Economists Do It With Models

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Entries Tagged as 'Behavioral Econ'

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When Transaction Utility Goes Awry, Starbucks Edition…

May 29th, 2014 · 3 Comments
Behavioral Econ · Buyer Beware

Traditional economic models assume that the utility, or happiness, one gets from consuming an item depends only on how fundamentally useful the item is to the consumer. Under this model, an item’s utility must be independent from the price that the consumer paid for the item, since it’s hard to envision a scenario where the [...]

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Tags: Behavioral Econ · Buyer Beware

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This Year’s Economist Valentinegram…

February 14th, 2014 · 5 Comments
Behavioral Econ

Via a Twitter friend: It’s funny because it’s true, and I’ve been trying to explain this to people for years. (In related news, economists don’t have a reputation for being particularly romantic.) In case you’re not familiar, sunk costs are costs that you’ve already paid and can’t recover- i.e. you can’t get your money back. [...]

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Tags: Behavioral Econ

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An Economist On Christmas…

December 25th, 2013 · 1 Comment
Behavioral Econ · Just For Fun

First off, happy holidays!

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Tags: Behavioral Econ · Just For Fun

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An Implicit Tax Hike On Irrationality, Lottery Edition…

December 13th, 2013 · 11 Comments
Behavioral Econ · Decision Making · Fun With Math

Lots of people like saying that playing the lottery is a bad bet- and it is, mathematically speaking. If you ever need to convince someone of this, allow me to suggest the following argument: Let’s say you had the option to put a dollar into a collection along with 9 other people. One of the [...]

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Tags: Behavioral Econ · Decision Making · Fun With Math

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On Economists Giving Thanks, And The Avoidance Of Arms Races…

November 28th, 2013 · 2 Comments
Behavioral Econ · Buyer Beware · Game Theory · Policy

First off, HAPPY THANKSGIVING! I am very thankful that you all read my online ramblings Once you get drowsy from eating too much Thanksgiving dinner (and no, it’s not the turkey, that’s mostly an urban legend, unless of course you ate the entire turkey), you should feast on what Dan Ariely has to say about [...]

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Tags: Behavioral Econ · Buyer Beware · Game Theory · Policy

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Presidential Medals of Freedom and Hypothetical Conversations of Awkwardness, Kahneman Edition…

November 20th, 2013 · No Comments
Behavioral Econ · Books · Policy

I suppose I am a fairly lazy employee, at least in a typical sense, since I do much of my work at home with the television on in the background. At night, this process generally entails reruns of The Big Bang Theory, since by this point I’ve watched the episodes enough that I don’t feel [...]

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Tags: Behavioral Econ · Books · Policy