Fair Is Fair: With Guests John Thorn & Richard Thaler

August 31, 2020
It's hard to be objective about fairness—because what seems fair so often depends on your reference points.

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After you listen

How you adhere to reference points can impact the important financial decisions you face, like when to sell an investment or when to claim Social Security benefits.

How you adhere to reference points can impact the important financial decisions you face, like when to sell an investment or when to claim Social Security benefits.

"Mom! Janey got more ice cream than me! Not fair!" For kids—and many adults—the notion of what's fair or not often involves comparing quantities of some valuable thing. But there's another, more nuanced concept of fairness that crops up in certain types of negotiations.

In this episode of Choiceology with Katy Milkman, we look at what people perceive as fair or not amid changing circumstances.

At the turn of the 20th century, professional baseball had entered what came to be known as the dead-ball era. Pitchers had a distinct advantage over batters, resulting in low-scoring games and a substantial drop in attendance. Owners and league officials decided they needed to change some rules to entice fans back to their stadiums. One option on the table was to ban the spitball.

John Thorn explains the history of the spitball and other doctored pitches and describes the state of baseball at the time. While empty bleachers were clearly bad for the bottom line, the owners also recognized the problem of implementing a rule change that would likely destroy some pitchers' careers. You’ll hear about the clever solution that the league arrived at to ensure a more exciting game without alienating their players.

John Thorn is the official historian for Major League Baseball and the author of Baseball in the Garden of Eden: The Secret History of the Early Game.

Next, Richard Thaler joins Katy to explain his pioneering work with Daniel Kahneman and Jack Knetsch in describing the principle of dual entitlement. You'll hear about several different scenarios where the phenomenon occurs and how it relates to status quo bias.

Richard Thaler is a Nobel Prize-winning economist and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago’s Booth School of Business. He is the author of several books, including Misbehaving: The Making of Behavioral Economics.

Choiceology is an original podcast from Charles Schwab.

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