Professor of Behavioral Science and Economics,
@CDR_Booth
,
@ChicagoBooth
Co-author of Nudge:The Final edition, author of Misbehaving. Slayer of
#sludge
I was so lucky to be able to have Danny Kahneman as a best friend and collaborator for decades. He usually ended our conversations with "to be continued..." but I now have to simulate his part which is impossible. My favorite image of us "working".
The work that won today's Nobel in medicine (and saved millions of lives) "was summarily rejected by the journals Nature and Science". Keep trying. Journals are often resistant to new ideas.
We’re going to cancel every penny of student debt, and we’re going to pay for it with a modest tax on Wall Street.
Wall Street doesn’t like that, but to hell with Wall Street.
I could decorate an entire house with such letters. Keep fighting and improve your pitch! Also, I have found that the outlet is not as important as most think. Good papers get discovered.
This is the rejection letter for the work that just won the Nobel Prize. I read that
@R_Thaler
work who won him Nobel prize was also rejected by reviewers but the editor was smart enough to go against the referees decision and publish it any way.
#AcademicTwitter
@NobelPrize
Bankers: you could all benefit from some reputation-enhancing actions. May I suggest one? Give all furloughed government workers a grace period on mortgage, credit card and other debt payments until paychecks are received. And make applying *easy*.
Do you know who can stop the government shutdown? TSA. Just close the PRE lines at DCA (Reagan Airport) used my most Members of Congress. Do that and the shutdown is history.
The only 4am wake-up call that ever made me happy. But that coffee was badly needed! As you can see, it was a glorious day in Chicago. Will always be grateful to the Humans who made it possible.
"I discovered the presence of human life in a place where economists thought it did not exist: the economy.”
Happy birthday to Richard Thaler, who was awarded the 2017 Prize in Economic Sciences.
Learn more about Thaler:
I applaud that editor. I believe there is a bias in editorial decisions in econ journals in favor of papers that “look hard” to produce. Degree of difficulty should be used to judge gymnastics and figure skating, not scientific contributions.
I recently shared an experience I had with a journal and was encouraged to share the decision letter more broadly. For the youngens who still get frustrated, this same paper was rejected by the QJE (a more appropriate "home" given the style.) It's always a lottery!
In 2012 Australian researchers found that the ‘ugliest colour’ is a greeny-brown colour called Pantone 448C. It is now used on all packaging for tobacco products in the country.
This photo was taken on one of the numerous breaks between takes. (It took an entire day to shoot our two minute scene.) Unlike me, she could learn lines, but I don't think she had ever met anyone as old as me. Still waiting for a call to do Only Murders...
My view: consumer finance is more useful than trigonometry but teaching it in high school will have little effect on later behavior. How much do you remember about your high school chemistry class? Does it help your cooking?
Found a set of notes from a class I took from Amos Tversky at Stanford in fall 1977. Here is a gem: Instead of trying to correct our intuitions, maybe we should just identify classes of illusions and should learn to correct the bias without changing the underlying impression.
A nice collection of thoughts by some of the many people who got to know Danny Kahneman over the years.
Remembering Daniel Kahneman: A Mosaic of Memories and Lessons via
@behscientist
Deeply saddened to report that Anne Treisman, Danny Kahnenan's wife, passed away after a long illness. Anne was a great scientist, a mother of four, and a role model for many. She will be missed but not forgotten.
New Zealand's Prime Minister Jacinda Ardern says she's confident the country has halted the spread of the coronavirus after the last known infected person in the country recovered. It has been 17 days since the last new case was reported there.
Yes people LOVE refunds. Average has been about $2700. That is a *choice*. The decision to reduce withholding to provide immediate but unnoticeable increases in take home pay was behaviorally uninformed. $10/week not noticed. $500 lower refund is.
Feels like there's a good behavioral finance lesson in the degree to which people like to get tax refunds, even if technically it means they were floating a no interest loan to the government.
Something the NRA likes to ignore. A gun in the home is much less likely to protect your family than it is to cause one of them to die, by accident or suicide. (Quite obviously, the same would be true for guns in schools.)
