Intertemporal choice is one of the foundational models in economic theory. It sets the human lifetime in just two periods – today and tomorrow – to evaluate how people make choices over time. Generally, an individual can prefer to save money today and spend more tomorrow, or borrow today and spend less tomorrow. Quite often, […]
Tag: psychology
Imagine two ice cream labels: “90% Fat-free” and “Contains 10% fat”. Same product;same message. Still, the first somehow feels healthier than the second. This effect is known as framing -a psychological mechanism through which information presentation shapes the audience’s interpretation and judgment. Framing means selecting and emphasizing specific information elements while omitting others, thereby increasing […]
Article by Nika Vanadze Introduction In theory, public policy should be a rational exercise: gather evidence, assess alternatives, and implement the most effective and equitable solution. In practice, however, policies are shaped by people, and people are not always rational. All humans are influenced by some sort of cognitive biases that will change their behaviour, […]
Screams tore through the early morning silence of Queens, New York. Lights flickered on in nearby windows. Curtains shifted. 28 year old Kitty Genovese was witnessed by nearly 40 individuals being brutally attacked, stabbed and raped to death. And yet, while the attacker returned twice over the next 30 minutes, no one intervened until it […]
Lately, every purchase feels a bit heavier than it should. You’re not buying much more than usual, but your bank balance seems to disappear faster. Maybe you’ve cut back on takeout, or started hesitating before grabbing your favorite snack, and yet things still don’t add up. That’s the strange part about inflation: inflation doesn’t just […]
Why are we not able look away from real life tragedies? What makes true crime so addictive? In this article, I will try to explain why this genre seduces us by exploiting a combination of fear and fascination. The public’s fascination with true crime is not something new, it has deep historical roots, evolving alongside […]
You step into a dimly lit room, the first thing that hits you is the pungent odor, making you slightly nauseous. But your focus is at the center of the room, where a tragic scene is painted before you. The victim’s body is twisted in unnatural angles, signs of their desperate struggle for survival. You […]
Loss Aversion and the Sunk Cost Trap in Venture Capital In the high-risk world of venture capital (VC), balancing the tightrope of innovation and risk is a key skill to master. Knowing when risks have reached their limits can mean the difference between cutting losses and doubling down in hopes of a future payoff. This […]
“Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism” (2009) is a book written by George A. Akerlof, 2001 Economics Nobel Prize winner, and Robert J. Shiller, Economics professor at Yale. In the book, the authors examine the role of emotions and human psychology in shaping economic decisions and […]
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