Misbehaving: The Making of Behavioral Economics | Richard Thaler | Talks at Google

Behavioral economist Richard Thaler explores the divergence between human behavior and the "Econ"—a rational, mythical creature central to traditional economic models. By analyzing anomalies such as the endowment effect, where individuals value items more highly simply because they possess them, Thaler demonstrates that human decision-making is often driven by psychological biases rather than pure utility maximization. The discussion highlights the practical application of these insights, specifically through "nudges" like automatic retirement plan enrollment and social norm-based tax collection, which improve outcomes without restricting choice. Thaler emphasizes that effective policy and organizational design must account for human fallibility, suggesting that the next frontier for the field lies in behavioral macroeconomics, a discipline that requires a deeper integration of realistic human behavior into broader economic systems.