This week I talk with Ernst Fehr, Professor of Microeconomics and Experimental Economics at the University of Zurich, and a leading figure in the field of behavioral economics. Ernst's profound contributions to our understanding of human behavior and economic decision-making have made him a pillar in his discipline. His pioneering work has expanded the traditional framework of economics to include concerns for fairness, cooperation, and altruism, fundamentally transforming the landscape of economic research.
Topics Covered:
Behavioral Economics and Financial Planning Inertia
The Role of Fairness and Altruism in Economic Behavior
Determinants of Creativity and Success
Impact of Experimental Economics on Labor Markets
Time Stamps:
00:00 Ernst upbringing in Austria.
10:50 Self-interest is a driving force in behavior.
12:50 Efficiency wage model incentivizes employees to perform.
22:56 Typically, average offer is 40% accepted.
24:49 Different cultures exhibit varying economic behavior patterns.
33:13 New paper challenges theories on human pro-sociality.
37:01 Behavioral economics and personal finance challenges.
48:16 Exogenous shocker, facilitator key to inducing action.
56:09 Study finds three social preference types prevalent.
01:01:01 Exchange experience in Germany shaped openness. motivator for conscientiousness.
01:03:09 Emphasizing the importance of asking quality questions.
In this episode you will gain invaluable insights into Professor Fehr's examination of human behavior, which highlights the inertia and behavioral transaction costs that hinder financial actions. Furthermore, the discussion on fairness and altruism provides a nuanced understanding of how these motivations interplay with economic decisions, challenging the traditional focus on self-interest.
This episode also explores the significant impact of experimental economics on understanding market fairness and employer-employee dynamics. For anyone interested in the behavioral aspects of economics and personal finance, this conversation offers a wealth of practical insights and thought-provoking ideas.
Economic Matters - The podcast is hosted by Laurence Kotlikoff, a Boston University Economist, a NY Times Best Selling Author, President of maxifi.com, and Author of Money Magic.
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Do People Act Like Human Beings? Insights from the Brilliant Career of Behavioral Economist, Ernst Fehr