More guns, more suicide.
@ATabarrok
and Briggs studied the effect of gun ownership on suicides using state level panel data and a variety of techniques (IV, panel). They find a strong robust positive causal effect of guns on suicides.
Congratulations to Banerjee Duflo and Kremer on the Nobel and to the committee for making a prize that seemed inevitable happen sooner rather than later. (I happen to be in London so I am awake.)
On virtually every issue that divides R's and D's I can see the merits of each side. Except one: voter suppression. Voting should be as easy as possible. There can be no excuse for long lines and one dropbox per county. Universal vote by mail, and soon email should be the law.
Breaking news: Based on his negotiation skills Trump has been hired as GM of the Warriors. He already traded Curry and Durant to the Celtics for three leprechauns and a promise that the Warriors would no longer hold practices.
Hey
@amazon
is running an interesting BE experiment. They added Misbehaving to its list of books available *FREE* on Kindle Unlimited. First book is free and they promise easy quit (then $9.99/mo). So an arbitrage opportunity if you remember to quit. Reading the book might help.
The University of Chicago is rightly proud of its record of Economic Nobel winners. A warm welcome to
@paulromer
to that list. B.A., M.A. PhD and faculty member! Paul your picture will be right next to mine which makes me happy. Congrats to Bill Nordhaus as well. Great prize.
This paper has a terrific start: "Science is curiously asymmetric. New ideas are meticulously tested using data, statistics, and formal models. Yet those ideas originate in a notably less meticulous process involving intuition, inspiration, and creativity."
Wonderful news about Claudia Goldin’s selection as this year’s Nobel in economics. She is a true professional whose work has really helped us understand how the labor market for women works. 👏👏👏👏
One of the most annoying comments in the economics literature is that if you raise the stakes then people get smarter. No. Behavioral Finance is a high stakes paradigm
I would guess that allowing the IRS to send people a pre-populated taxreturn that they could submit by checking a box would have one of the highest benefit cost ratios in history. Why do we allow Intuit to block this? You don't trust the IRS but you trust Turbotax not to upsell?
One of the themes of the new Final Edition of Nudge is that every problem can be helped with nudges, but few can be solved only by nudges. That is true of climate change, and Covid vaccinations. My thoughts here:
Gene has it all wrong. If it were not for Behavioral Finance he and French would have had nothing to do for the past 25 years. He owes me everything. At least he is generous with gimme's.
This finding confirms Mischel's earlier claim that there are not stable traits. I can easily resist marshmallows but have a weakness for fine wine. Lesson for economists: don't think people can be labeled as risk loving or patient: behavior depends on the situation not person.
Agree. Unconditional student loan relief? Why? Grants to investment bankers, corporate lawyers and surgeons? No grant to someone who paid off the loan or saved up to go to school? Not to small biz owners trying to keep workers employed?
Student loan debt forgiveness likely has a multiplier close to zero.
Forgiveness is taxable. If this negative cash flow effect outweighs interest savings would even be net negative. And wealth effect small in short run.
Arbitrary/regressive $1T for ~$0 GDP, not a great idea.
Proposal: devote one month of every year of high school and college to teaching probabilistic thinking (including Bayes’ Rule) tho no need to call it that or show a formula! Tables like this do nicely.
I do not understand why paying off student loans is a hot button progressive issue. Why those loans as opposed to (say) credit cards, payday, auto, mortgage, etc?
Interesting to see economists' beliefs changing over time. I don't think that this is much about ideology. I was around in 1978 and would have responded the same way. Card and Krueger was a game changer, with follow-ups by
@lkatz42
and others. Data changes minds (with a lag).
Thanks! My donation of this mug, the last one I had from the original experiment with Kahneman and Knetsch, might be evidence against the endowment effect, but I thought it was the perfect gift.
Disagree. On line learning has been around for a long time and did not take over. There is a reason why TED talks are short. Keeping students attention on a screen for 2-3 hours is VERY hard. In person is key. Local theater is fine. Home movies, not so much.
