Humans make choices they believe will provide the greatest satisfaction according to their subjective values with the information they have on hand. These values are not only unique to each individual, they are unique to the circumstances under which a good or service is experienced.
Your friendly economists' take on New Year's Resolutions.
Ask the average person about her smartphone, and the odds are better than even that she’ll be able to recite the make, model, and salient features such as battery life and camera quality. She may even be in a position to rank the phone relative to other handsets and to make a recommendation as to … Continue reading Do Financial Regulations Decrease Financial Literacy?
By Andrew M. Baxter 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 … Continue reading It Depends: The Kahneman Frame of Mind
You know what really gets an economist excited? Models. Not these kind. Well, I'm sure some economists like these models. Ah, that's better. Models are a tool to easily reference and generalize the world around us. However, this may come as a surprise to some of you, so sit down. Our world is messier … Continue reading Richard Thaler: What the Nudge?