The flaws a Nobel Prize-winning economist wants you to know about yourself

Richard Thaler is a Nobel-Prize award winner for his work in the field of behavioral economics. He shares his insights into some of the behaviors we are engaging in that can sabotage our financial well being. His suggestions include not over valuing things, spending time to do your research and be willing to step out of your comfort zone. He fears these behaviors will become so normal that behavioral economics won’t improve them, so he suggests making changes now.

Reflect on these key points:

  • 1People don’t make rational economic decisions because of biases and flaws such as loss aversion and anchoring
  • 2People can be nudged to make smart long term decisions by removing short term decisions
  • 3Behavioral economics help us to understand why people make the decisions they do

“Thaler and Sunstein pioneered the idea of using nudges to create alternative courses of actions that promote good long-term decision making but maintain freedom of choice.”

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