Cass Sunstein’s book — The World According to Star Wars — is a must for Star Wars fans who are also interested in behavioral economics/law/public policy. This is probably a surprisingly big intersection. What do we find out about Star Wars and the US constitution? Star Wars: Why? I must confess to not seeing the appeal of…
Category: Assumptions
Improving Forecasting
Philip Tetlock’s book on expert political judgment was a classic. That said, he clearly thinks that the message taken from that book was too strong. Previously he suggested that experts just aren’t that good at forecasting. He still retains that theme in his new work — but now he is more interested in improving forecasting. Improving Forecasting…
How Managers Decide
My second delve into Richard Thaler’s Misbehaving concerns managerial decision making. How managers decide is a massively important topic. Equilibrium Conditions Don’t Describe Any Point In Time Economic models often study equilibrium conditions. These apply where no manager will want to change their decision. Given they model this some academics seem to think that this describes…
The Gauntlet Of Attacks On Behavioral Economics
Richard Thaler‘s Misbehaving may be one of my favorite academic books. The author packed the book with interesting thoughts, covers numerous important ideas, and even is amusingly candid about his colleagues. Over the coming months, I’ll occasionally cover his key points (see here and here). In this post I’ll discuss “the gauntlet”; a list of predictable…
Should We Get Rid Of Irrationality? Perhaps, What Is Irrationality?
Dan Ariely is a very enjoyable writer and an excellent researcher. That said I find his central theme of “irrationality” a problem. It is hard to know what people mean when they talk about irrationality. My central question is: What Is Irrationality? Advice To The Irrational In his advice book, Irrationally Yours, readers ask Ariely…
Crossing Chasms and Anecdotal Evidence
Geoffrey Moore‘s book, Crossing the Chasm, has been a hugely popular book in the marketing strategy area. I can see why. Moore has a clear thesis, the examples are interesting, and the topic important. Unfortunately Crossing the Chasm has a plausible story but no more. Crossing the chasm is just an anecdote, a good anecdote…
Decision-Making In The Real World
Phil Rosenzweig is a contrarian. You can tell he enjoys disagreeing with people. The Halo Effect was a great read that targeted strategy researchers. His new book , Left Brain, Right Stuff, is an attack on decision research. It focuses on decision-making in the real world. Positive Comments The book has many good points and…
What Getting A Cab In The Rain Tells Us
In 1997 a collection of the great and the good on the behavioral side of economics investigated a seemingly minor question. What getting a cab in the rain tells us. Cleverly they used this minor question to consider the assumptions of traditional economics. The four authors, Colin Camerer, Linda Babcock, George Loewenstein, and Richard Thaler,…
The Tragedy of Common Sense Morality
Joshua Greene uses the Tragedy of Common Sense Morality as a central theme in his book — Moral Tribes. His suggests that our brains are actually surprisingly well adapted to solve the tragedy of the commons. In the tragedy of the commons, our personal incentives to behave uncooperatively cause disaster for everyone. Greene calls this…
The Balanced Scorecard
Today’s post is about a classic of business literature. The Balanced Scorecard from Robert Kaplan and David Norton is an approach to business strategy. It is hard to argue with the basic idea that businesses should regularly monitor a variety of success factors and report how they are succeeding on each factor. Four Perspectives In…
