Category: Behavioural

Behavioural, Economics, International, Politics

Nudges – A Dive into Behavioural Economics

Introduction:  In classical economics, individuals are assumed to be rational decision-makers. Rationality in this case means making choices that result in an optimal level of benefit or utility to the individual making the choice. This view, which is known as ‘homo economicus’, or the economic man, is the portrayal of humans as agents who are consistently rational and narrowly self-interested, and who pursue their ‘subjectively … Continue reading Nudges – A Dive into Behavioural Economics

Unknown's avatarEtonomics1 Comment
Behavioural, Economics, Long Read

Sticky Wages and Prices

In times of economic uncertainty, why do wages and prices often remain ‘rigid,’ even as demand drastically falls or spikes? This phenomenon, known as ‘stickiness,’ is a central concept in Keynesian economics. The father of this section of economics, John Maynard Keynes, argued that without government intervention, mainly fiscal or monetary policies, the rigidity of prices can ’trap’ economies in high unemployment and slow growth … Continue reading Sticky Wages and Prices

Unknown's avatarEtonomicsLeave a comment
Behavioural, Economics, Finance and Markets

The Behavioural Economics of Investment

Human behaviour, especially when it deviates from rational decision-making, has become increasingly significant in the realm of modern investment strategy; traditional economic models’ expectations of rationality no longer paint the whole picture. By applying psychological principles to economic analysis, behavioural economics adds nuance to the investment decision-making framework of individual investors. This interdisciplinary approach creates awareness that investors are subject to cognitive biases, emotions, and … Continue reading The Behavioural Economics of Investment

Unknown's avatarcharliemallozziLeave a comment
Behavioural, Economics

Quantum Economics

In economics today, it is often assumed that human behaviour follows the model of ‘Homo Economicus’ or ‘the economic man’. This refers to a form of behaviour where an individual acts rationally to optimise their own utility, or the total satisfaction gained from the consumption of a good or service. While this approach has stood the test of time, cognitive psychologists have since shown that … Continue reading Quantum Economics

Unknown's avatarmooremaf845bb12f1 Comment
Behavioural, Economics, International

Has Economics Run Out Of New Big Ideas?

Economics is often criticised for being a reactionary science that predicts nothing and only explains its mistakes (Rodrik, 2015). It is rarely credited with discoveries that help society; and in a random survey, most participants did not trust economists (Economics Network, 2017). Instead, economists are criticised for their resistance to change and for limiting the exploration of real-world practical policy solutions. Moreover, it is true … Continue reading Has Economics Run Out Of New Big Ideas?

Unknown's avatarZihan TianLeave a comment
Behavioural, Finance and Markets, International

The Psychology of Investing

It is only recently that the concept of human nature has been applied to economics, yet its impact can be seen everywhere. Contradicting traditional economic theory, it is believed now that human nature is intrinsic in every action we take from the small scale to the large. The recent GameStop trend was fuelled by individual investors taking an opportunity to turn a profit and retaliate … Continue reading The Psychology of Investing

Unknown's avatarSachin ThakrarLeave a comment
Behavioural

Time Preference and Economics of Self-Control

Last year, in the last week of school, I was trapped in a painful dilemma: should I continue revising for that onerous Economics exam or should I flip open the laptop and switch on England’s (not so) dramatic Euro’s Group D decider? Adam Smith back in 1759 would’ve explained my situation as a battle between my passions and my impartial spectator. That is, I found … Continue reading Time Preference and Economics of Self-Control

Unknown's avatarTristan Hand2 Comments
Behavioural, International

Dan Ariely – Modern Behavioural Economics

Behavioural economics has taken the world by storm, aided by catchy and digestible books and superstar researchers. One of the most prominent contemporary figures in the field is Daniel Ariely, the current James B. Duke Professor of psychology and behavioural economics at Duke University. He has authored multiple best-selling books on his research, most famously his ‘irrational trilogy’ of Predictably Irrational, The Upside of Irrationality, and The Honest … Continue reading Dan Ariely – Modern Behavioural Economics

Unknown's avatarJohn Chang1 Comment
Behavioural, Finance and Markets, International

Forever blowing bubbles

Be fearful when others are greedy and greedy when others are fearful. – Warren Buffett Buffett uses this mantra every day, along with his two other ground rules for running his investment firm Berkshire Hathaway: So why does the 90-year-old legendary investor hold these core mantras? One possible answer can be found by considering the history of investment bubbles. One of the first recognised “bubbles” … Continue reading Forever blowing bubbles

Unknown's avatarOllie Weldon2 Comments
Professor Cass Sunstein giving a speech
Behavioural, Interviews, Long Read, Politics, US

An interview with Professor Cass Sunstein: Nudges, economic systems, and freedom

Cees Armstrong and I had the pleasure of interviewing Professor Sunstein, the Robert Walmsley Professor at Harvard Law School. Professor Sunstein is the best-selling author of many books, including the critically acclaimed Nudge, as well as the most cited law scholar of all time. He now works with the US government. Continue reading An interview with Professor Cass Sunstein: Nudges, economic systems, and freedom

Unknown's avatarVimal KamathLeave a comment