Richard H. Thaler — The Winner’s Curse and Going Against the Establishment (with Nick Kokonas)

Richard H. Thaler is the 2017 recipient of the Nobel Memorial Prize in Economic Sciences for his contributions to behavioral economics and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. He is the New York Times bestselling co-author of Nudge: Improving Decisions About Health, Wealth, and Happiness and the author of Misbehaving: The Making of Behavioral Economics. His new book is The Winner's Curse: Behavioral Economics Anomalies, Then and Now. My co-host for this conversation is Nick Kokonas. Nick is an entrepreneur, investor, and author best known as the co-founder of The Alinea Group (sold in 2024) and the reservation platform Tock, which is now owned by American Express. This episode is brought to you by: Seed's DS-01® Daily Synbiotic broad spectrum 24-strain probiotic + prebiotic: https://Seed.com/Tim (Use code 25TIM for 25% off your first month's supply) ExpressVPN high-speed, secure, and anonymous VPN service: https://www.expressvpn.com/tim (get 4 months free on their annual plans) AG1 all-in-one nutritional supplement: https://DrinkAG1.com/Tim (1-year supply of Vitamin D plus 5 free AG1 travel packs with your first subscription purchase.) [00:00] Preview. [00:46] First principles: What is economics, really? [02:33] The “max” assumption and agents as optimizers. [04:45] Rationality in models: Solving problems like an economist would. [05:39] “Meh” vs “Max” — shortcuts instead of optimization. [06:12] Selfishness, fairness, and self-control in economic models. [08:08] Milton Friedman’s “as if” defense. [10:38] The cashew nuts story: Origin of behavioral economics. [12:05] Removing choice and status quo bias. [13:04] The case for Americans needing forced savings. [15:04] Academic resistance: Psychologists laughing at economic theory. [19:56] Loss aversion: Disease cure experiment. [22:18] Endowment effect: Coffee mug experiment. [24:05] Restaurant reservations and the power of deposits. [25:26] Fairness research: Snow shovels and blizzards. [27:11] Uber surge pricing and the 9/11 thought experiment. [28:53] Behavioral economics in one sentence. [29:16] Nudges: 401(k) auto-enrollment case study. [31:50] The fly in the urinal and nudge durability. [33:10] Lakeshore Drive lines: Making safety easy. [35:28] Choice architecture: Good nudges vs. malicious nudges. [36:37] Online gambling and Robinhood’s gamification. [38:20] Lessons learned from teaching decision-making for 40 years. [39:18] Winner’s curse: The jar of coins demonstration. [41:16] ARCO engineers discover the winner’s curse in oil bidding. [42:20] Writing papers as competitive strategy. [44:36] Amos Tversky’s note: People learn through stories. [45:44] Overconfidence: Amazon River and CFO predictions. [47:56] NFL draft: 53% success rate (barely better than coin flips). [49:08] Trading down in the draft as optimal strategy. [51:07] Applying behavioral insights to daily habits. [52:36] The law of one price and restaurant deposit resistance. [55:02] Sports analytics: The three-point shot revolution. [57:54] Mental accounting: Money in jeans feels like a windfall. [01:02:38] Sunk cost fallacy: The dessert we don’t need. [01:05:34] Richard’s daughter and the baseball/concert tickets experiment. [01:06:55] Temptation bundling: Using cognitive biases for self-improvement. [01:09:55] Big data and natural experiments in the real world. [01:10:40] Mental accounting in action: Premium gas during the financial crisis. [01:14:34] The pragmatic reason Richard invented behavioral economics. [01:16:30] Strategy: Corrupt the youth, not change old minds. [01:17:46] The behavioral economics summer camp running since 1994. [01:18:52] The “Anomalies” column in Journal of Economic Perspectives. [01:20:36] Citations matter: Writing articles people can understand. [01:21:09] Availability bias: Homicides vs. suicides. [01:22:21] Kahneman and Tversky: The reason for everything. [01:23:41] Systematic bias vs. random errors. [01:24:38] Amos’ dinner trap: Everyone you know is dumb, except your models. [01:27:38] Michael Lewis’ The Undoing Project. [01:28:25] Daniel Kahneman’s assisted suicide decision as peak-end rule applied to life itself. [01:35:31] What keeps Richard going? [01:37:00] Why the updated version of The Winner’s Curse should appeal to economists and everyday humans. [01:40:12] Parting thoughts. Sign up for "5-Bullet Friday" (Tim's free weekly email newsletter): https://go.tim.blog/5-bullet-friday-yt/ Follow the Tim Ferriss Podcast: https://tim.blog/podcast/ Visit the Tim Ferriss Blog: https://tim.blog/ Follow Tim Ferriss on Twitter: https://twitter.com/tferriss/ Follow Tim Ferriss on Instagram: https://www.instagram.com/timferriss/ Like Tim Ferriss on Facebook: https://www.facebook.com/TimFerriss/

Richard H. ThalerguestNick KokonashostTim Ferrisshost

Oct 14, 20251h 44mWatch on YouTube ↗

EPISODE INFO

Released: October 14, 2025
Duration: 1h 44m
Channel: Tim Ferriss
Watch on YouTube: ▶ Open ↗

