A Behavioral Economist on Gen Z, Unrealistic Optimism, and Recession

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Sunstein wrote “even experts disagree about what is likely to happen in 2023.”

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Cass Sunstein is a professor at Harvard Law School and co-author of “Nudge: The Final Edition” alongside Richard Thaler, a professor at University of Chicago Booth School of Business. The book explores decision-making through the use of behavioral economics principles and examples.

Nudge spends time talking about both unrealistic optimism and how that is impacted by a bad event. For instance, unrealistic optimism is something Thaler and Sunstein say “characterizes most people in most social categories. When they overestimate their personal immunity to harm, people may fail to take sensible preventable steps.” The one thing that appears to change that is life experience. “If people are reminded of a bad event, they may not continue to be so optimistic,” the authors write.