andrewducker (![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
andrewducker) wrote2009-01-17 03:30 pm
andrewducker) wrote2009-01-17 03:30 pm
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Delicious LiveJournal Links for 1-17-2009
A new study in the journal Neuron shows when people hold an opinion differing from others in a group, their brains produce an error signal. A zone of the brain popularly called the "oops area" becomes extra active, while the "reward area" slows down, making us think we are too different.
A modest proposal for calendar reform
Remember that Zimbabwe redemoninated in mid 2008 and took 10 zeroes off the bills, and it hardly seems worth mentioning but they took 3 zeroes off in 2006. That makes this new bill 1,000,000,000,000,000,000,000,000,000 which may or may not be 1 nonillion dollars. It's a lot of zeroes, I may have missed a few one way or another.
Editorial on how rational theories of economics are based on a picture of human behaviour that's badly wrong.
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I would be extremely surprised to find any trained economist who believes or makes decisions based on individuals acting entirely rationally. Nor anyone who believes that real markets are 100% efficient or for that matter believes in the classical model.
Cognitive bias in economic decision making is well documented & has been for a number of years. For many types of decision economists can fairly accurately estimate what 'people' will do, however the impacts of people acting as the agents of larger entities vs individuals acting on their own behalf are going to vary widely.
Likewise the varying effects of regulation, deregulation, tax, exchange, market power differentials etc. etc. have been studied widely. What's tremendously difficult if not impossible is trying to apply this in a meaningful way to the complexity of modern markets.
Even if each party behaves rationally, it's not necessarily the case that the outcome of thoroughly rational self-interest is Pareto efficient or even remotely desirable.
I wouldn't classify any of the above as a 'new' body of thought.
What I think could be argued quite effectively is that governments have been slow to react to increasing market participation & increased complexity. Despite known flaws, something close to free market economics has been seen as the most efficient option & a certain complacency seems to have set in, whereby the impact of changes to those markets (e.g. new instruments & means of spreading risk in particular) have not been fully thought through.
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