Alex Tabarrok, an economics professor at George Mason University, holds behavioral finance near and dear to his heart—and he’s got lots to show for it! A staunch advocate of financial education, he co-founded Marginal Revolution University, to bring economics education to the masses (listen to the podcast to learn more about its reach). Listen to Alex describe the power of prediction markets, how he teaches investing, his investing philosophy and the challenges and thrills of developing an online curriculum. Enjoy!

Details:

• 0:00–0:55 Introduction
• 0:56–5:52 Alex’s area of expertise: causation & correlation
• 5:53–8:58 “What’s the probability that… ?” The world through the eyes of an economist
• 8:59–18:01 Robin Hanson’s prediction markets & more on entrepreneurial economics
• 18:02–19:12 Marginal Revolution University (MRU)
• 19:13–19:38 A word from NGPF
• 19:39–21:18 MRU, the “Khan Academy of Economics”
• 21:19–23:52 Teaching in the online world
• 23:53–25:53 The hurdles this course faces
• 25:54–26:24 How Alex measures success
• 26:25–28:12 Favorite videos on their website
• 28:13–33:03 Teaching students about the philosophy of investing
• 33:04–35:40 Incorporating behavioral finance lessons in his classes
• 35:41–38:59 Don’t underestimate the power of compounding
• 39:00–39:42 Alex’s sales pitch for his website
• 39:43–41:09 Conclusion

Resources mentioned:

• Entrepreneurial Economics (textbook)
• Co-founder of the
• Marginal Revolution blog
• Marginal Revolution University, an online platform for teaching economics
• Modern Principles of Economics, co-authored with Tyler Cowan
• Favorite videos:
  • I, Rose (Valentine’s Day video)
  • iPencil essay

QUOTES:

• “It’s very exciting for me as a teacher… Today, it is not at all impossible for a single teacher to teach hundreds of thousands of students all over the world.”
• “What we would like to do, ideally, of course is to partner with a university and use these [MRU lessons] to produce course credits… That would be the next logical step.”
• “What we really emphasize is buy and hold. A diversified… Vanguard index fund. That, to me, is by far the best method of investment.”

About the Authors

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

Danielle Bautista

Danielle is a native of Southern California and a recent graduate from the University of Maine, where she braved the frigid winters—a feat in and of itself—and earned her Bachelor's degree in International Affairs. She has a passion for working with non-profit organizations and serving populations in underprivileged communities. When Danielle isn't writing NGPF blog posts, spearheading various outreach projects, or managing contests and flash surveys, you can find her doing some sort of outdoor activity, learning a new hobby, or cracking what she thinks are witty puns!