RICHARD THALER ~ MISBEHAVING ~ 2015

~ SIF ~ Supposedly Irrelevant Factors

~ TMWIWPDFTFCTPEM ~ The Myriad Ways In Which People Depart From The Fictional Creatures That Populate Economic Models

~ TPIWTMBUBE-AMTR-HS-WAFCC-HE-E-CTTFW-HDALOM-A-TMTEMMALOBP-PTCH-SC The Problem Is With The Model Being Used By Economists – A Model That Replaces – Homo Sapiens – With A Fictional Creature Called – Homo Economicus – Econ – Compared To This Fictional World – Humans Do A Lot Of Misbehaving – And – That Means That Economic Models Make A Lot Of Bad Predictions – Predictions That Can Have – Serious Consequences

~ TPOWETRAF ~ The Premises On Which Economic Theory Rests Are Flawed

~ TBUWPMTCANU-TA-C-B ~ The Beliefs Upon Which People Make Their Choices Are Not Unbiased – There Are – Countless – Biases

~ O-MNBIT-ED-BIIAW-EFOHN ~ Overconfidence – May Not Be In The – Economists’ Dictionary – But – It Is A Well-Established Feature Of Human Nature

~ WNAEATDPER-OTATEAROH ~ We Need An Enriched Approach To Doing – Economic Research – One That Acknowledges The Existence And Relevance Of Humans

~ TBOTATEIAE-SNBD-TRUASPFMRM ~ Theories Based On The Assumption That Everyone Is A Econ – Should Not Be Discarded – They Remain Useful As Starting Points For More Realistic Models

~ IYBT-FBATI-A-YAACB-TYCMSM ~ If You Believe That – Financial Bubbles Are Theoretically Impossible – And – You Are A Central Banker – Then You Can Make Serious Mistakes

~ TPRFAHTETITITAOTPMWTT ~ The Primary Reason For Adding Humans To Economic Theories Is To Improve The Accuracy Of The Predictions Made With Those Theories

~ ‘SL’-‘IL’ ~ “Statistical Life” / “Identified Life”

~ T-OC-OSAIWYGUBDI-OCAVAA-WCT-HOAC ~ The – Opportunity Cost – Of Some Activity Is What You Give Up By Doing It – Opportunity Costs Are Vague And Abstract – When Compared To – Handing Over Actual Cash

~ PTALITO-C-N-L-WF-DS-TB-GAL-A-LSMTE-SGFG ~ People Think About Life In Terms Of – Changes – Not – Levels – We Feel – Diminishing Sensitivity – To Both – Gains And Losses – And – Losses Sting More Than Equivalently-Sized Gains Feel Good

~ TIH ~ The Invisible Handwave

~ TINLWTAAACTMTPIRA-OCATMPWSBR-EIMIADH ~ There Is No Logical Way To Arrive At A Conclusion That Markets Transform People Into Rational Agents – One Can Argue That Market Prices Will Still Be Rational – Even If Many Individuals Are Decidedly Human

~ OYUA-BP-YCSIA-BS-IT ~ Once You Understand A – Behavioral Problem – You Can Sometimes Invent A – Behavioral Solution – To It

~ AAPIT-AICOTS-TIAF-L-“P”-WHGIACATF-A-A-D-MC-‘D’-WLFTP ~ At Any Point In Time – An Individual Consists Of Two Selves – There Is A Forward-Looking – “Planner” – Who Has Good Intentions And Cares About The Future – And – A – Devil-May-Care – “Doer” – Who Lives For The Present

~ T-R-T-E/T/E-A-L-IATC ~ The – Reluctance – To – Experiment / Test / Evaluate – And – Learn – Is All Too Common

~ OIAPF ~ Overconfidence Is A Powerful Force

~ WSF? ~ What Seems Fair?

~ A-PG-IOTECCWDTCOAE-A-IIITEAFCI ~ A – Public Good – Is One That Everyone Can Consume Without Diminishing The Consumption Of Anyone Else – And – It Is Impossible To Exclude Anyone From Consuming It

~ PAWTSSOTOMTTALTTWBU-A-TWTP-DPF-R-A-K-RCR-S ~ People Are Willing To Spend Some Of Their Own Money To Teach A Lesson To Those Who Behave Unfairly – And – This Willingness To Punish – Disciplines Potential Free Riders – And – Keeps – Robust Cooperation Rates – Stable

~ L-AR-TAP-A-G-A-P ~ Losses – Are Roughly – Twice As Painful – As – Gains – Are – Pleasurable

~ R(MO)-I-NNNS-TD-GET ~ Rationality (Meaning Optimization) – Is – Neither Necessary Nor Sufficient – To Do – Good Economic Theory

~ IPAL-TTTBMF ~ If People Are Laughing – They Tend To Be More Forgiving

~ OC-NFEATT-A-TUDSWAC ~ Of Course – New Fields Emerge All The Time – And – They Usually Do So Without Any Coordination

~ A-M ~ Anomaly-Mining

~ ‘CC’ ~ “Conditional Cooperators”

~ IWAIWHDAUATHALFAWTCTCOTBC ~ It Was As If We Had Discovered A Unicorn And Then Had A Long Fight About What To Call The Color Of The Beast’s Coat

~ TPIOW-A-S-VW ~ The Price Is Often Wrong – And – Sometimes – Very Wrong

~ IP-MSTIAAMOFTPAAR-TWNSANTTPA-B-OWGTBAP-A-TPSATBFTF-ICMSFP-MTLATWISW ~ If Policy-Makers Simply Take It As A Matter Of Faith That Prices Are Always Right – They Will Never See Any Need To Take Preventive Action – But – Once We Grant That Bubbles Are Possible – And – The Private Sector Appears To Be Feeding The Frenzy – It Can Make Sense For Policy-Makers To Lean Against The Wind In Some Way

~ ‘PD’ ~ “Path Dependence”

~ TGATT-IHTASQ ~ To Get At The Truth – It Helps To Ask Specific Questions

~ SMT ~ Save More Tomorrow

~ LP ~ Libertarian Paternalism

~ A-N-ISSFITETAOAAIB-NAEFH-B-NFE-SEAADTRT ~ A – Nudge – Is Some Small Feature In The Environment That Attracts Our Attention And Influences Behavior – Nudges Are Effective For Humans – But – Not For Econs – Since Econs Are Already Doing The Right Thing

~ ‘PC’ ~ “Prompted Choice”

~ WDWH-WM ~ When Dealing With Humans – Words Matter

~ IYWPTCWSNOR-IIAGSTIT(IT)-TMOPC ~ If You Want People To Comply With Some Norm Or Rule – It Is A Good Strategy To Inform Them (If True) – That Most Other People Comply

~ EN-MBB-TAT ~ Ethical Nudges – Must Be Both – Transparent And True

~ IYWTESTDS-MIE ~ If You Want To Encourage Someone To Do Something – Make It Easy

~ WCD-E-BP-WE ~ We Can’t Do – Evidence-Based Policy – Without Evidence

~ ISC-SI-AS-RTPWMOFTDS ~ In Some Cases – Successful Interventions – Are Simply – Reminders To People Who Might Otherwise Forget To Do Something

~ TOPAOITSCD-EDTCPYW ~ The Only Protection Against Overconfidence Is To Systematically Collect Data – Especially Data That Can Prove You Wrong

~ T-IOE-EE-T-O-CD-A-SP ~ The – Ideal Organizational Environment – Encourages Everyone – To – Observe – Collect Data – And – Speak Up