Prof. Robert Frank: Success, Luck, and Luxury (EP.230)

<p>The world is a highly competitive place, and becoming successful requires hard work, dedication, and luck. This is the view of today’s guest, Professor Robert Frank, who helps us unravel the nuance of conspicuous consumption trends and the role of luck in gaining financial success. Professor Frank is the emeritus Henrietta Johnson Louis Professor of Management at Cornell University and holds an MA in statistics and a Ph.D. in Economics from UC Berkeley. He is also a prolific author, having written 12 books, financial textbooks, and many peer-reviewed articles in journals such as the American Economic Review, Econometrica, and Journal of Political Economy. He is passionate about how policy can help drive positive consumer behaviour, reduce inequality, and increase individual happiness. His work has also focused on the role of luck in achieving financial success which he covers in his book <em>Success and Luck. </em>In this episode, we unpack how individuals can improve societal collective action, the role of policy in driving those changes, and how luck interplays with success. We discuss economic and financial relativism, the dangers of conspicuous consumption, how expenditure cascades occur, and what influences consumption trends in society. We also dive into the topic of luck, whether wealthy people are happier, what behavioural changes are needed to create a better society, and more.</p> <p> </p> <p><strong>Key Points From This Episode:</strong></p> <p> </p> <ul> <li>Professor Frank describes the difference between departures from rational choice with regret and without regret. <strong>(0:04:34)</strong></li> <li>Whether he classifies his work as behavioural economics. <strong>(0:07:38)</strong></li> <li>An explanation of economic and financial relativism. <strong>(0:10:50)</strong></li> <li>The role of economic and financial relativism in consumption trends. <strong>(0:12:44)</strong></li> <li>Find out what constitutes a positional good. <strong>(0:16:56)</strong></li> <li>How the consumption of positional