Posted by The Situationist Staff on May 7, 2010
Below the jump you can watch an outstanding and fascinating video episode, “Mind over Money,” by PBS’s NOVA, that asks the question “Can markets be rational when humans aren’t?” and that includes significant segments describing some of the work by Situationist friend Jennifer Lerner.
(We’ve placed the (52 minute) video after the jump because it plays automatically.)
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Posted in Behavioral Economics, Choice Myth, Emotions, Ideology, Neuroeconomics, Neuroscience, Video | Tagged: Behavioral Economics, economics, emotion, Gary Becker, heuristics and biases, irrationality, Jennifer Lerner, law and behavioralism, markets, rational economics, rationality, Richard Thaler | Leave a Comment »
Posted by The Situationist Staff on October 3, 2008
From AtGoogleTalks (54 minutes):
Ori Brafman and his brother Rom Brafman visit Google’s Mountain View, CA headquarters to discuss Ori’s book “Sway: The Irresistible Pull of Irrational Behavior.” This event took place on June 13, 2008, as part of the Authors@Google series.
Why is it so difficult to sell a plummeting stock or end a doomed relationship? Why do we listen to advice just because it came from someone “important”? Why are we more likely to fall in love when there’s danger involved? In Sway, renowned organizational thinker Ori Brafman and his brother, psychologist Rom Brafman, answer all these questions and more.
Drawing on cutting-edge research from the fields of social psychology, behavioral economics, and organizational behavior, Sway reveals dynamic forces that influence every aspect of our personal and business lives, including loss aversion (our tendency to go to great lengths to avoid perceived losses), the diagnosis bias (our inability to reevaluate our initial diagnosis of a person or situation), and the “chameleon effect” (our tendency to take on characteristics that have been arbitrarily assigned to us).
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From FORAtv (54 minutes)
Posted in Behavioral Economics, Book, Choice Myth, Uncategorized, Video | Tagged: Behavioral Economics, chameleon effect, diagnosis bias, irrationality, loss aversion, Ori Brafman, Rom Brafman, Sway | Leave a Comment »
Posted by The Situationist Staff on May 14, 2008
Sarah F. Brosnan, Owen D. Jones, Susan P. Lambeth, Mary Catherine Mareno, Amanda S. Richardson, and Steven Schapiro, posted their article, “Endowment Effects in Chimpanzees” 17 Current Biology, 1704-1707 (October 9, 2007) on SSRN. Here’s the abstract.
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Human behavior is not always consistent with standard rational choice predictions. The much-investigated variety of apparent deviations from rational choice predictions provides a promising arena for the merger of economics and biology. Although little is known about the extent to which other species also exhibit these seemingly irrational patterns of human decision-making and choice behavior, similarities across species would suggest a common evolutionary root to the phenomena.
The present study investigated whether chimpanzees exhibit an endowment effect, a seemingly paradoxical behavior in which humans tend to value a good they have just come to possess more than they would have only a moment before. We show the first evidence that chimpanzees do exhibit an endowment effect, favoring items they just received more than items they prefer that could be acquired through exchange. Moreover, we demonstrate that – as predicted – the effect is far stronger for food than for less evolutionarily salient objects, perhaps due to historically greater risks associated with keeping a valuable item versus attempting to exchange it for another. These findings suggest that the larger set of seeming deviations from rational choice predictions may be common to humans and chimpanzees, and that the evaluation of these through a lens of evolutionary relevance may yield further insights in both humans and other species.
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To read about a related paper, see “A New Theory of the Endowment Effect.”
Posted in Abstracts, Behavioral Economics, Choice Myth, Uncategorized | Tagged: behavioral biology, Behavioral Economics, chimpanzees, economics, endowment effect, evolutionary analysis in law, evolutionary biology, irrationality, Law, property, prospect theory, rationality | 1 Comment »