Why cant people just follow the rules? A look at the biases behind irrational behaviour in the midst of a pandemic Over the past few decades, behavioural economics has exploded as a field of study, not only enriching basic economic models, but also yielding novel insights into the cognitive predispositions of humans. In fact, these […]
Financial bubbles is one of the topics in economics that are intuitive to most people, except for economists. A financial, or speculative bubble, is characterized by a rapid increase in prices of an asset, without much consideration for its intrinsic value, followed by a burst, that is, a sudden reduction in prices. Seems simple enough, […]
Thinking, Fast and Slow is the book that every behavioural economics enthusiast should read at least once in their lifetime. The author is nothing less than Daniel Kahneman, the psychologist awarded with the Nobel prize in economics in 2002 for his work on human judgement and decision making under uncertainty, which combines psychological research with […]
Think back to any movie you’ve seen involving a disaster, whether it was a tsunami or a plane crash. More than likely, the footage of the actual disaster was accompanied by hordes of people screaming and running for their lives. As with many Hollywood depictions of various events, however, the reality of things is quite […]
We all have that one prideful friend that just can’t admit they were wrong. But is it truly just pride? Research suggests that our ability to recall past predictions we’ve done may not be as good as we would like to believe [1][2]. So maybe your friend is not simply unable to admit they have […]
For more than three decades now, “microloans” have been all the rage in international development. The idea is simple: by giving a small loan to someone living in a poor country, you could help them expand a small business, which would lift their family out of poverty. When they pay back the loan, the money […]
Imagine you are presented with four cards that have a number on one side and a letter on the other (as in Figure 1). You are also provided with a rule: if a card shows a vowel on one face, then its opposite face shows an even number. Which card(s) would you turn to check […]
In the classic economic model, the measure of utility is presumed to be the key to understanding agent’s decision-making. However, most factors concerning the study of utility are assumed to be exogenous. The emergence of the field of behavioural economics has sought to challenge that by drawing insights on the endogenous factors that affect that […]
One of the greatest headaches of tax authorities is simply to get people to pay their taxes, preferably on time. People tend to view taxes as a punishment, instead of them funding public services. Benjamin Franklin is credited to have said “Nothing is certain except for death and taxes”, yet some still try to avoid […]
In the 21st century, the chances of encountering fairy-tale romances are rare. That cute guy or girl you locked eyes with at the bar the other day fades into a distant memory as we become less likely to initiate contact with strangers. This attitude can be explained through understanding the conduct of the conscious brain. […]
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