Richard Thaler
The Behavioralizing of Economics
Richard Thaler
The Behavioralizing of Economics
Economist Richard Thaler visited Google's office in Cambridge, MA to discuss the topic "The Behaviorializing of Economics: Why Did It Take So Long?". The talk is an introduction to his book "Misbehaving". He points out that economic models are based on ideal entities he calls "econs". But maybe economic choices are made by entities we might call "humans".
Why are we more likely to forgo the opportunity to sell a £100 bottle of wine rather than actually taking money out our wallet to pay for it, when ultimately the 'opportunity cost' of doing so is the same? Why would the 'endowment effect' mean that we value a free ticket worth hundreds of pounds more than the money we would get from selling it?
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