{"id":156984,"date":"2026-01-30T20:49:06","date_gmt":"2026-01-30T20:49:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/156984\/"},"modified":"2026-01-30T20:49:06","modified_gmt":"2026-01-30T20:49:06","slug":"the-winners-curse-revisited-nobelist-richard-thaler-unpacks-new-book-with-leading-uc-berkeley-behavioral-economists-haas-news","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/156984\/","title":{"rendered":"The ‘winner’s curse’ revisited: Nobelist Richard Thaler unpacks new book with leading UC Berkeley behavioral economists – Haas News"},"content":{"rendered":"

Republished from UC Berkeley Economics<\/a><\/p>\n

\"\"Nobel laureate Richard Thaler interviewed by professors Ulrike Malmendier and Stefano DellaVigna (Photo by Hagit Caspi)<\/p>\n

When Richard Thaler\u2019s 1992 book The Winner\u2019s Curse<\/a> landed on Ulrike Malmendier\u2019s desk as a Harvard graduate student, it felt like permission to question everything. She\u2019d arrived well-trained in mechanism design and contract theory, fascinated by elegant models of rational optimization. But something nagged at her: the humans in economic theory bore no resemblance to the humans everywhere else\u2014the ones in courtrooms fighting over mistakes, getting emotional about decisions, behaving nothing like perfectly rational optimizers.<\/p>\n

\u201cI still remember sitting in Littauer Library,\u201d Malmendier told a Berkeley audience, \u201cand Stefano sliding over the original Winner\u2019s Curse\u2014this book collecting tons of fascinating stories about humans behaving exactly as I knew them from the real world.\u201d<\/p>\n

That book helped launch a revolution. Thaler\u2014who won the 2017 Nobel Prize for his contributions to behavioral economics\u2014joined Malmendier, faculty director of the O\u2019Donnell Center for Behavioral Economics<\/a> at UC Berkeley\u2019s Haas School of Business, and Stefano DellaVigna, chair of UC Berkeley\u2019s Department of Economics, for a conversation at UC Berkeley Haas this week. Jointly hosted by the O\u2019Donnell Center for Behavioral Economics and the Department of Economics, the discussion focused on Thaler\u2019s newly published The Winner\u2019s Curse: Behavioral Economics Anomalies, Then and Now <\/a>(2025), co-authored with Alex Imas. The \u201cthen and now\u201d structure revisits Thaler\u2019s original anomalies columns<\/a> from four decades ago, revealing something remarkable: nearly everything discovered in laboratory experiments back then holds up in real-world data today with stunning consistency.\u00a0<\/p>\n

\"\"Nobelist Richard Thaler, the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago\u2019s Book School of Business. (Photo: Jordan Joseffer)<\/p>\n

DellaVigna opened the conversation by asking Thaler if he owns a DeLorean\u2014a tongue-in-cheek reference to the movie \u201cBack to the Future\u201d to show how prescient the original book was. Reading it today feels \u201cuncanny\u201d\u2014nearly every major theme in contemporary behavioral economics, from present bias to fairness concerns, was already there. \u201cIt\u2019s unusual, 40 years later,\u201d DellaVigna observed.<\/p>\n

Some surprises emerged along the way. Thaler, a professor of behavioral science and economics at the University of Chicago\u2019s Booth School of Business, confessed he\u2019d have bet everything on behavioral economics transforming marketing rather than finance. Financial markets seemed impervious to behavioral insights\u2014all those efficient-market theorists and ready arbitrageurs should eliminate systematic mistakes. Instead, behavioral finance flourished while marketing departments got taken over by industrial organization economists. The difference, Malmendier suggested, is data density: financial markets generate constant high-frequency information that makes deviations from rational models impossible to dismiss.<\/p>\n

DellaVigna noted that while economists can be frustratingly stubborn about their assumptions, they have one virtue: \u201cthey don\u2019t get tired of the important bread and butter topics\u201d\u2014attitude toward risk, time preferences, and decision-making under uncertainty. This persistence on fundamentals, rather than chasing novel effects, made economics a natural home for behavioral insights. The field doesn\u2019t demand you constantly discover new phenomena; it lets you develop better models of how humans actually handle insurance decisions or retirement savings.<\/p>\n

