Good question about the "Phools" side of it and good to see mention of Ariely's "Dishonesty" book and Buonomano's "Brain Bugs." I read the Ariely book, but hadn't heard of "Brain Bugs" - now on my list. Also not heard of eLife, the electronic journal, and the idea of the tax credit for advisor expenses is really interesting and I wonder whether that will be achieved.VictoriaF wrote:Hi Fallible,Fallible wrote:Victoria, how did the presentation go? Were they asked what was really new in the book? I've read only a Kindle sample while awaiting the library book, but it seemed they were anticipating readers would wonder this. Want to share your question to Akerlof and his answer with us?VictoriaF wrote:Akerlof, G.A. and Shiller, R.J."Phishing for Phools".
On 17 December 2015, I attended Akerlof's and Shiller's presentation of the book at the Smithsonian. That was my fist time in the presence of two Nobel prize laureates at the same time. I came in early and sat in the front row. Akerlof and I have exchanged some smiles before he started and later he took my question.
I was highly attuned to the presentation and was catching interesting bits. For example, Shiller mentioned that Jason Zweig said that it's remarkable that Akerlof and Shiller co-authored books twice (the first one was Animal Spirits). Shiller also made several book recommendations including Ariely's The Honest Truth About Dishonesty and Dean Buonomano's Brain Bugs. He seemed uncomfortable marketing his own book and tried to focus on the message that the card deck is stacked against a consumer.
Shiller gave tribute to Akerlof's work citing his papers "Market for Lemons" and "The Economics of Caste and of the Rat Race." He referred to John Kenneth Galbraith's The Affluent Society. He mentioned a new free electronic journal eLife that contrasts itself with Nature and Science, the latter being expensive and popularizing.
My question was "Much of the presentation is about what the Phishers do. Do you also explain Phools' behavior?" I was interested in cognitive biases, but Shiller's response was about policy. He said that many people need financial advice and are not getting it. He recommends making expenses on financial advisers a tax credit, rather than an itemized deduction, because most people who need financial advice don't itemize. I responded that many financial advisers do more harm than good. Shiller responded that unfortunately they don't have the same ethics code as doctors do, but did not elaborate any further.
Thanks for the report.