A gambler walks into MGM Grand, pockets swollen with $10,000. He converts his cash to chips and finds a seat. After playing poker for an hour, he understands the play style of his opponents. Feeling comfortable, he examines his middling five-card hand, considers the odds, and folds. As the day drags on, the same dealer deals our gambler the same five cards with the same odds against the same people at the same table. Does he fold? Kahneman’s insight is…it depends. Continue reading “It Depends: The Kahneman Frame of Mind”
Tag: Behavioral Economics
Richard Thaler: What the Nudge?
You know what really gets an economist excited? Models. Continue reading “Richard Thaler: What the Nudge?”
Gary Becker: Why You Are A Criminal
Why do seemingly “normal” or “rational” people break the law and become criminals? Is there an explanation for why people commit seemingly stupid crimes? Continue reading “Gary Becker: Why You Are A Criminal”
George Allais: Take a Gamble With Me
Whenever I went to my mom’s office growing up, often they would collectively buy tickets for the mega millions jackpot in New York. Almost 22 years later and no one from the office has gotten the lucky numbers, how cruel! Continue reading “George Allais: Take a Gamble With Me”
Be Happy: Don’t Split The Tab
Paying for stuff has some weird psychological effects on people. Paying a little extra to minimize these effects is economically efficient. Continue reading “Be Happy: Don’t Split The Tab”
Herbert A. Simon: Navigating the Maze
Recently, I embarked on a long road trip. When you spend more than five hours on the road, eventually you have to make a stop for lunch or dinner. How do you decide where to eat? You could make a “safe” bet and stop at a fast food joint, or you can try the local cuisine by stopping at an unknown eatery. I usually choose the latter, which has led to some bad experiences. Safe to say, I’ve made some bad choices despite my noticing the broken door handle, overgrown landscape, and questionable folks in the parking lot. Continue reading “Herbert A. Simon: Navigating the Maze”