EPISODE DESCRIPTION

Richard H. Thaler is the 2017 recipient of the Nobel Memorial Prize in Economic Sciences for his contributions to behavioral economics and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. He is the New York Times bestselling co-author of Nudge: Improving Decisions About Health, Wealth, and Happiness and the author of Misbehaving: The Making of Behavioral Economics. His new book is The Winner's Curse: Behavioral Economics Anomalies, Then and Now. My co-host for this conversation is Nick Kokonas. Nick is an entrepreneur, investor, and author best known as the co-founder of The Alinea Group (sold in 2024) and the reservation platform Tock, which is now owned by American Express. This episode is brought to you by: Seed's DS-01® Daily Synbiotic broad spectrum 24-strain probiotic + prebiotic: https://Seed.com/Tim (Use code 25TIM for 25% off your first month's supply) ExpressVPN high-speed, secure, and anonymous VPN service: https://www.expressvpn.com/tim (get 4 months free on their annual plans) AG1 all-in-one nutritional supplement: https://DrinkAG1.com/Tim (1-year supply of Vitamin D plus 5 free AG1 travel packs with your first subscription purchase.) [00:00] Preview. [00:46] First principles: What is economics, really? [02:33] The “max” assumption and agents as optimizers. [04:45] Rationality in models: Solving problems like an economist would. [05:39] “Meh” vs “Max” — shortcuts instead of optimization. [06:12] Selfishness, fairness, and self-control in economic models. [08:08] Milton Friedman’s “as if” defense. [10:38] The cashew nuts story: Origin of behavioral economics. [12:05] Removing choice and status quo bias. [13:04] The case for Americans needing forced savings. [15:04] Academic resistance: Psychologists laughing at economic theory. [19:56] Loss aversion: Disease cure experiment. [22:18] Endowment effect: Coffee mug experiment. [24:05] Restaurant reservations and the power of deposits. [25:26] Fairness research: Snow shovels and blizzards. [27:11] Uber surge pricing and the 9/11 thought experiment. [28:53] Behavioral economics in one sentence. [29:16] Nudges: 401(k) auto-enrollment case study. [31:50] The fly in the urinal and nudge durability. [33:10] Lakeshore Drive lines: Making safety easy. [35:28] Choice architecture: Good nudges vs. malicious nudges. [36:37] Online gambling and Robinhood’s gamification. [38:20] Lessons learned from teaching decision-making for 40 years. [39:18] Winner’s curse: The jar of coins demonstration. [41:16] ARCO engineers discover the winner’s curse in oil bidding. [42:20] Writing papers as competitive strategy. [44:36] Amos Tversky’s note: People learn through stories. [45:44] Overconfidence: Amazon River and CFO predictions. [47:56] NFL draft: 53% success rate (barely better than coin flips). [49:08] Trading down in the draft as optimal strategy. [51:07] Applying behavioral insights to daily habits. [52:36] The law of one price and restaurant deposit resistance. [55:02] Sports analytics: The three-point shot revolution. [57:54] Mental accounting: Money in jeans feels like a windfall. [01:02:38] Sunk cost fallacy: The dessert we don’t need. [01:05:34] Richard’s daughter and the baseball/concert tickets experiment. [01:06:55] Temptation bundling: Using cognitive biases for self-improvement. [01:09:55] Big data and natural experiments in the real world. [01:10:40] Mental accounting in action: Premium gas during the financial crisis. [01:14:34] The pragmatic reason Richard invented behavioral economics. [01:16:30] Strategy: Corrupt the youth, not change old minds. [01:17:46] The behavioral economics summer camp running since 1994. [01:18:52] The “Anomalies” column in Journal of Economic Perspectives. [01:20:36] Citations matter: Writing articles people can understand. [01:21:09] Availability bias: Homicides vs. suicides. [01:22:21] Kahneman and Tversky: The reason for everything. [01:23:41] Systematic bias vs. random errors. [01:24:38] Amos’ dinner trap: Everyone you know is dumb, except your models. [01:27:38] Michael Lewis’ The Undoing Project. [01:28:25] Daniel Kahneman’s assisted suicide decision as peak-end rule applied to life itself. [01:35:31] What keeps Richard going? [01:37:00] Why the updated version of The Winner’s Curse should appeal to economists and everyday humans. [01:40:12] Parting thoughts. Sign up for "5-Bullet Friday" (Tim's free weekly email newsletter): https://go.tim.blog/5-bullet-friday-yt/ Follow the Tim Ferriss Podcast: https://tim.blog/podcast/ Visit the Tim Ferriss Blog: https://tim.blog/ Follow Tim Ferriss on Twitter: https://twitter.com/tferriss/ Follow Tim Ferriss on Instagram: https://www.instagram.com/timferriss/ Like Tim Ferriss on Facebook: https://www.facebook.com/TimFerriss/

SPEAKERS

Richard H. Thaler
guest
Behavioral economist, author of Nudge and The Winner’s Curse, and Nobel Prize–winning pioneer of behavioral economics.
Nick Kokonas
host
Restaurateur and entrepreneur (Alinea Group) and founder of the reservation platform Tock, applying behavioral economics in hospitality.
Tim Ferriss
host
Author and podcaster (The Tim Ferriss Show) who interviews leading performers across business, science, and culture.

EPISODE SUMMARY

In this episode of Tim Ferriss, featuring Richard H. Thaler and Nick Kokonas, Richard H. Thaler — The Winner’s Curse and Going Against the Establishment (with Nick Kokonas) explores thaler explains behavioral economics: nudges, fairness, mental accounting, winner’s curse Richard H. Thaler contrasts traditional economics’ maximizing “agents” with real human behavior shaped by shortcuts, self-control problems, and concerns about fairness.

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