Join Stanford GSB finance professor Jonathan Berk and Jules van Binsbergen of The Wharton School in a conversation with prominent business leaders about common flaws in the decision making process and what to do about them. Learn more at AllElseEqualPodcast.com.All Else Equal: Making Better Decisions Podcast is a production of Stanford Graduate School of Business and is produced by University FM.

All Else Equal: Making Better Decisions

All Else Equal is taking a short break over the summer and will be revisiting some of our favorite conversations from last season. The show will be back with new episodes soon. 
Whether it be in politics, public health, or corporate finance, why are people more likely to interpret facts or data in a way that fits their preconceived notions about the world as opposed to searching for the fundamental truth?  
A new paper from the Harvard Business School called, Sharing Models to Interpret Data (by Joshua Schwartzstein and Adi Sunderam)
studies the propensity for people to adopt interpretations to data based on their community’s beliefs, and why this can lead to less accurate conclusions. Hosts and finance professors Jonathan Berk and Jules van Binsbergen are joined by the paper’s co-author  Adi Sunderam, who is a professor of corporate finance at Harvard Business School, a research associate at the National Bureau of Economic Research, and a co-editor of the Journal of Finance. 
The conversation covers the complexity of Bayesian updating and how the process is improperly deployed in today’s thinking, not only in corporate decision-making but also on a sociological level. They also discuss Sunderam’s model for explaining how people interpret data, why people are more likely to fall into group-belief dynamics, and if there are any interventions that would lead to better decision-making.  
Read Adi Sunderam and Joshua Schwartzstein’s paper:  Sharing Models to Interpret Data  
Find All Else Equal on the web:  
https://lauder.wharton.upenn.edu/allelse/
 
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM. 
 
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Rerun: Ep73 “The Dangers of Group Think on Decision Making” with Adi Sunderam

All Else Equal is taking a short break over the summer and will be revisiting some of our favorite conversations from last season. The show will be back with new episodes soon.
In the final part of this two-part interview, Steven Pinker, an experimental psychologist and Harvard professor, again joins hosts and finance professors Jonathan Berk and Jules van Binsbergen to discuss his new book When Everyone Knows That Everyone Knows: Common Knowledge and the Mysteries of Money, Power, and Everyday Life.
In this episode, Jonathan and Jules break down more revelatory examples from Steven’s book that demonstrate how common knowledge is a first order explanatory variable for how humans behave. They also explore the role common knowledge plays in financial markets, particularly when it comes to speculative trading, and examine common knowledge in an academic freedom sense, highlighting the del
Find All Else Equal on the web: 
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.
 
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Rerun: Ep69 “The Science Behind Why We Don’t Just Say What We Mean” with Psychologist Steven Pinker - Part 2

All Else Equal is taking a short break over the summer and will be revisiting some of our favorite conversations from last season. The show will be back with new episodes soon. 
Everyday, we participate in seemingly arbitrary but essential choices for society to function. We all agree on what side of the road to drive on, to use paper currency, or to speak the same language. These kinds of choices make up a group’s common knowledge – things that are made blatantly and publicly known. But what about the things that are known, but unspoken? What is the purpose of innuendos, euphemisms, and veiling the true meaning of our words in society? 
Steven Pinker, an experimental psychologist and Harvard professor, joins hosts and finance professors Jonathan Berk and Jules van Binsbergen to discuss his new book When Everyone Knows That Everyone Knows: Common Knowledge and the Mysteries of Money, Power, and Everyday Life.
In this two-part conversation, they explore the psychological and social significance of common knowledge in human interactions, highlighting its complex role in both fostering cooperation and permitting social taboos. They also discuss the intersection of common knowledge with economic behaviors like speculative trading, and the balance between maintaining social norms and fostering open debate in academic settings.
 
Find All Else Equal on the web: 
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.
 
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Rerun: Ep69 “The Science Behind Why We Don’t Just Say What We Mean” with Psychologist Steven Pinker - Part 1

All Else Equal is taking a short break over the summer and will be revisiting some of our favorite conversations from last season. The show will be back with new episodes soon. 
Historically, the U.S. has had a habit of overestimating the capabilities of its enemies. Why? Is this an intentional security strategy? Or does the U.S. need to change the way it gathers enemy intelligence? 
Former National Security Advisor H.R. McMaster gives hosts and finance professors Jonathan Berk and Jules van Binsbergen a crash course on military intelligence and national security advising. 
The conversation covers why the overestimation of enemies happens, including historical examples of misjudgments, the role of proxies in modern conflicts, strategic considerations involving major powers like China, and the threat of information warfare.  
 
Find All Else Equal on the web:  
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.
 
