Tuesday, January 20, 2009

Happiness and Our Day To Day Decision Making

This is a fun talk about how humans make (or are bad at making) day to day decisions using the equation of expected value = probably of the event * value of the event....it provides evidence that the long standing assumption by economists of humans being utility maximizing rational entities is inadequate. It's not surprise that most recent economics awards have rewarded those exploring behavioral economics - or how people actually behave, not how they should behave. The Q&A period is also interesting and slightly different - there is a quote worth pondering in there - "Our reaction to terrorism has been OUTSIZED'. It makes more sense to deal with poverty than terrorism....it's a bit long, but good fun. Enjoy! Beckmania....
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