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 […]
Tag: psychology
“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 […]
Supermarkets are, in a sense, large containers of an endless multitude of different types of goods. Among expensive caviar, bubbly champagne, and sugary popsicles, supermarkets hold the much more precious “essential goods”. For this very reason, supermarkets are one step ahead of any other shop: EVERYONE actually NEEDS to go there. Grocery stores have it […]
Remember how often you have done something that felt like going against yourself. Visualize a situation where you have been taken hostage by emotions, led by a blind force that drove your mind through future regrets -it could be a life-changing decision or a daily choice. It has happened to everyone to feel like they […]
If the history of economic thought is a succession of new mainstreams, the current predominant school of thought is undoubtedly Behavioral Economics. Models introducing cognitive limitations of agents are now increasingly spreading and, even in those economic domains where there is more reluctance towards this approach, behavioral considerations are still part of the debate. If the […]
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Why do people procrastinate?
Etymologically, “procrastination” is derived from the Latin verb procrastinare — to put off until tomorrow. But it is more than just voluntarily delaying. Procrastination also comes from the ancient Greek word akrasia, which means doing something against our better judgment. To understand what causes procrastination (outside of conditions such as attention-deficit/hyperactivity disorder, where executive functioning […]
One of the most pivotal changes that unfolded during the past three decades was the reach of markets and market values into spheres of life traditionally held sway over by nonmarket norms. Healthcare, education, public safety, and environmental protection are some examples of the sectors where the use of market logic was for the most […]
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A Guide to Empathy
Empathy is the ability to understand someone else’s feelings and view a situation from their standpoint. Types of empathy include cognitive empathy, emotional or affective empathy, and compassionate empathy. The first relates to understanding how a person feels and why they feel this way. The second refers to the ability to feel someone else’s emotions. […]
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The secret attraction of cults
The world “cult” comes from the Latin “cultus”, meaning “to till or cultivate”. In antiquity it was used to describe the sacrifices, offerings, and monuments built to cultivate favor with the gods, whereas in time, it came to mean any unorthodox religion. It is a known fact how dangerous a cult could be: they may […]
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This can’t be happening to me
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 […]
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