Tim Harford has a very nice column called “Dear Economist” in which he responds to questions people email him about economics and daily life (and he writes very clever and interesting answers).
Recently, I started getting lots of email from people with personal questions about kids, illness, jobs and romance — and I would like to propose that if anyone wants their questions about irrationality answered in a public forum (anonymously of course), send them to me (using the link on the right bar), and once a week I will pick a question and do my best to reflect on it on this blog.
Irrationally yours
Dan
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Like The US government is clearly under some pressure to take action in an attempt to stabilize the economy, and as a consequence, recently announced a $150 billion (more or less) stimulus packages that is supposed to rejuvenate the economy and stabilize the market (H.R. 5140 — the Economic Stimulus Act of 2008).
Will the current plan achieve the government’s goals? (more…)
The reactions I get directly from people and indirectly from bloggers to Predictably Irrational are really wonderful, and I am delighted that the book is creating so much interest and discussion. Of course some people have different points of disagreements and other points of view, but this is part of the learning process (and thanks to the discussions and feedback, I am learning a lot). The range of interest in Predictably Irrational is particularly exciting for me. For example this weekend Predictably Irrational was one of the New York Times Sunday Review of Books Editors’ Choice AND it was selected for a discussion in the Sunday service of the Greater Nashville Unitarian Universalist Congregation. What more can I ask for?
Irrationally yours,
Dan
Zubin Jelveh just posted a very interesting blog post relating to Alan Greenspan’s recent piece in the Financial Times.Zubin ends the post by saying:”Just last month, Steve Levitt and John List of the University of Chicago wrote that as neat as the findings of behavioral economics have been over the past two-and-a-half decades, their practical usefulness has remained marginal:
Perhaps the greatest challenge facing behavioral economics is demonstrating its applicability in the real world. In nearly every instance, the strongest empirical evidence in favor of behavioral anomalies emerges from the lab. Yet, there are many reasons to suspect that these laboratory findings might fail to generalize to real markets.
I’d like to add the financial collapse of 2007-08 as Exhibit A.” I am not sure if this is Exhibit A (I think we had a few before), but I do think that it deserves some serious attention and some serious consideration of how to prevent this from happening again. Irrationally yours, Dan
Boston Globe
By David MeheganGlobe Staff / March 18, 2008CAMBRIDGE – We love to be told we’re smarter than we thought we were, but a surprise bestseller by an MIT professor has a less happy message: We’re consistently irrational much of the time. While there’s no cure, there’s hope – if we can learn to outsmart ourselves.more stories like thisThe writer is Dan Ariely, a behavioral economist at MIT and author of the new book “Predictably Irrational: The Hidden Forces That Shape Our Decisions.” It jumped onto The New York Times bestseller list at No. 5, where it remains this week. In worrisome times, we’re eager to understand what makes our economic selves tick. (more…)
By DAVID BERREBY
Published: March 16, 2008
For years, the ideology of free markets bestrode the world, bending politics as well as economics to its core assumption: market forces produce the best solution to any problem. But these days, even Bill Gates says capitalism’s work is “unsatisfactory” for one-third of humanity, and not even Hillary Clinton supports Bill Clinton’s 1990s trade pacts.
Interview by Robin D. Schatz
March 13 (Bloomberg) — Behavioral economists are a fun- loving bunch, to judge from the intriguing new book “Predictably Irrational: The Hidden Forces That Shape Our Decisions.”
One moment author Dan Ariely is observing how sexually aroused male college students answer questions; the next he’s observing how the Ten Commandments affect the propensity to cheat or watching unsuspecting taste testers happily guzzle vinegar-spiked beer.
By David Berreby
Published: March 14, 2008
For years, the ideology of free markets bestrode the world, bending politics as well as economics to its core assumption: market forces produce the best solution to any problem. But these days, even Bill Gates says capitalism’s work is “unsatisfactory” for one-third of humanity, and not even Hillary Clinton supports Bill Clinton’s 1990s trade pacts.
By Russ Juskalian, Special for USA TODAY
Can thinking about an arbitrary number influence how much you’re willing to pay for a computer keyboard, a bottle of wine or a box of chocolates? Apparently so – and the degree of influence may shock you.In Predictably Irrational, Dan Ariely, a professor at Massachusetts Institute of Technology’s Media Laboratory and the Sloan School of Management, put the question to the test in an experiment involving a group of MBA students.
The experiment began with students being asked to write down the last two digits of their Social Security number. When the experiment ended, it revealed a pattern – that students with Social Security numbers ending in the highest-ending digits (80-99) were willing to pay more for items (the wine, the chocolates, etc.) than students with the lowest-ending Social Security numbers (01-20) were willing to pay.
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Anti-economist Dan Ariely says people act in predictably foolish ways
Joseph Brean, National Post Published: Saturday, February 23, 2008
The Martian scientist who descends to Earth to bring fresh perspective to human foibles is a common conceit in everything from anthropology to philosophy, but few scholars ever get to be one.
Dan Ariely, head of behavioural economics at MIT and a fellow of the Institute for Advanced Research at Princeton, came close.
As a teenager in Israel, the accidental explosion of a magnesium flare, used to illuminate battlefields, left him severely burned over 70% of his body, and doomed him to years of painful convalescence.
“I was taken out of the standard life,” he said in an interview yesterday. “I started looking at everything as strange. Why do we hold glasses like this? Why do we give people compliments? Everything was all of a sudden strange. I felt as if I was like a little alien coming and looking at things in a new perspective, and not understanding.”
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