Why do poor people make bad decisions?

In their new book,┬áScarcity: Why Having Too Little Means So Much, economist Sendhil Mullainathan and psychologist Eldar Shafir team up to tackle the question of how scarcity impacts decision-making behavior. Scarcity of money can actually cause poor decisions, as can scarcity of time, calories, or friends. The remarkable finding of the book is just how […]

This is your brain on advertising

It’s well known that focus groups aren’t very reliable. Perhaps they’re a bit better than monkeys throwing darts, but conventional wisdom says not to put too much trust in a focus group when designing an advertising campaign. The conventional wisdom is only half-right. You shouldn’t put much trust in a focus group…unless you’re scanning their […]

Reciprocity Trumps Self-Interest. It Also Explains Why We Disagree About Human Nature.

Some of the more interesting research in behavioral game theory has looked at why people depart from the move that would maximize their self-interest. There are two main possibilities: either they are self-interested but they’ve miscalculated; or they care about the other player’s outcome in addition to their own. (More concisely they are either being […]