Business firms take note: this is the way to play the long game. It is the opposite of surge pricing. Make it free when people need it most and they will come back later.
To our readers: we've taken down our paywall -- and will continue to do so -- on major breaking news coverage of today's shooting at Tree of Life Congregation.
@R_Thaler
Thought you might like this, and it's for a good cause. I was about to donate to Wikipedia, but then the 1% figure nudged me in the wrong direction!! I just hope this is part of an elaborate A/B test
Watching the Dodgers/Red Sox final innings. It is amazing how a manager takes out a pitcher who is loose & dominating through almost 7 innings, Rich Hill of Dodgers, and brings in nervous reliever(s) who get shellacked. 4 run lead gone. Managers do it all the time, big mistake!
No Luis. The original marshmallow tests were about how kids cope with temptation. Those are solid. (It helps if you can't see the treat). Much later Mischel and others looked at whether kids who could wait longer at 4yo did better in life. Those findings are suspect. But ...
When non-economists define behavioral economics they leave out foundational papers like this one which has the admirable goal of making economic theory more behavioral. NB: not written for lay readers.
Optimal Taxation With Behavioral Agents - a magnificent 2020 paper by the late Emmanuel Farhi and Xavier Gabaix (one of the most important behavioral economics papers in recent years, I think).
@jasonfurman
@R_Thaler
My tweet is being mis-interpreted. Foolish of me to weigh in on a debate taking place in Spanish. The right number of options depends on the circumstances. You want Amazon to sell every book but retirement plans should not offer every fund. I do not know enough to say more.
The last thing we need now is evictions. Bad for tenants and landlords. We got some lawyers to help write a short-term fix. Especially important for small businesses who employ lots of workers. Let’s prevent this unforced error.
Did you know that in Sweden most people can file their tax return by text message?
Tax prep firms have prevented that from happening here but this new effort is a good first step. If eligible, try it and give feedback! Danny Werfel wants to make this work and you can help.
The entire IRS team is really excited because for the first time ever, 19 million taxpayers across 12 states can file their taxes online for free direct with the IRS through our new IRS Direct File program.
-
#IRS
Commissioner Danny Werfel
Breaking News: Dick's Sporting Goods, one of the U.S.'s largest sports retailers, will stop selling assault-style rifles and require gun buyers to be 21
Finance question that has nothing to do with whether Apple is too big. Is there a good explanation for why they would want to hold so much cash? I know some is "overseas" but isn't money fungible? And if something comes up, they can borrow at near 0%. Not a loaded question.
Do you know who can stop the government shutdown? TSA. Just close the PRE lines at DCA (Reagan Airport) used my most Members of Congress. Do that and the shutdown is history.
The Trump administration’s ideas of how to help the economy now include a capital gains tax holiday and new deductions for dining and entertainment. Where are the subsidies for golf balls, old Bordeaux and Rolex watches? Can anyone justify interventions aimed directly the 1%?
Love this solution to ordering the names of authors in economics, where alphabetical is the norm. Special symbol indicating certified randomization. Now endorsed by
@AEAjournals
Nudge of the day: camera-mirror combination that identifies maskless people. Installed at bus stops in Trabzon, Turkey. Mask-wearing is up, riders happy, no complaints.
@CassSunstein
@R_Thaler
When you donate blood in Sweden, they send you an SMS when it has been given to someone, thanking you and informing you of the fact.
That is a brilliant hack for making people doing it again and again.
@rorysutherland
Just waking in Hong Kong to this dreadful news. A great man, friend, economist, and public servant. I exchanged emails with him last week, gladly providing a blurb for his forthcoming book, Rockonomics. In shock.
President Obama's remarks on the passing of his friend and adviser, Alan Krueger.
"He saw economic policy not as a matter of abstract theories, but as a way to make people's lives better. He believed that facts, reason, and evidence could make government more responsive..."
When I don’t finish all my delicious food, my waiter approves of my (rare) self control and then kindly explains the concept of sunk costs to me. Quotes his wise mom: “waste not waist”. (Spelling assumed.)