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Behavioral Economics

Are Rich People Meaner?

The Huffington Post | Catherine New | Posted 07.05.2012 | Money

The rich are more likely to: a) Cut off other drivers. b) Be disinterested in the welfare of others. c) Cheat on a test to get ahead. d) Give m...

The Paradox of Allais' Effect

Michael R. Powers | Posted 07.20.2012 | Science
Michael R. Powers

In comparing Allais' two counterintuitive observations -- that pendulums behave oddly during eclipses and that human beings behave oddly when making decisions involving uncertainties -- I can't help feeling the former is much more important than the latter.

Myopic Misery: The Financial Cost of Sadness

Wray Herbert | Posted 07.10.2012 | Science
Wray Herbert

Apparently, sadness has the effect of bringing to mind "take the money and run" rationalizations, rapidly and elaborately, which can lead to lousy judgments and real financial losses.

How to Spot a Scoundrel: Fidgeting and Trust

Wray Herbert | Posted 06.26.2012 | Science
Wray Herbert

Since trust and cooperation are so essential to the smooth working of human society, it makes sense that people would have learned over eons both to send signals of trustworthiness and to interpret signs of malicious intent.

The Wrong Policy Prescription for Pakistan's Vaccine Program

Dr. Orin Levine | Posted 05.26.2012 | World
Dr. Orin Levine

Just because legislating immunization coverage works in the United States doesn't mean it will work in Pakistan. The main reason is that the drivers of under-vaccination in Pakistan and the United States are fundamentally different.

Success in the Market: New Rules or Old Brain?

Kevin J. Fleming, Ph.D. | Posted 05.21.2012 | Money
Kevin J. Fleming, Ph.D.

Making meaning is a fundamental brain addiction with a pesky non-discerning quality to it that makes it tough to know when it is serving you and when it isn't. To me this is the only rule one needs to remember.

Shop 'Til You Drop: Will the Economy Take Over the High Street?

Chris Brassington | Posted 04.22.2012 | Business
Chris Brassington

There is little doubt that multichannel commerce is being reborn. The traditional ways of describing multichannel commerce no longer work because cust...

Why Economists Are Right: Rational Expectations and the Uncertainty Principle in Economics -- Part II

David K. Levine | Posted 03.31.2012 | Business
David K. Levine

Rational expectations captures the uncertainty principle in economics: your behavior depends on the theories you believe.

Why Economists Are Right: Rational Expectations and the Uncertainty Principle in Economics -- Part I

David K. Levine | Posted 03.27.2012 | Business
David K. Levine

Much is made of the inability to forecast the current crisis of economics; others say that it arises from the assumption of "rational expectations." On the contrary: it is a fundamental principle that there can be no reliable way of predicting a crisis.

Confusing Virtues: People Who Like a Food's Politics Think It Has Fewer Calories

David Berreby | Posted 03.14.2012 | Science
David Berreby

Ask people how fattening those organic chocolate-covered peanuts are, and they'll guess a lower number than they did for the non-organic version. They'll also eat more than they would have otherwise. The same goes for "low-fat" products.

Occupy Wall Street and the Crisis of Choice

Gabe Zichermann | Posted 01.22.2012 | Politics
Gabe Zichermann

When we start to think of politics as a market-driven activity, and political parties as products we choose to "buy" with our votes, the U.S. system starts to show some basic econometric flaws.

Do Men And Women Cooperate Differently?

Art Markman, Ph.D. | Posted 01.20.2012 | Healthy Living
Art Markman, Ph.D.

If you are trying to create an environment in which people are going to cooperate, you are probably better off fostering an environment of team unity and trust than you are focusing on the gender balance of the group.

The Fine Line Between Shared and Manipulated Medical Decisions

Michael L. Millenson | Posted 01.11.2012 | Business
Michael L. Millenson

Are hard-edged smoking cessation or weight loss programs justified because they help keep down everyone's insurance costs? What is the balance between personal freedom and societal obligations?

Car Buyers Seem to Be Rational to a Fault

Gernot Wagner | Posted 01.03.2012 | Business
Gernot Wagner

Here's the classic economic view of your car-purchasing behavior: You walk into a dealership, choose a car based on brand, color, cylinders, looks and general feel and then start comparing prices among different options.

Is the Economy Clinically Insane?

Max Lugavere | Posted 12.24.2011 | Business
Max Lugavere

We're hard-wired to have a physiological response to the actions observed in others, but are our psychological states mirrored in the outside world, as well?

$75,000 Buys Happiness, Twice as Much Buys More

Gernot Wagner | Posted 09.18.2011 | Business
Gernot Wagner

"Money doesn't buy happiness." Ask anyone who had been slaving away on his desk late last night. Happiness seems to stop going up at $75,000. Make m...

'The Economics Of Happiness'

The Economics of Unhappiness | Jack Stripling | Posted 07.26.2011 | Business

Despite the burgeoning literature on happiness, and the contributions of prominent economists such as Richard Easterlin, Richard Layard, and Andrew Os...

Soaring Prices No Match for Empowered Consumers

Kit Yarrow, Ph.D. | Posted 06.19.2011 | Business
Kit Yarrow, Ph.D.

Consumers shop differently now than they did before the recession. What might have started as a desperate hunt to get more for less turned into greater mastery of the marketplace.

Marketing in the Modern Age

Miles Young | Posted 06.13.2011 | Media
Miles Young

Due to cultural shifts and technological advances in social media, the divide that has separated social and traditional marketing is narrowing significantly. Three trends are at the root of this melding.

The Behavioral Economics of Tax Refunds

Kit Yarrow, Ph.D. | Posted 11.17.2011 | Healthy Living
Kit Yarrow, Ph.D.

Obviously a large refund means you've overpaid your taxes during the year. Yet only 19 percent of Americans receiving refunds plan to reduce their withholdings. Why?

New Stock Market Signal Identifies Bubbles

Wired | Brandon Keim | Posted 05.25.2011 | Business

Complexity researchers who study the behavior of stock markets may have identified a signal that precedes crashes. They say the telltale sign is a me...

The Future of Macroeconomic Policy: Nine Tentative Conclusions

Olivier Blanchard | Posted 05.25.2011 | Business
Olivier Blanchard

We've entered a brave new world in the wake of the crisis; a very different world in terms of policy making and we just have to accept it.

Message To Facebook: I'm Taking Back My Happiness

Amy Gutman | Posted 11.17.2011 | Healthy Living
Amy Gutman

Facebook: Good or bad? Is it nurturing our families and communities by bringing us closer together? Or is it a dangerous threat -- a technology that fosters isolation, anxiety and narcissism?

WATCH: Economist Discusses Why Getting Married Isn't Rational

Posted 10.11.2012 | Business

If pure economics is any judge, marriage is just not rational, an MIT economist argues. The benefits of marriage, according to this new video post...

Dan Ariely Decodes Why Humans Are Hard-Wired to Inflate

Chris Martenson, Ph.D. | Posted 05.25.2011 | Business
Chris Martenson, Ph.D.

Looking back at the bursting of the credit bubble, it's natural to scratch your head and ask "How did we ever let that happen?" Behavioral economics exists to answer questions like this.