Posted by The Situationist Staff on January 28, 2010
Thomas Brennan and Andrew Lo recently published their interesting paper, titled “The Origin of Behavior,” on SSRN. Here’s the abstract.
* * *
We propose a single evolutionary explanation for the origin of several behaviors that have been observed in organisms ranging from ants to human subjects, including risk-sensitive foraging, risk aversion, loss aversion, probability matching, randomization, and diversification. Given an initial population of individuals, each assigned a purely arbitrary behavior with respect to a binary choice problem, and assuming that offspring behave identically to their parents, only those behaviors linked to reproductive success will survive, and less reproductively successful behaviors will disappear at exponential rates. This framework generates a surprisingly rich set of behaviors, and the simplicity and generality of our model suggest that these behaviors are primitive and universal.
* * *
You can download the paper for free, here.
Posted in Abstracts, Behavioral Economics | Tagged: Behavioral Finance, evolution, loss aversion, Probability Matching, Risk Aversion, Risk Preferences | 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).
* * *
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 »