- Do you know why we so often promise ourselves to diet, only to have the thought vanish when the dessert cart rolls by?
- Do you know why we sometimes find ourselves excitedly buying things we don’t really need?
- Do you know why we still have a headache after taking a one-cent aspirin, but why that same headache vanishes when the aspirin costs 50 cents?
- Do you know why people who have been asked to recall the Ten Commandments tend to be more honest (at least immediately afterward) than those who haven’t? Or why honor codes actually do reduce dishonesty in the workplace?
- Why do we get overexcited when something is FREE!?
- What role do emotions play in our decisions?
- How does procrastination play games with us?
- What are the functions of our strange social norms? Why do we hang on to false beliefs despite evidence to the contrary?
Our models of human behaviour needs to be rethought.
Human decisions and actions are often divorced from rationality. Hence, by understanding why we fail to reason properly, specifics of our irrational quirks and foibles, we can retrain ourselves to make better decisions.
Between conventional/rational economics and behavioural economics, clearly the human behaviour in markets are unexplainable. This led to a thinking if small decisions are taken one way vs the big decisions in another.
2008 crisis was one of the most depressing times of our history but truly a turning point for behavioural economics. From crisis comes opportunity and this tragedy will allow us to accommodate some new ideas and rebuild better decision making.
- Chapter 1
- Chapter 2
- Chapter 3
- Chapter 4
- Chapter 5