Why Rational People Make Irrational Choices | Alex Imas

Why do smart, well-informed people still make decisions that work against their best interests? This week, we explore one of behavioral economics most perplexing puzzles with researcher and professor Alex Imas, who co-authored The Winner’s Curse with Nobel laureate Richard Thaler.

Alex takes us through classic behavioral “anomalies” that challenged traditional economic models and why they still matter decades later. From auctions and sports drafts to loss-aversion and self-control, we examine how our biases don’t just show up in labs; they show up in our boardrooms, financial markets, and everyday life, and they’re not just quirky mistakes – many of them have very real economic consequences.

We also look ahead to the future of economics and hypothesize what it needs to become in a world of limited attention, targeted persuasion, and omnipresent algorithms. For marketers and policymakers, understanding human behavior is no longer optional; it’s essential. If we want to live in a world with economic models that reflect reality, we need to account for how people really think, decide, and sometimes fail.

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[0:00] Introduction and speed round with Alex Imas
[11:55] The Winner’s Curse and its implications
[21:13] Behavioral economics and standard economic matters
[28:01] Loss aversion and decision-making
[35:04] Behavioral economics in policy and law
[41:00] Tom Sawyer economics
[47:30] Social media, attention, and exploitation of bias
[56:38] The importance of cooperation and social systems
[58:40] New music in 2026
[1:07:53] Grooving session: framing, preferences, and happiness

Why Rational People Make Irrational Choices | Alex Imas

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AIRDATE: January 26, 2026 EPISODE 520

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Alex Imas

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