YouSaid · the spoken record

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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“Look, it was the winning argument. When I started on this In fact, in my first paper, which was published in nineteen eighty, my first behavioral economics paper It ends with a long response to Milton Friedman's as if he talks about a billiards player. Expert billiards player, I should point out that he talks about. He says he may not know physics or trigonometry, but he acts as if he did.”
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
“As if remember those magic That was, you know, they don't have to know how to do a present value, but they're acting as if they knew.”
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 one of my economist friends was there, and he had to assure them that I wasn't making this up and that this wasn't a caricature of economic theory. No, there are economists one floor up from here who actually believe this is the way people behave.”
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, I can tell you while I was living through that. The emperor has no clothes, was a recurring thought. Why am I seeing that and no one else does? And no one else was just economists. So I remember giving a talk in the psychology department at Cornell where I was teaching. I was talking about this theory of how people save and the audience just starts laughing.”
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
“Unless the money is taken from their paycheck and put into a retirement plan. Now, economic theory would say it doesn't matter. People are going to save the right amount. There have been two Nobel Prizes for theories that basically say people save the right amount. They take their income and they decide, okay, I'd like this consumption path over my lifetime. And now how much do I have to save to get that? And then I keep re-optimizing market goes up. I can save a little less. I mean, that seems so obviously.”
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, there are two parts to it. One is can you show that people are really doing that? And then second, can you create rigorous models That describe that behavior. And I think we might as well stick to the demonstration part so we can go from that the cashew story and say, well, what does that have to do with the real world? And we can talk about retirement saving. As a first principle, Americans don't save”
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, I removed choice. And then because this is a group of economists, they start analyzing it. There's a rule of thumb. You don't want too many economists at any dinner party. And this is a good example of it. So somebody mentions that, well, we're actually not allowed to be happy about that because more options is always better. And we used to have the option to have eaten us and now we don't. Well, you can imagine. But the principle, the discussion wasn't that interesting, but the principle is interesting that sometimes we prefer not to have options. And so I started with this list of stuff like that. And then the work comes into, all right, well, how can you go beyond a story? So yeah, that's an amusing story. But so what?”
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, I guess this is like in grad school. So there's a story I tell about a dinner party with some other economics graduate students and there's some roast in the oven that smells great and there's some adult beverages and I bring out a bowl of cashew nuts and people start nibbling as they do. And at some point I realized that their appetite was in danger. And so I grabbed the bowl of cashew nuts and went and hid them in the kitchen And then I came back into the living room, and people thanked me. Oh, thank God you got rid of those nuts. We were going to eat 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
“Had this defense, it would say, look, I just want a model that people are behaving as if they were maximizing. So he would say it doesn't matter if they literally know how to do it, if their behavior is close enough. And so the real debate over my career has been about that 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
“I would say sure supply and demand still works. All the economics starts with supply and demand. If you raise the price, you're going to sell less, almost always. And when you write down these more formal models and make more precise predictions, Then the question is, are you adding predictive power through that? And I think what happened is we're starting in the 50s. And I would say rationality peaked in the 90s maybe, where this norm that a model with really, really, really smart people is the best possible model. Eventually people start to realize, well, maybe there's some drawbacks to that. But you can argue, and of course I've spent my career arguing about how wrong this is, the Great Chicago economist Milton Friedman.”
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've optimized my marriage. It's perfect. And in fact, our wives would be happy to testify. Yes. We've done a wonderful job. We're both perfect, really. We couldn't be.”
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 you wouldn't have sold half as many books, Tim. If people were those agents, and you know, even other kinds of things you're interested in, implicitly in this idea that the agents are maximizing means they don't need any advice. They're doing it right. You know, they're getting the labor leisure trade-off right. They don't need any help in getting along with their spouse because they're...”
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 got to get the rocket up. And then I'll mention a third thing, which is these agents don't have any self-control problems. So they eat just the right amount, they exercise just the right amount. We wouldn't need these new fat drugs because people would already be optimizing for the health. It would be perfectly fit”
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
“We might care about fairness. Right. I'm sure we're going to have a discussion about fairness. And we might care about being treated fairly. So that was left out of the model. Again, because it seemed like a simplifying assumption to just start out.”
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 they're doing something else, taking the Then what? So that's principle number one. Principle number two is economists, again, for simplicity have assumed that people are selfish. And, you know, most of us care more about ourselves than anybody else. Maybe our family, some family members, you know. But we give money to charity. You know, NPR collects money.”
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
“It means to solve the problem the way an economist would. I don't mean that economists think that they're the smartest. But if it's an economic problem. Like, how to adjust your thermostat so you're comfortable and spend the least money, that's a little practical economic problem. An economist and an engineer might solve it. And knowing you, Nick, you could easily get absorbed with figuring out how to really do it. But most people can't figure out how to use that easy using thermostat in their house, much less solvent themselves. So people will take shortcuts. My joke is instead of writing down Max, suppose we wrote down Met. Because what people are doing isn't really Max, right? You know, I'll do something. So where I come in on that part of the story is, okay, if people Not capable or interested in solving”
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
“Economics starts with Adam Smith. And it's that way about until 1950. Then we start having math. Now we have an equation that says exactly what a smart person is going to do. And so the agents in these models are getting smarter and smarter because the norm is my model is better than your model if my agents are smarter than your agents.”
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
“More fundamentally, well, what they're modeling is whatever you do. So what route do you take to drive from home to the golf course? The best route. Which home do you choose to buy? The best one. What mortgage do you choose? The best one? Look, economists are jealous of physics. And they're jealous of physicists. Many economists started out in school as a math major or physics major or engineering major and then decided, oh, this is too hard. But they kind of admire that. So they want a model that's as accurate as the model you use to send up a rocket. The problem is that That problem is solvable. How much stuff do you need to get a rocket to go up there? That's a solvable problem. Figuring out what people do. You know, if you open a book in economics textbook, you actually don't see the word people. See the word agents.”
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 think that's actually a great place to start, and especially it's not really possible to talk about what behavioral economics is without understanding what economics is. And economics is really two things. It's people interacting in markets, and then what are those people doing? And what happened is... Sometime right after World War two, economists started getting interested in making their models more rigorous and more mathematical. And the easiest model to write down of what somebody's doing To write down the model in which they're doing it perfectly. So if you open up any economics textbook, You'll see the three letters max. And that's short from maximize. and all models start with that so we assume that when Nick goes to the grocery store what he chooses is the best things he could choose”
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