"Behavioural economics is a relatively new field, one that draws on aspects of both psychology and economics. It has led me to study everything from our reluctance to save for retirement to our inability to think clearly during sexual arousal. It's not just the behaviour that I have tried to understand, though, but also the decision-making processes behind such behaviour - yours, mine, and everybody else's.
...Within the domain of science, these assumptions about our ability for perfect reasoning have found their way into economics. In economics, this very basic idea, called rationality, provides the foundation for economic theories, predictions, and recommendations.
From this perspective, and to the extent that we all believe in human rationality, we are all economists. I don't mean that each of us can intuitively develop complex game-theoretical models or understand the generalized axiom of revealed preference (GARP); rather, I mean that we hold the basic beliefs about human nature on which economics is built.
In this book, when I mention the rational economic model, I refer to the basic assumption that most economists and many of us hold about human nature - the simple and compelling idea that we are capable of making the right decisions for ourselves.
.....In fact, this book is about human irrationality - about our distance from perfection. I believe that recognizing where we depart from the ideal is an important part of the quest to truly understand ourselves, and one that promises many practical benefits."
Introduction, Page xviii
'Predictably Irrational - The Hidden Forces that Shape Our Decisions' by Dan Ariely
...Within the domain of science, these assumptions about our ability for perfect reasoning have found their way into economics. In economics, this very basic idea, called rationality, provides the foundation for economic theories, predictions, and recommendations.
From this perspective, and to the extent that we all believe in human rationality, we are all economists. I don't mean that each of us can intuitively develop complex game-theoretical models or understand the generalized axiom of revealed preference (GARP); rather, I mean that we hold the basic beliefs about human nature on which economics is built.
In this book, when I mention the rational economic model, I refer to the basic assumption that most economists and many of us hold about human nature - the simple and compelling idea that we are capable of making the right decisions for ourselves.
.....In fact, this book is about human irrationality - about our distance from perfection. I believe that recognizing where we depart from the ideal is an important part of the quest to truly understand ourselves, and one that promises many practical benefits."
Introduction, Page xviii
'Predictably Irrational - The Hidden Forces that Shape Our Decisions' by Dan Ariely
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