Edge Master Class 2008: Richard Thaler, Sendhil Mullainathan, Daniel Kahneman - A Short Course in Behavioral Economics

UPDATE: RICHARD THALER WINS 2017 NOBEL PRIZE IN ECONOMICS [10.9.17]

[View the Royal Swedish Academy of Sciences Press Release]

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Daniel Kahneman & Richard Thaler
Edge Retreat, Spring Mountain Vineyard, Napa, California, August 22, 2013

What we're saying is that there is a technology emerging from behavioral economics. It's not only an abstract thing. You can do things with it. We are just at the beginning. I thought that the input of psychology into behavioral economics was done. But hearing Sendhil was very encouraging because there was a lot of new psychology there. That conversation is continuing and it looks to me as if that conversation is going to go forward. It's pretty intuitive, based on research, good theory, and important. — Daniel Kahneman


Richard Thaler	Sendhil Mullainathan	Daniel Kahneman

Edge Master Class 2008
Richard Thaler, Sendhil Mullainathan, Daniel Kahneman
Sonoma, CA, July 25-27, 2008

A decade ago, Edge convened its first "Master Class" in Napa, California, in which psychologist and Nobel Laureate Daniel Kahneman taught a nine-hour course: "A Short Course On Thinking About Thinking." The attendees were a "who's who" of the new global business culture.

The following year, in 2008, we invited Richard Thaler, the father of behavioral economics, to continue the conversation by organizing and leading the class: "A Short Course On Behavioral Economics."

Thaler arrived at Stanford in the 1970s to work with Kahneman and his late partner, Amos Tversky. Thaler, in turn, asked Harvard economist and former student Sendhil Mullainathan, as well as Kahneman, to teach the class with him.

The entire text to the 2008 Master Class is available online, along with video highlights of the talks and a photo gallery. The text also appears in a book privately published by Edge Foundation, Inc.


Nathan Myhrvold	Jeff Bezos	Elon Musk

Whereas the focus for Kahneman's 2007 Master Class was on psychology, in 2008 the emphasis shifted to behavioral economics. As Kahneman noted: "There's new technology emerging from behavioral economics, and we are just starting to make use of that. I thought the input of psychology into economics was finished, but clearly it's not!"

The Master Classes are the most recent iteration in Edge's development, which began its activities under the name "The Reality Club" in 1981. Edge is different from The Algonquin, The Apostles, The Bloomsbury Group, or The Club, but it offers the same quality of intellectual adventure. The closest resemblances are to The Invisible College and the Lunar Society of Birmingham.

In contemporary terms, this results in Edge having a Google PageRank of "8," the same as The Atlantic, Corriere della Sera, The Economist, the Financial Times, Le Monde, The New Yorker, the New Statesman, Vanity Fair, the Wall Street Journal, the Washington Post, among others.

The early seventeenth-century Invisible College was a precursor to the Royal Society. Its members consisted of scientists such as Robert Boyle, John Wallis, and Robert Hooke. The Society's common theme was to acquire knowledge through experimental investigation. Another example is the nineteenth-century Lunar Society of Birmingham, an informal club of the leading cultural figures of the new industrial age—James Watt, Erasmus Darwin, Josiah Wedgwood, Joseph Priestley, and Benjamin Franklin.

In a similar fashion, Edge, through its Master Classes, gathers together intellectuals and technology pioneers. George Dyson, in his summary (below) of the second day of the proceedings, writes:

Retreating to the luxury of Sonoma to discuss economic theory in mid-2008 conveys images of Fiddling while Rome Burns. Do the architects of Microsoft, Amazon, Google, PayPal, and Facebook have anything to teach the behavioral economists—and anything to learn? So what? What's new?? As it turns out, all kinds of things are new. Entirely new economic structures and pathways have come into existence in the past few years.

Indeed, as one distinguished European visitor noted, the weekend, which involved the two-day Master Class in Sonoma followed by a San Francisco dinner, was "a remarkable gathering of outstanding minds. These are the people that are rewriting our global culture."

— John Brockman, Editor


Sean Parker	Salar Kamangar	Evan Williams

RICHARD H. THALER is the Ralph and Dorothy Keller Distinguished Service Professor of Behavioral Science and Economics at Chicago's Booth School of Business and director of the University of Chicago’s Center for Decision Research. He is coauthor (with Cass Sunstein) of Nudge: Improving Decisions About Health, Wealth, and Happiness, and author of Misbehaving. Thaler is the recipient of the 2017 Nobel Prize in economics. Richard Thaler's Edge Bio Page

Edge Master Class 2015: A Short Course in Superforecasting, Class V, Part 1

Topic:

Master Classes

https://vimeo.com/136395394

The beauty of forecasting tournaments is that they’re pure accuracy games that impose an unusual monastic discipline on how people go about making probability estimates of the possible consequences of policy options. It’s a way of reducing escape clauses for the debaters, as well as reducing motivated reasoning room for the audience.

