Published Apr 12, 2016

Encore of Episode 16: Misbehaving

Dive into behavioral economics with Shankar Vedantam and Richard Thaler as they reveal the human tendencies reshaping traditional economic assumptions, explore the Ulysses Strategy in self-control battles, and unpack mental accounting's impact on financial decisions and happiness.
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Episode Highlights

  • Ulysses Strategy

    The concept of the Ulysses Strategy is a fascinating method people use to enforce self-control by relying on external means. explains how this strategy is inspired by the myth of Ulysses, who had himself bound to the mast of his ship to resist the sirens' tempting songs 1. This approach is mirrored in modern scenarios, like a scene from "Curb Your Enthusiasm," where a character asks a friend to prevent them from eating dessert, highlighting the "hot-cold empathy gap." notes, "When she was in the cold state, she didn't want any dessert. When she was staring the dessert in the face, you know, let me add it."

    When she was in the cold state, she didn't want any dessert. When she was staring the dessert in the face, you know, let me add it.

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    This gap illustrates the challenge of maintaining self-control when faced with immediate temptations 1.

       

    Everyday Temptations

    Everyday temptations reveal the constant struggle individuals face with self-control. discusses how classical economics often overlooks this struggle, assuming people always make optimal choices 2. However, experiments like the marshmallow test show that resisting temptation is hard work, a concept Thaler emphasizes: "Resisting temptation is work. This is important."

    Resisting temptation is work. This is important.

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    The difficulty of self-control is evident in societal issues like obesity and inadequate retirement savings, where the effort required to resist immediate gratification is significant 2.

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