Economists often assume human beings are rational and they make choices and decisions that are in their best interest under a given set of constraints and information. Other breeds of economists, behavioral economists, have discovered that people are, in reality, far from being rational. They are subject to cognitive biases. Recognizing this has tremendous effect on how we design policies, interact with and among each other and generally how we get our acts together to lessen the detrimental effects of some of our irrationality as well as to tap into our potentials for cooperation through altruism and social preferences. I know I have thrown several jargon terms already but I will explain many of them to you.

Leave a Reply