IL45: Where Markets Reveal Human Error ft. Alex Imas
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 712 Ratings
🗓️ 21 January 2026
⏱️ 54 minutes
🧾️ Download transcript
Summary
Today we discuss one of the most popular and influential economic books of the last few decades - The Winner’s Curse. Originally published in 1994, a new version has just been released and we are joined by co-author Alex Imas who wrote the new edition alongside Nobel Prize winner Richard Thaler. When are we likely to spend a windfall and when are we likely to save it? When is it most dangerous to bid for business against competitors? And are ‘arbitrage’ opportunities in markets really a free lunch?
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Episode TimeStamps:
00:00 - Opening remarks and framing the law of one price
01:42 - Introducing the Ideas Lab series and Alex Imas
03:44 - From pre med to behavioral economics
08:15 - Mental accounting and how people really treat money
10:45 - Housing wealth, illiquidity, and self control
15:39 - Savings behavior, capital gains, and inequality
17:11 - Attention, salience, and why nudges work or fail
22:07 - Nudges versus incentives and policy confusion
25:18 - The winner’s curse and common value auctions
30:01 - Auctions, IPOs, and competitive overbidding
33:44 - The law of one price and market mispricing
36:50 - Limits to arbitrage and hidden risks
39:32 - Why mispricing persists even without confusion
43:26 - Why behavioral economics stays outside textbooks
46:53 - What makes decisions difficult and why it matters
Copyright © 2025 – CMC AG – All Rights Reserved
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Transcript
Click on a timestamp to play from that location
| 0:00.0 | There's always other explanations for things that look like violations of law of one price, |
| 0:11.6 | and they probably are violations, but you can't prove it as well as you can when, you know, |
| 0:16.4 | there's really no limits to arbitrage. Like, for example, the 3M case. It's just a smoking gun. |
| 0:22.8 | The way to kind of think about it is that, yes, these are stories, but these are kind of the most |
| 0:28.4 | conservative sort of benchmarks that you can think about, because you've been able to strip |
| 0:33.4 | every other explanation away. And so if you're seeing this violation in this very, very clear-cut case, |
| 0:41.1 | these sorts of violations are probably living all over the place where they can't be identified as clean. |
| 0:47.3 | Imagine spending an hour with the world's greatest traders. |
| 0:51.1 | Imagine learning from their experiences, their successes, their successes, and their failures. Imagine no more. |
| 0:57.4 | Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund managers |
| 1:02.7 | in the world so you can take your manager due diligence or investment career to the next level. |
| 1:08.3 | Before we begin today's conversation, remember to keep two things in mind. |
| 1:12.2 | All the discussion we'll have about investment performance is about the past, and past performance |
| 1:16.8 | does not guarantee or even infer anything about future performance. Also understand that there's |
| 1:22.0 | a significant risk of financial loss with all investment strategies, and you need to request |
| 1:26.6 | and understand the specific |
| 1:28.2 | risks from the investment manager about their product before you make investment decisions. |
| 1:33.0 | Here's your host, veteran hedge fund manager, Nealz Kostrup Larson. |
| 1:42.2 | For me, the best part of my podcasting journey has been the opportunity to speak to a huge range |
| 1:47.8 | of extraordinary people from all around the world. |
| 1:50.7 | In this series, I have invited one of them, namely Kevin Koldine to host a series of in-depth |
| 1:55.8 | conversations to help uncover and explain new ideas to make you a better investor. |
... |
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