snow shovels after a blizzard. We learned that in micro.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so you went back and said, Yeah, but they might not come back. And the questions that we asked in this paper were scenarios like there's a hardware store that's been selling snow shovels for $20, and there's a blizzard and they raise the price to $30. Is that fair? And people say, no. You know, but there's one exception. You know there's a group that say absolutely yes. And that's business school students. So I teach a class in decision making and each week I show them, look, here's the data from some experiment. You think these people are idiots. But look, you do it the same. So they may be idiots, but so are you.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Well, no, you've been maximizing your profit. Right. Right. And there is some rich guy who will pay two thousand dollars for sure.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Interesting concept. You know, the Northwestern economists that were dumping on Nick thought that what he really should do is just auction off the tables at 7.30 on Saturday night for whatever price he could get.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Well, it means there's much less trading and much less change than we would expect because we hold on to the stuff that we have because we don't like giving it up. But when there's a big fire like they had in LA last year, people are going to have to decide, all right now, they don't have the option of moving into the old house. What are they going to do? There's a lot of discussion these days about how hard it is to build in the United States. And we've set up rules, well-intentioned rules to make the environment safer and clean air is good. I think almost everybody thinks clean air is good, but it shouldn't. Make it five times as expensive to build a road as it would otherwise be. So partly because of loss aversion, there's something that we call status quo bias.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“And now the mugs are assigned at random. People have had this mug for 30 seconds. It's not their grandma's mug. It's been in their possession for 30 seconds. And what do you find? Well, the people who have a mug demand twice as much to give it up than the ones who don't have a mug are willing to pay to get it.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Choose to be in that experiment for a million. So, okay, so that's buying and selling prices are wildly different. Now, how do we get that down to something more real? You asked about an experiment. There's a famous experiment I did with my friend and mentor Dani Conneman and our friend Jack Knitch. And the way it works is very simple. We go into a classroom and we did some of these at Cornell. We would go and put a Cornell coffee mug of the sort you can get at any campus bookstore. We put it on every other desk. And then we say, all right, if you have a mug. We ask you of each of the following prices are you willing to sell? Start at $10 a good. And if you don't have a mug, you get the same form and say at each of the following prices are you willing to buy?”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Question was over at the med school, we're studying that same disease. We'd like to know how much you would have to pay you to expose yourself to a $1 in a thousand chance of getting that disease. And there's no cure here. Now, economic theory says the answers to those two questions have to be the same. So, the amount I'm willing to pay to get rid of it, or the amount have to be paid to do it should be approximately the same. There are no worse near the same, so people would say, oh, I'd pay a thousand dollars to get that cure. I wouldn't do that experiment for a million dollars. Now, they're lying because they drive. Yeah, they do all sorts of things, yes.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Because I think they're kind of fun too. Let's talk about loss aversion. Here's the first survey I ever. My thesis, which was a very traditional bit of economics, although on a kind of exotic topic, it was on the value of saving lives. So if we make a highway safer and we save 10 lives a year, how much should we be willing to pay for that? And I decided it might be interesting to ask people a question. So I ask people suppose by attending this lecture today, you've been exposed to a one in a thousand risk of dying. You have this disease and there's one in a thousand chance you're going to die quick and painless death next week. But I have a cure here that I can sell. How much would you pay for it? That was one question.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“You know, I have an electric car, even I'm aware of the price of gas because it's posted in those big signs. So we know kind of the level. Do we have real forecasts about the future? No.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“So the second thing is, and it's sort of another version of the same thing, which is if we're trying to describe behavior, whose behavior is it? So, you know, there's a lot of discussion in, say, monetary policy about expectations. The Fed will say, we have to change interest rates because we're worried that if prices go up, people will expect them to go up further. I'm always asking my friends who are in that field whose expectations are they talking about. If it's the guy walking down Michigan Avenue, they have no expectations about inflation. They may have impressions of what's going on now. Like, oh, meet Thai now. Eggs are high, right? Gasoline”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT
“Two things here one is He talked about this expert billiards player, I pointed out in this article, you know, we actually study regular people, not experts. So you're a pretty good golfer. I'm a mediocre golfer. Neither of us play like Tiger Woods. So even though you're a pretty good golfer, we wouldn't want to predict the way you're going to hit a shot by saying, what would Tiger do? So that was my first point about the billiards player let's just go to a bar and try to predict what this guy is going to do. Is the model going to be the one that is optimizing or is it the model of the regular guy at a bar? And if we're studying investors, they're not Warren Buffett. They're pretty far from Warren Buffett.”
2025-10-10 · The Tim Ferriss Show · #830: Nick Kokonas and Richard Thaler, Nobel Prize Laureate — Realistic Economics, Avoiding The Winner’s Curse, Using Temptation Bundling, and Going Against the Establishment · IDENTIFIED FROM THE TRANSCRIPT