Tag Archives: Richard Thaler

Paraphrasing that nineteenth-century critic of political economy, we might say that “economic decision-making appears, at first sight, a very trivial thing, and easily understood. Its analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties.” We might credit Thaler and other behavioral economists, then, for having taken a first step in challenging the traditional neoclassical account of rational decision-making. But they stop...

[unable to retrieve full-text content]The Econ Nobel Announcement, AKA I FINALLY CALLED IT FOR ONCE…: It’s the one day where everyone is talking about what I teach- just let me have this, ok? =P

Explanation of why expected utility theory is "an ex-hyoptheis."  Actually, there is a lot more wrong with it such hypotheses used as assumptions in the construction of homo economicus, and the exportation of homo economicus from theory to practical use. Homo economicus is a theoretical construct used to simplify the complexities of human behavior for use in an economic model. But human behavior is not limited to economics other than in quite specialized cases, where it is reasonable...

A lot of pseudo-problems arise from confusion about use of terms, especially when key terms are ambiguous. For example, "capital" can be either financial or non-finanacial ("real" or actual).  "Investment" has two different meanings. Financial "investment" is portfolio wealth held as financial instruments a form of savings in contrast to real goods like real estate, physical precious metals, and collectibles like art. "Savings" denotes a stock, and "saving" denotes a flow....