Richard Thaler Interview
In the past month I have posted several articles about Richard Thaler. Today, on the Tom Peters blog, I found a new interview with Richard Thaler. Tom Peters is the author of many classics, including “In search of Excellence” and “Reimagine”.
Richard Thaler Introduction:
“Thaler is considered by many to be the inventor of the field of behavioral economics, which integrated psychological research with economic theory. The author of numerous academic articles, Thaler has written on a wide variety of subjects, from savings and investing to marketing, decision making, and financial markets. Recent papers have included an investigation of contestant behavior on the popular game show Deal or No Deal, and an analysis of the National Football League draft.”
Excerpt from Interview
Tom Peters: Why do we make bad decisions?
RT: Well, we’re humans, and we’re busy. Life is complicated, and getting more complicated. We mentioned the term behavioral economics and people might wonder what that is. It’s a field that only exists because regular economics is based on an idealized economic agent, sometimes called Homo Economicus. In the book we refer to such creatures as Econs. Econs are creatures that can calculate like a super computer, never get tempted by fatty or sweet foods, never get distracted, and probably aren’t a whole lot of fun to be around. [Laughter]
In contrast, real people, who in the book we call humans, don’t make any appearance in standard economics. Behavioral economics is economics about humans. Humans are busy, can’t solve every problem instantaneously, and get tempted by luscious desserts. Sometimes they need some help.