relativity

Relativity in Behavioral Economics

Relativity is not just for physics.

Nicolae Naumof posts a very good introduction to the foundational concept of relativity in behavioral economics. relativityThrough two examples he describes how we use mental references, environmental factors, and comparisons to make what are sometimes less than purely rational decisions.

From Naumof:

The pond effect shows us that people don’t evaluate size of the carp as being 50cm per se, but rather as being a big or a small fish compared with its environment and fellow fish.”

Click here to read the entire article on relativity in behavioral economics

 

 

 

 

 

 

 

 

 

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