NC State Ag Economist Dr. Mike Walden – “A Win for Behavioral Economics”


Mary:  This is Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program looks a win for behavioral economics.  Mike, the economist Robert Thaler is this year’s winner of the prestigious Nobel Prize in Economics.   What has been pathbreaking about Thaler’s work that lead to this accolade?

Mike:  Summary Answer

Thaler is one of the founders of what is called behavioral economics

  1. says people don’t always do careful analyses of costs and benefits of decisions
  2. rather, many decisions are based on rules of thumb or snap judgements
  3. for example, research has shown that selection of foods in a cafeteria based

more on what people see first rather than a comparison of all the options

  1. or in investments, people choose one that minimizes loss rather than maximizes

net return

  1. has led to policy recommendations – to get students to eat healthier foods, put

the healthy foods first

  1. or to encourage people to set up retirement accounts at work, make that option

what happens, and if don’t want to do it, must take action

  1. critics have argued these interfere with individual preferences
  2. I’m MW


Mary: And I’m Mary Walden for N C State Extension