I do not trade impulsively anymore. Of course, research is me-search; people go into areas that interest them. I had a lot of fun trading and I made a lot of money. I probably would have made more money if I had traded less actively.

How many neoclassical economists does it take to screw in a lightbulb?

The Answer—none, the invisible hand will do it—is based on the assumption that people are both selfish and smart, but financial markets are always efficient. Those who still believe Adam Smith was right about the invisible hand of the market should know that in his book that is less well-known today, The Theory of Moral Sentiments, published six years before The Wealth of Nations, he actually is much more aligned with the idea that people are not always either selfish or smart. The idea of people having any sort of willpower problem at all is completely foreign to the neoclassical school of economics.

That is why behavioral economists are gaining favor. Only 20 percent of all money managers actually beat the market, but most investors are irrational enough to think they can, so they behave accordingly.

Yes, Richard Thaler, the doyen of the behavioral school, says people are nicer and dumber than classical economics assumes. I do not consider myself a behavioral economist, though. I’m an economist who studies human behavior. A biologist would reconcile the subject of rational versus irrational behavior by observing that the way a person is programmed that can produce helpful behavior in one setting will produce bad behavior in another.