Economic Irrationality - Behavioral Economics

It was one of those watershed moments in science at which you would like to have been present. Last summer in Sonoma, three generations behavioral economists convened at a Master Class run by the Edge Foundation...If you are interested in getting your head around the current global economic meltdown, read through the transcript of this master class once more this autumn. You may not find direct answers, but you will certainly find elements of an explanation. OF GENITAL THIEVES The exploration of economic irrationality By Andrian Kreye ANDRIAN KREYE is the editor of the Feuilleton of Sueddeutsche Zeitung in Munich. He is also an Edge contributor. Andrian Kreye's Edge Bio Page

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OF GENITAL THIEVES The exploration of economic irrationality It was one of those watershed moments in science at which you would like to have been present. Last summer in Sonoma, three generations behavioral economists convened at a Master Class run by the Edge Foundation. Behavioral economics is a field of science that analyzes market dynamics from the consumers' perspective. The three prominent lecturers were Daniel Kahneman, currently a professor of psychology at Princeton, also a Nobel laureate in Economics for his pioneering work in "behavioral economics"; his younger collaborator Richard Thaler, a professor of behavioral science and economics at Chicago, widely considered to be the "father of behavioral economics"; as well as Thaler's highly-regarded former student Sendhil Mullainathan, now a professor of economics at Harvard, who has applied behavioral economics and psychology to the phenomena of poverty. Still more prominent were the students of the class itself, above all because Amazon CEO Jeff Bezos, early Googler and VP Salar Kamangar, Blogger founder and Twitter CEO Evan Williams, PayPal founder Elon Musk, former Microsoft chief technology officer Nathan Myhrvold, and Facebook cofounder and founding president Sean Parker, represented just four of the minds present who have shaped the successful part of the new economy. If you are interested in getting your head around the current global economic meltdown, read through the transcript of this master class once more this autumn. You may not find direct answers, but you will certainly find elements of an explanation. That said, one should not place too much hope in a young science. The larger the number of people who cause an error on a vast if not global scale, the more difficult it is to find conclusive explanatory models. The larger the error, the more surreal the attempted explanation will be. In West Africa, for example, at the beginning of the nineties, a regional recession triggered a wave of superstition. In countries like the Ivory Coast, Burkina Faso and Senegal, the myth of the "voleurs du sexe" made the rounds. Black magicians, according to popular belief, robbed innocent men of their genitals, by chanting magic spells while shaking the hands of their victims. None of these cases of course were ever proven. However, the deadly side effect of the superstition were massive witch-hunts with angry mobs chasing alleged genital thieves across town, finally stoning them to death. ...read more here... http://www.edge.org/3rd_culture/kreye08/kreye08_index.html