Why Humans Don't Think Like Economists | Dr. Colin Camerer | Behavioral Economist, Neuroeconomics Pioneer, and Professor of Behavioral Economics at California Institute of Technology | S13 Ep19 | #240

For decades, economics was built around a simple assumption: people are rational. But what if that assumption is only partially true? In this episode, I sit down with Colin Camerer, one of the pioneers of behavioral economics and neuroeconomics, whose work helped transform economics into a discipline that takes psychology, cognition, emotion, and biology seriously. We begin with his unusual educational journey as a gifted student and trace how he became interested in the puzzles that traditional economic theory struggled to explain.Our conversation explores what economists mean by rationality, why people systematically deviate from rational models, and how behavioral economics emerged as an attempt to better understand real human decision-making. Colin explains concepts such as choice consistency, Bayesian reasoning, judgment under uncertainty, and the psychological forces that shape our choices. Along the way, we discuss financial markets, game theory, cooperation, incentives, and the limits of human prediction.We also examine the rise of neuroeconomics, cultural evolution, and artificial intelligence. Colin shares how technologies like AlphaGo reveal new forms of human learning and how AI may reshape the future of expertise, decision-making, and scientific discovery. This episode is an exploration of how humans think, why we make mistakes, and what economics can learn from psychology, neuroscience, and human behavior.Chapters:00:00 – Introduction01:00 – Growing Up as a Gifted Student06:30 – Educational Acceleration and Early Learning12:00 – Discovering Economics16:20 – The Market Efficiency Hypothesis18:30 – Why Behavioral Economics Emerged19:37 – What Does It Mean to Be Rational?25:00 – Choice Consistency and Bayes' Rule31:00 – Why Humans Deviate from Rational Models37:00 – Heuristics, Biases, and Judgment43:00 – Game Theory and Strategic Thinking49:00 – Cooperation, Competition, and Incentives55:00 – Neuroeconomics and the Brain01:01:00 – AI, Decision-Making, and Human Learning01:07:00 – Cultural Evolution and Collective Intelligence01:13:15 – AlphaGo and the Future of Expertise01:15:30 – Closing ReflectionsColin F. Camerer: https://www.hss.caltech.edu/people/colin-f-camererBooks & Media MentionedBooksThinking, Fast and Slow — Daniel KahnemanJudgment Under Uncertainty: Heuristics and Biases — Kahneman, Slovic & TverskyThe Foundations of Statistics — Leonard SavageThinkers ReferencedDaniel KahnemanAmos TverskyEugene FamaHerbert SimonJohn NashJohn von NeumannGames & TechnologiesAlphaGoChessGo