One of the more interesting random questions I got this past week was: what is life?
My answer was, it is a gift.
The much more thorough answer is in this video!
What is a 401(k) plan, you ask? Something like a PF account for us here in India.
And what about it, you ask? Well, this:
In the early days of 401(k) plans, Thaler noted, many workers failed to join—even with generous matching contributions from the employer—because the process was too complex, full of decisions and financial terminology. In effect, sludge.https://news.uchicago.edu/story/how-much-can-you-nudge-good-richard-thaler-explores-possibilities-limits
In 2004, however, Thaler co-authored a paper with UCLA economist Shlomo Benartzi that outlined simple ways to improve the choice architecture for encouraging employees to choose a retirement savings plan—starting with the default option of being opted into an indexed fund unless the employee took the additional step of choosing something else. This simple change in choice architecture has profoundly impacted the retirement savings market.
For years now, whenever I teach behavioral economics, I talk about this paper. A classic in its field, of course. And in order to get students to appreciate the point better, I give them an example that will resonate better with them. And when it comes to choice fatigue, what can be a better example than ordering a Subway sandwich?
Lots of reasons to love this ad, but I think I’ve got the nerdiest reason of the lot! Now all that remains is to figure out how to get Tanmay Bhat or/and Devaiah Bopanna into a class to talk about behavioral economics!
(Videos are usually reserved for Sundays in these parts, of course, but this was just too good, and well, I went ahead and ate the cookie. IYKYK!)
I’m a 3Blue1Brown bhakt, and I encourage you to join the cult 🙂
And if you’re wondering why Lego, of all things – it is because I and my daughter are learning about Democritus and atoms:
Why is Lego the most ingenious toy in the world?Gaarder, Jostein. Sophie’s World: A Novel About the History of Philosophy (p. 42). Orion. Kindle Edition
For a start, Sophie was not at all sure she agreed that it was. It was years since she had played with the little plastic blocks. Moreover she could not for the life of her see what Lego could possibly have to do with philosophy.
But she was a dutiful student. Rummaging on the top shelf of her closet, she found a bag full of Lego blocks of all shapes and sizes.
For the first time in ages she began to build with them. As she worked, some ideas began to occur to her about the blocks.
They are easy to assemble, she thought. Even though they are all different, they all fit together. They are also unbreakable. She couldn’t ever remember having seen a broken Lego block. All her blocks looked as bright and new as the day they were bought, many years ago. The best thing about them was that with Lego she could construct any kind of object. And then she could separate the blocks and construct something new.
What more could one ask of a toy? Sophie decided that Lego really could be called the most ingenious toy in the world. But what it had to do with philosophy was beyond her.