Category Archives: Behavioral Economics
The Dry-Cleaning Paradox
When driving, chances are that you, the reader, will fill up at a gas station where petrol is cheap. If you need gas at another point along the road, you may fill up at another station. If a third gas station has cheaper gas, you’ll probably then switch to that one. On the other hand, [...]
Terrorists are Vulgar
The Atlantic recently asked that we refer to terrorists as nitwits. They illustrate what a hapless group of incompetent, ignorant, three-stooges like people these terrorists are, as well as how there is nothing religious about most of them and how they have even been caught getting intimate with cows and donkeys. We are happy to [...]
Reasons not to Invest in Stock, Part 3
In case our first and second parts of this series did not convince you, here is an article from Forbes Magazine, highlighting the mistakes most investors (yes, that means you and I) make when investing. The points it makes echo many concepts that come from Behavioral Economics: Overconfidence. The overconfidence bias states that most people [...]
Why New Year’s Resolutions won’t work
It’s that time of year again. This time you’ve decided to quit smoking, stop eating fast food, take a walk everyday, read a novel per week, etc. etc. Statistically speaking, only 8 percent of you will be able to keep these resolutions. So where’s the problem? First of all, we’re not saying the problem isn’t [...]
