Archive for October 24th, 2013

What behavioral economics is and what it is not..

October 24, 2013

Matthew Darling, Saugato Datta, and Sendhil Mullainathan write a short note on what behavioral economics stands for.

There are more and more articles, books and websites explaining behavioral economics. But we’ve noticed something in our conversations. As people learn more about behavioral economics, misconceptions creep in. There are three misperceptions we see quite frequently: 
 “Behavioral economics is about controlling behavior…”
 “Behavioral economics is liberal (or conservative)…”
 “Behavioral economics is about ‘irrationality’…”
Just as a sculptor must chip away every part of a rock that is not an elephant, it may be useful to define behavioral economics by what it is not.

Beh eco is not about these three claims:

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How shipping and finance industry make the same mistakes…(buy high and sell low)

October 24, 2013

A reent NBER paper analyses the shipping industry. It is by Robin Greenwood and Samuel Hanson of HBS.

In the recent HBS Working Knowledge section, the authors discuss the paper. They show how shipping industry never learns from its mistakes. It overbooks ships during booms and then ends up paying for the losses in busts. The times are never different.

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Linking decline in German car sales in Greece to massacres in WW-II…

October 24, 2013

A really interesting paper by Vasiliki Fouka and Hans-Joachim Voth of Universitat Pompeu Fabra .

The paper is summarised in voxeu. There is a higher decline in German car sales in those Greek areas where war attrocities by former was higher!

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