This week, I speak with Richard Thaler and Alex Imas award winning economists and co-authors of “The Winner’s Curse: Behavioral Economics Anomalies“. We discuss the psychology of spending at auctions, and the effects of draft picks on NFL team spending. We also discuss the anomalies of human behavior and decision making that challenge classical economic theories.
Thaler, a Nobel laureate and professor at the University of Chicago Booth School of Business, is widely known as one of the fathers of behavioral economcis. He explains how he popularized BeFi by “corrupting the youth” — the next generation of students who were more open-minded about the many anomalies and problems that the broad principles of Homo economicus failed to explain.
Alex Imas is also a professor at Booth; he wrote the paper ““Selling Fast and Buying Slow: Heuristics and Trading Performance of Institutional Investors.” A critique of active management that tries to answer the question “why do the majority of active managers underperform?” (See my prior discussion here and a chapter in “How Not to Invest.“)
A transcript of our conversation is available here Tuesday. If you would like to hear even more of these gentlemen, we had a conversation Live at the Economic Club of New York late last year.
You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business this weekend with Zach Buchwald, Chairman and Chief Executive Officer of Russell Investments. The global investment firm was founded in 1936, and today has ~$370 billion in AUM. Previously, he had a 15-year tenure at BlackRock, where he served as the head of its $2 trillion Institutional Business, leading the company’s Financial Institutions Group and helped establish its Retirement Solutions and Financial Markets Advisory platforms.
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