Member-only story
The Behavioralizing of Economics- Why Did It Take So Long?
This is a story about how one really smart and down to earth guy (Richard Thaler) got together with a group of his friends and changed how economics is understood. Professors teach economics differently because of the truths they helped uncover and governments make policy that actually works because they were able to show the error of traditional economic models.
By helping to bridge the gap between psychology (the study of people) and economics (the study of financial markets) Thaler took a big risk, but ultimately he (and his friends) saved us all a lot of money, stress, and time.
This is my “non-expert” summary of the talk he gave at Google which he entitled The Behavioralizing of Economics- Why Did It Take So Long.
The key point of the talk is: how does behavioral economics differ from regular economics?
The buying and selling of anything (not just stocks- I’m talking milk at the store, jeans at the mall, and cryptocurrency online) is done by humans- so all economics should be considered behavioral economics… because all humans behave in some way- we aren’t robots. But, actually, traditional economics uses models that assume that we are robots. Not literally, but traditional economics does assert that…