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Rerun: Ep68 “Is It Better to Overestimate or Underestimate Your Enemies?” with H.R. McMaster

A proposed constitutional amendment on the ballots in California this November will impose a one-time 5% wealth tax on billionaires. Proponents of the amendment say it will bring upwards of $100 billion to California’s revenue, but how did they get to that number and what other side effects of this wealth tax could be looming in the wings? Will this tax actually raise more revenue? 
Hosts and finance professors Jonathan Berk and Jules van Binsbergen sit down with Stanford finance professor Joshua Rauh to discuss why wealth taxes don’t often achieve their desired result.  
The conversation covers the Laffer curve, behavioral responses to tax increases, and the economic side effects of cultivating a society that does not celebrate innovative talent. 
Find All Else Equal on the web: 
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.
 
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Ep78 “What’s Wrong With Taxing Billionaires More?” with Joshua Rauh

This episode originally aired previously and is being re-shared due to its continued relevance. Enjoy this conversation with Jeff Hawkins on intelligence, neuroscience, and the future of AI.
With growing concerns over whether or not AI will take away jobs and eventually become superior to human intelligence, maybe it’s time to take a closer look at the human brain and discover how AI will always have its limitations. 
Hosts and finance professors Jonathan Berk and Jules van Binsbergen sit down with Jeff Hawkins, a neuroscientist and computer scientist, whose book A Thousand Brains challenges the way we think about intelligence and how the brain works. 
Jonathan, Jules, and Jeff discuss the fundamentals of how the human brain operates and how it differs from the way current AI models work. They also dive into the cutting-edge innovations happening in the world of AI and whether future versions of the technology could one day emulate the human brain more closely. 
 
Find All Else Equal on the web: 
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.
 
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Rerun: Ep65 "Will Future AI Systems Operate Like The Human Brain? It’s Complicated” with Jeff Hawkins

How should academic discourse take place? Is it time to update the antiquated journal system? 
In the season finale, hosts and finance professors Jonathan Berk and Jules van Binsbergen tackle the problems present in the current system for disseminating academic research, including how digital distribution has eliminated effective curation while peer review remains slow, incentive-misaligned, and dominated by anonymous referees seeking to impress editors.
Together, they explain the inner-workings of the academic journal system and the problems with peer review. Jonathan also shares details about his new website, launched with fellow researchers, that provides a place for rigorous informed discourse. 
Find All Else Equal on the web:  
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.
 
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Ep77 The Academic Journal System is Broken, Here’s How to Fix It

This week, we’re revisiting our ever-timely and fascinating conversation around misinformation with London Business School professor Alex Edmans. All Else Equal will be back with a new episode in two weeks. 
What is the real problem with misinformation? Are our biases so ingrained in us that we are unable to think critically about the world and the systems around us? What happens when large institutions attempt to push a heterodox narrative? Do we simply need more education to overcome misinformation, or do we need something much deeper—to learn to think critically again? In this episode, hosts and finance professors Jonathan Berk and Jules van Binsbergen welcome Alex Edmans, Professor of Finance at London Business School to discuss his latest book, May Contain Lies: How Stories, Statistics, and Studies Exploit Our Biases – And What We Can Do About It.
 
Find All Else Equal on the web:  
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.
 
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Rerun: Ep46 "May Contain Lies" with Alex Edmans

What do measures of uncertainty tell us about the state of the economy and how should firms and households use
those measurements to inform decision-making? Hosts and finance professors Jonathan Berk and Jules van Binsbergen are joined by returning guest Nick Bloom,
professor of economics at Stanford University, whose research on the causes and consequences of uncertainty helped build the Economic Policy Uncertainty Index.
In the discussion, they cover the various ways to measure uncertainty including the VIX and text-based methods, Bloom explains how the Economic Policy Uncertainty Index works, why
discrepancies can sometimes exist between uncertainty measurements, and how these uncertainty indices can help inform better business decision-making.
 
Find All Else Equal on the web: 
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.
 
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Ep76 “How Should You Deal with Uncertainty in Today's World?” with Nick Bloom

Despite it being widely taught in business schools and practiced in the industry, you should think twice before using the internal rate of return as a criteria for making an investment decision.
Hosts and finance professors Jonathan Berk and Jules van Binsbergen are back to discuss why using the internal rate of return (IRR) as an investment decision rule is fundamentally flawed compared with the net present value (NPV).
They outline IRR’s problems including multiple or nonexistent solutions, failure to account for scale and timing, and structural vulnerability once financing/payment plans are allowed, enabling arbitrary or inflated IRRs. 
 
Find All Else Equal on the web: 
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.
 
Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.