Edge Master Class 2015: A Short Course in Superforecasting, Class V, Part 2

Topic:

Master Classes

https://vimeo.com/136395393

The beauty of forecasting tournaments is that they’re pure accuracy games that impose an unusual monastic discipline on how people go about making probability estimates of the possible consequences of policy options. It’s a way of reducing escape clauses for the debaters, as well as reducing motivated reasoning room for the audience.

Edge Master Class 2015: A Short Course in Superforecasting, Class V

Condensing it All Into Four Big Problems and a Killer App Solution

With

Philip Tetlock

[9.22.15]

Edge Master Class 2015 with Philip Tetlock
— A Short Course in Superforecasting —

Philip Tetlock: If you turn to session six, slide 117-118, you’re going to see a little piece on the seductive power of scenarios. Imagine you’ve got one of these between subjects designs in which half of the people read the top slide, half of the people read the bottom slide, then they make a judgment about the plausibility or probability of this outcome.

Edge Master Class 2015: A Short Course in Superforecasting, Class IV

Skillful Backward and Forward Reasoning in Time: Superforecasting Requires "Counterfactualizing"

With

Philip Tetlock

[9.15.15]

Edge Master Class 2015 with Philip Tetlock
— A Short Course in Superforecasting —

Philip Tetlock: What I want to do today is three things: I want to clear up some confusion from last time about counterfactual reasoning and how it’s intertwined with superforecasting; I want to link up some of the things that are in the final sets of slides on sacred values and taboo cognition and superforecasting; Then, I want to give you some examples of superforecasting in action and talk about condensing it all into four big problems and one killer app solution.

Edge Master Class 2015: A Short Course in Superforecasting, Class IV, Part 2

Topic:

Master Classes

https://vimeo.com/136214238

A famous economist, Albert Hirschman, had a wonderful phrase, "self-subversion." Some people, he thought, were capable of thinking in self-subverting ways. What would a self-subverting liberal or conservative say about the Cold War? A self-subverting liberal might say, "I don’t like Reagan.

Edge Master Class 2015: A Short Course in Superforecasting, Class IV, Part 1

Topic:

Master Classes

https://vimeo.com/136131281

A famous economist, Albert Hirschman, had a wonderful phrase, "self-subversion." Some people, he thought, were capable of thinking in self-subverting ways. What would a self-subverting liberal or conservative say about the Cold War? A self-subverting liberal might say, "I don’t like Reagan.

Edge Master Class 2015: A Short Course in Superforecasting, Class III

Counterfactual History: The Elusive Control Groups in Policy Debates

With

Philip Tetlock

[9.1.15]

Edge Master Class 2015 with Philip Tetlock
— A Short Course in Superforecasting —

Philip Tetlock: I was thinking over lunch about how to summarize or capture the essence of what went on this morning. There were certain key ideas I wanted to get across and for the most part they’ve gotten across, but some may have been miscommunicated a bit based on some feedback I’ve gotten.

You can look at the glass as either one-third full or two-thirds empty. Forecasting tournaments are in their infancy as a scientific method and as a tool for improving policy debate. We’ve gone through the first generation of tournaments, and we’ve made tangible progress. We’ve learned how to keep score; we have shown that it’s possible to measure the accuracy of probabilistic judgments, of messy real world events; we have shown that it’s possible to improve accuracy through a combination of selecting the right people, training them, teaming them, and using the right types of aggregation algorithms. Those are all achievements, but we’re still far short of what I’m going to call the “Bob Axelrod ideal” of a mechanism that can guide policy with evidence based precision. I don’t know if that’s a fair characterization of where you would want us to be, but we’re at least two-thirds short of that. We have made some progress, and we’re on the right path.

Edge Master Class 2015: A Short Course in Superforecasting, Class III, Part 2

Topic:

Master Classes

https://vimeo.com/136131280

There's a picture of two people on slide seventy-two, one of whom is one of the most famous historians in the 20^th century, E.H. Carr, and the other of whom is a famous economic historian at the University of Chicago, Robert Fogel. They could not have more different attitudes toward the importance of counterfactuals in history. For E.H. Carr, counterfactuals were a pestilence, they were a frivolous parlor game, a methodological rattle, a sore loser's history. It was a waste of cognitive effort to think about counterfactuals.

Edge Master Class 2015: A Short Course in Superforecasting, Class III, Part 1

Topic:

Master Classes

https://vimeo.com/136131283

There's a picture of two people on slide seventy-two, one of whom is one of the most famous historians in the 20^th century, E.H. Carr, and the other of whom is a famous economic historian at the University of Chicago, Robert Fogel. They could not have more different attitudes toward the importance of counterfactuals in history. For E.H. Carr, counterfactuals were a pestilence, they were a frivolous parlor game, a methodological rattle, a sore loser's history. It was a waste of cognitive effort to think about counterfactuals.

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