Behavioral Economist Richard Thaler: [Talks About How To] Make Mortgages Simpler

If my sources are correct Richard Thaler has landed a column on the New York Times. Congratulations Dr. Thaler. Here’s his latest/first piece on making mortgages simpler for real people.

Click Here To Read Richard Thaler’s Piece On Mortgage Simplification

Introduction (Via NYT)

This column is in praise of warning labels. So let’s begin with one: I am not your usual sort of economist. I practice what has come to be called behavioral economics. We behavioralists differ from our more traditional brethren in the way we characterize agents in the economy. Traditional economics is based on imaginary creatures sometimes referred to as “Homo economicus.” I call them Econs for short. Econs are amazingly smart and are free of emotion, distraction or self-control problems. Think Mr. Spock from “Star Trek.”

Excerpts (Via NYT)

Humans, however, can use a bit more help, especially when the options are hard to understand. Often, it is possible to help people make better choices without restricting their options at all. So shouldn’t it be a no-brainer to try? Some of the financial regulations recently proposed by the Obama administration provide a good example.

Real people are not Econs. Real people have trouble balancing their checkbooks, much less calculating how much they need to save for retirement; they sometimes binge on food, drink or high-definition televisions. They are more like Homer Simpson than Mr. Spock. Call them Homer economicus if you like, or just Humans. Behavioral economics is the study of Humans in markets.

Click Here To Read Richard Thaler’s Piece On Mortgage Simplification