The policy discussion turned to missed opportunities. Thaler expressed regret about not being involved in designing the Affordable Care Act\u2019s enrollment system. Someone decided to name coverage tiers bronze, silver, gold, and platinum\u2014brand names that evoke quality rankings. Then they added one more tier: \u201ccatastrophic.\u201d Not exactly a selling point for high-deductible plans that would have saved consumers money.<\/p>\n

\u201cSupposedly irrelevant factors,\u201d Thaler said with a wry smile, noting that half of employees at one large company picked \u201cdominated\u201d health plans\u2014policies where they\u2019d pay more no matter how much healthcare they used.<\/p>\n

Malmendier, who advises the German government as one of the \u201cFive Sages\u201d on the German Council of Economic Experts, nodded in recognition. \u201cIt\u2019s less glorious to do the plumbing\u2014thinking about the names for different categories and implementation details. But it can determine 90% of your effect size.\u201d The problem for academics: no publications emerge from that work, and they rarely get invited to the crucial meetings where details get decided.<\/p>\n

A \u2018hub for behavioral economics and finance\u2019<\/p>\n

UC Berkeley\u2019s influence on behavioral economics surfaced throughout the discussion. When the old guard of economists proved too rigidly cemented in their neoclassical worldview, Thaler decided to \u201ccorrupt the youth\u201d\u2014launching a behavioral economics bootcamp for Ph.D. students in the mid-1990s that ran every two summers. As Malmendier noted in her introduction, while another intellectual leader who set out to corrupt the youth in 399 BC ended up drinking the hemlock cup, \u201cit has been working out a bit better for Richard than for Socrates\u201d\u2014earning him the 2017 Nobel Prize<\/a>.<\/p>\n

Berkeley provided fertile ground for that mission. The original \u201cAnomalies\u201d column in the Journal of Economic Perspectives emerged from conversations with economist Hal Varian, founding dean of UC Berkeley\u2019s School of Information and former chief economist at Google. UC Berkeley Haas\u2019 Carl Shapiro, the Transamerica Chair in Business Strategy Emeritus, was instrumental in launching the Anomalies column and attended the talk. Daniel Kahneman, Thaler\u2019s mentor and collaborator who won the 2002 Nobel for economics, spent years as a Berkeley professor. Along with former Berkeley professor George Akerlof\u2014who also went on to win a Nobel\u2014Kahneman created the pioneering Berkeley PhD course that bridged social and cognitive psychology and economics and laid the groundwork for the field of behavioral economics. Two chapters in the new book feature Kahneman as co-author.<\/p>\n

As Malmendier put it, \u201cBerkeley really is the hub for behavioral economics and finance\u201d\u2014from undergraduate and graduate courses to the newly launched O\u2019Donnell Center for Behavioral Economics, where researchers are pushing the field\u2019s frontiers beyond psychology into life sciences, exploring how stress, trauma, and emotions shape economic decisions.<\/p>\n

\"\"Thaler, Malmendier, and DellaVigna share a laugh during the interview. (Photo by Jordan Joseffer)<\/p>\n

Learn more about the Ideas Hub at the O\u2019Donnell Center,<\/a> Berkeley Economics\u2019 research centers<\/a>, and support this groundbreaking work.<\/p>\n","protected":false},"excerpt":{"rendered":"Republished from UC Berkeley Economics Nobel laureate Richard Thaler interviewed by professors Ulrike Malmendier and Stefano DellaVigna (Photo…\n","protected":false},"author":2,"featured_media":156985,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[76806,1979,143,145,144],"class_list":["post-156984","post","type-post","status-publish","format-standard","has-post-thumbnail","category-oakland","tag-behavioral-economics-finance","tag-latest-news","tag-oakland","tag-oakland-headlines","tag-oakland-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/156984","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=156984"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/156984\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/156985"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=156984"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=156984"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=156984"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}