As has been well-documented in academic research, people are by no means rational. In their book ‘Nudges’, Thaler and Sunstein famously describe two types of thinking: system 1 and system 2. The former is a more automatic method involving quick judgement calls which are more prone to irrationality, while the latter is much more deliberate, and less prone to external influences. From the moment we … Continue reading Nudges: Will they work forever?
Money is often the driving factor in our decision making. That comes with its dangers. Continue reading Monetary incentives
From Greek mythological characters to Fortune 500 executives, it seems as though no human is immune to complacency. Why? Continue reading The Icarus Paradox: Success will burn you
In 1974, Daniel Kahneman and Amos Tversky exposed a blatant fault in our judgement under uncertainty Continue reading Feminism, gambling and the fat-free
What can twenty toddlers teach us about economic recessions? A lot more than you may think Continue reading Babies = Depression
The Nobel Prize-winning economist, Maurice Allais, posed this famous paradox in a 1953 Econometrica article. It led to the discovery of one of the most significant notions in behavioural economics today: loss aversion. Continue reading The Allais Paradox: Explained
Rationality in economics is described to be a decision-making process of an economic agent that seeks to maximise utility. To best understand the notion of rationality in economics, it is best to compare it to rationality in a more psychological sense: the quality of being able to think sensibly or logically. This comparison highlights that rationality in economics is more concerned with the outcome of … Continue reading What is Rationality in Economics?
Tension between the United States and North Korea has reached a stage where missile strikes have become an alarming possibility. If tensions escalate further to a state where military action looks almost certain, game theory could offer us insight into finding the best strategy to tackle the problem. Firstly though, what does Kim Jong Un hope to achieve by possessing a nuclear arsenal? It is … Continue reading The US v. North Korea: The role of game theory
Entertainment software firms are changing business models to send profits into game-changing territory Continue reading Electronic Arts: An example in business model innovation
Sandel makes it very clear in his book, What Money Can’t Buy, that he is a philosopher. You might expect Sandel, as the book is a meticulous analysis of the free market – an entirely economic concept – and its effects on society, to at least explore economic thought and reasoning, but he is scornful of it; he likes to distance himself from it throughout. … Continue reading “What Money Can’t Buy” by Michael J. Sandel
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