The finance industry has gone from intuitively exploiting behavioral biases, to endlessly labeling them, to discussing how to “correct” them, to (finally) start talking about how to work productively with people who are inherently… people. Messy, regular, (sometimes self-aware) people.
Richard Thaler, long a lighthouse on these BeFi seas, said it beautifully in his book Misbehaving (and I had to dig this quote out for something else, so I’m sharing it here):
The bigger lesson is that once you understand a behavioral problem, you can sometimes invent a behavioral solution to it.
This is what cognitive behavioral therapy does, along with its millions of offshoots.
Don’t confuse the logical with the psychological.
Do work with the unique logic and psychology of each person/group of people to understand the logical and psychological paths to get to where they want to be.
Financially and otherwise.