Irrational Humans: How Our Behaviour Shapes the Economy (Professor Richard Thaler)

How do human choices, biases, and behaviours shape our economy?
This week Amol speaks to Nobel Prize winning behavioural
economist Professor Richard Thaler about his theories that dive
into the patterns behind our decision-making and reveal why
humans aren’t always as rational as we like to think.


From overconfidence and the lure of winning at any cost, to the
hidden costs of risk-taking and the psychology of incentives, his
research shows why individuals and markets sometimes make
surprising — or even seemingly irrational — choices.


By unpacking the experiments described in his book The Winner’s
Curse we get an insight into his work and he applies these
behavioural insights to the issues facing the UK today. They
discuss how to get young people off welfare and into work,
government debt and why Richard believes the winter fuel
allowance needs a rethink.


(00:04:10) Why he thinks traditional economic theory is flawed


(00:07:44) The pros and cons of behavioural economics


(00:17:40) The story behind The Winner’s Curse


(00:19:00) The Endowment Effect


(00:21:16) The Ultimatum Game


(00:23:28) Confirmation Bias and Overconfidence


(00:25:54) Mental Accounting


(00:29:42) Young people, welfare and work


(00:33:35) Tackling government debt


(00:38:32) The housing crisis


(00:40:06) The rise of AI and dangers of social media


(00:43:00) How he found out that he’d won the Nobel Prize for
Economics


(00:45:26) Richard Thaler’s legacy


(00:47:43) Amol’s reflections


(00:51:20) Listener Messages


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Episodes of Radical with Amol Rajan are released every Thursday
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Amol Rajan is a presenter of the Today programme on BBC Radio 4.
He is also the host of University Challenge on BBC One. Before
that, Amol was media editor at the BBC and editor at The
Independent.


Radical with Amol Rajan is a Today Podcast. It was made by Lewis
Vickers with Anna Budd. Digital production was by Gabriel
Purcell-Davis. Technical production was by Dave O’Neill. The
editor is Sam Bonham. The executive producer is Owenna Griffiths.