Behavioral economics and the related field, behavioral finance , study the effects of social, cognitive , and emotional factors on the economic decisions of individuals and institutions and the consequences for market prices , returns , and the resource allocation .
RICHARD THALER: Here is the way Sendhil Mullainathan and I have thought about the day and a half that we have here. We have a pretty good idea of what we would like to do for the first three of our six sessions.
Kahneman & Tversky
In 1996, Lyle Brenner, Derek Koehler and Amos Tversky conducted a study involving students from San Jose State University and Stanford University. The researchers were interested in how people jump to conclusions based on limited information. Previous work by Tversky, Daniel Kahneman and other psychologists found that people are “radically insensitive to both the quantity and quality of information that gives rise to impressions and intuitions,” so the researchers knew, of course, that we humans don’t do a particularly good job of weighing the pros and cons. But to what degree? Just how bad are we at assessing all the facts?
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When Kahneman put this question to a few hundred physicians, seventy-two per cent chose option A, the safe-and-sure strategy. Most doctors would rather save a certain number of people for sure than risk the possibility that everyone might die. The U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people.
Let’s go through the books, and you can tell me what’s important about them and why you like them. The first one on your list is The Invisible Gorilla: How Our Intuitions Deceive Us , by Christopher Chabris and Daniel Simons . These are the guys who did one of the most important pieces of research in social science, which is to show how little we actually see in the world around us.
Robert B. Cialdini is Regents’ Professor Emeritus of Psychology and Marketing at Arizona State University .
With rendition switcher Question: What is procrastination? DAN ARIELY: Procrastination is basically a simple term for a deep problem with human nature and the problem has to do with time. We live in the here and now but what’s good for us is often long in the future. And we have plans in the future. We will save money, and we would eat healthily, and we would exercise and we would do this and we would do that and we will do all that.
We live in a time of information abundance, which far too many of us see as information overload. With the sum total of human knowledge, past and present, at our fingertips, we’re faced with a crisis of attention: which ideas should we engage with, and why? Big Think is an evolving roadmap to the best thinking on the planet — the ideas that can help you think flexibly and act decisively in a multivariate world. A word about Big Ideas and Themes — The architecture of Big Think Big ideas are lenses for envisioning the future. Every article and video on bigthink.com and on our learning platforms is based on an emerging “big idea” that is significant, widely relevant, and actionable.
Most psychologists will read this “Questionnaire” with Robert Cialdini, PhD.
Behavioural Economics Applied
Feast and Famine