All Else Equal: Making Better Decisions

A lively debate about whether the financial sector actually benefits society. They probe why finance’s value is often unseen and why markets can outperform central planning. The conversation tackles critiques of rent-seeking, the risks of exploiting unsophisticated actors, and how incentives, innovation, and AI might reshape market coordination.

Dirk Jenter, a finance professor at LSE who studies CEOs and executive pay, joins the conversation. He discusses who typically rises to CEO and the common career paths. He explores why boards often favor insiders and when firms bring back former leaders. He also talks about how pay is set, including the role of firm scale and peer comparisons.

Adi Sunderam, Harvard Business School professor and NBER research associate, explains why people adopt community-driven interpretations of data. He discusses closed model sets, social pressures that exclude alternatives, how post-hoc story selection can make unlikely explanations stick, and organizational remedies like model-driven teams to counteract echo chambers.

A lively discussion comparing public mutual funds to private alternatives and why their fee structures differ. They explore why alternatives often show positive alpha and why managers cap fund size. The conversation highlights performance fees like two-and-twenty and the role of liquidity and costly due diligence in shaping incentives.

Nick Bloom, Stanford economics professor and leading remote-work researcher. He walks through how hybrid work stuck, randomized trials on productivity and retention, the surprising link to higher birthrates, and practical rules for firms like coordinated office days and output-based reviews. Short, clear takes on balancing mentorship, deep work, and long-term risks.

In this engaging discussion, Steven Pinker, an acclaimed experimental psychologist and Harvard professor, dives into his latest book, exploring the intricacies of common knowledge. He reveals how common knowledge influences human behavior and financial markets, relating it to speculative trading. Pinker cleverly navigates the pitfalls of mutual knowledge, the psychology behind irrational trading, and the delicate balance of free speech in academic settings. Expect intriguing insights into how collective understanding shapes our actions and societal norms.

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. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

In this engaging discussion, Ludovic Phalippou, a professor of financial economics and author of Private Equity Laid Bare, delves into the rise of private equity. He explores why private markets attract long-term investors, highlighting the balance between complexity and high fees. Phalippou challenges misconceptions about superior returns and discusses the hidden costs in private equity, urging transparency. He also shares insights on the role of mega asset owners and the evolving landscape of investment performance, making a compelling case for understanding this dynamic sector.

H.R. McMaster, a former U.S. National Security Advisor and military strategist, shares his insights on U.S. intelligence errors. He discusses how the U.S. often overestimates enemy capabilities, drawing on historical misjudgments and the complexities of modern proxy warfare. McMaster highlights the need for a balanced view of threats, especially concerning China and Iran. He also explores the impact of information warfare and the challenges of understanding authoritarian regimes, emphasizing the importance of critical assessment in intelligence.

As the New York City mayoral race heats up, rent control takes center stage. The hosts dissect the historical failures of rent control, comparing the housing crises in Chicago and San Francisco. They delve into how price caps can increase demand and reduce housing supply, leading to long-term negative effects on development and maintenance. The discussion also turns to the motives behind rent control and whether it truly benefits families or just distorts the market. Ultimately, they question if the benefits really justify the hefty costs.