Relativity is not just for physics. Nicolae Naumof posts a very good introduction to the foundational concept of relativity in behavioral economics. Through 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 …
Decision-makers perform worse as financial incentives increase Research by behavioral economist Dan Ariely (see video below) found that high financial incentives actually make individuals perform worse than when given low to moderate financial incentives. These results were most dramatic when the tasks involve cognitive elements as opposed to mechanical elements. The reason is that loss …
Do High Salaries & Bonuses Make CEOs Poor Decision-Makers? Read More »
Faculty are great at educating students–just keep them out of meetings. I still view higher education with a bit of an outsider’s lens as I spent the first 20+ years of my career in the “real world” of business. I’ve found higher ed. requires a sense of humor. Moving from a corporation to a university …
The Economics of Fame I have a good friend who loves to tell me I’m going to be famous someday. He seems to think the tipping point is just around the corner. I simply smile and say, “You’re too kind” because I know better. While fame is not something I’ve studied formally, I do have …
The rise of the adult playground (via http://www.scenereleases.eu) Glossy exercise machines are cropping up in parks, near the brightly-coloured swings and slides for children. It’s the latest bit of government “nudge theory”, writes Sophie Robehmed. Kids heading down the slide headfirst, babies talking gobbledygook in the sandpit and a golden retriever bounding…
“‘FREAKONOMICS” was the book that made the public believe the dismal science has something interesting to say about how people act in the real world. But “Nudge” was the one that got policy wonks excited. The book, first published in 2008, is about the potential for behavioural economics to improve the effectiveness of government. Behavioural …
