RAND recently held a conference on the implications of behavioural economics for financial decision making. Among the talks include Sendhil Mullainthan on behaviourally informed financial regulation. All of the videos are available below including talks by Richard Thaler and others. The main implication so far of this literature is that consumers make relatively predictable mistakes when making financial decisions and that various ways of simplifying the choices involved and making them more active can improve people’s lives and the functioning of markets. People should watch some of the videos before making up their mind. The simplistic arguments about paternalism do not apply here in the same way as they would to arguments around policy proposals such as mandatory pensions.
Addendum: The NBER have also posted up a number of very useful videos on how to implement experimental methods in real-world economics.
One reply on “How Behavioural Economics Should Influence Financial Regulation”
The PRSA development is a classic case – almost zero take up. Informative stuff makes you wonder how deep the thinking goes here. The interaction and consequence of fallible consumers, firm behaviour and imperfect regulation makes sense and is an insight that could illuminate debate here.