Mainstream and behavioural economics are two sides of the same coin
The term ‘economics’ tends to incite a lot of passion. For many people it typifies a cold, emotionless perspective on life that just looks at money. It represents the cynical world view of those who, as Oscar Wilde said, “know the price of everything and the value of nothing”.
There…
Our morality is not quite so black-and-white as we sometimes like to believe
One of my earliest memories, I must have been four or five, is when my mother, to her embarrassment, forgot her hairdresser’s appointment. As she rang to make a new one, she made up an excuse for missing it, involving a wholly fictitious sudden illness of my baby sister. “Isn’t…
Sometimes what we do seems to be unduly influenced by what appears to be utterly futile. Is that as unwise as it seems?
Last Saturday was Luka’s 6th birthday. We had some balloons to decorate the house, and for just £1 my wife had bought a self-assembly garland with cardboard flags spelling “Happy Birthday”. But when we opened the pack, all it contained was just enough letters to make the word “pitday”. …
Both doubt and confidence have benefits, but is there anything worthwhile in overconfidence?
It is the season of party conferences in Britain. Over the years I have lived here, my attitude towards them has evolved from interest to irritation, and on to indifference. …
How to turn an unfair price rise into a fair one
This last week, the UK has been experiencing a freak petrol* crisis. A handful of filling stations on the south coast had run out of fuel because of minor supply issues. The news led to a vicious circle of spreading panic buying, dozens more stations running dry, even more panic…
We respond to incentives, that is true — but not always in the way that might be expected
An insight to which I often return is the following economic observation, from Steven Landsburg’s The Armchair Economist: “People respond to incentives. The rest is commentary.” It has an irresistible simplicity, and it’s not hard to find plenty of evidence for it: positive incentives make a choice more attractive, and…
Is it irrational to favour people with whom you have something important in common?
Imagine the prime minister of your country is not someone you naturally align with: in fact, you’d rather see him or her defeated at the next election. But then you suddenly learn that your PM is a life-long supporter of the same football team that you have been a fan…
Markets enable prices to reach a level that satisfies both sellers and buyers, but that doesn’t necessarily mean that they see that price in the same way
Do you know what a kilo of brown rice costs, a 350g pot of salt, or a pack of four sponge wipes? If you are like me (and I do the weekly shop!), in all likelihood the best you can do is give a pretty wide price range for these…
We often assume we are entitled to something, but that is literally only half of the story
Years ago, my (British) colleagues and I had what we thought was a brilliant idea for a practical joke. We were in a French chateau, at a debriefing session concluding a large international project with ten Germans on the team. …
When a renowned behavioural scientist gets embroiled in a case of fabricated data, there may be some lessons for us all
When a behavioural science paper is discovered to have been using fraudulent data, the field understandably experiences some mild, but distinct tremors. If the co-author who was responsible for the data happens to one of the field’s most famous scientists, the tremor becomes a proper shockwave. …
