Along with his fellow behavioral economists
, Thaler is reinventing individual psychology.
were among the first to consider human irrationality in decision making.
Those findings probably would not surprise behavioral economists
But that would be falling for the sunk cost fallacy that behavioral economists
talk about, of allowing past actions to dictate future ones when they should not matter anymore.
argue, however, that these sophisticated processes are well beyond the intellectual and analytical capacity of typical market participants and do not reflect the actual decision-making of the human players in the market.
Through an understanding of these factors, behavioral economists
develop theories about human behavior, run real-world experiments to validate their hypotheses, and offer solutions.
It's not even just technology, but science--data scientists and even behavioral economists
and other critics of the predictivist model of economics should read this book to understand that there is no general consensus between economists regarding the unification of the domain around a core of similar assumptions, one of the most important being its predictive power (Thaler, 2015).
4) These anomalies constitute observed behavioral deviations from the predictions of neoclassical economic theory, and behavioral economists
have sought to explain the sources of such anomalous choices by identifying and cataloging a variety of cognitive limitations and psychological biases.
Many behavioral economists
believe that you are far more likely to be persuaded by the first offer.
The behavioral economists
came to these conclusions based on what they regard as more plausible assumptions about human behavior, validated to some extent by empirical evidence coming primarily from laboratory experiments but sometimes from field experiments or observational studies.
But, for now at least, behavioral economists
like Akerlof, Shiller, Richard Thaler, and Matthew Rabin seem to be leading the field.