Behavioral Economics

The intersection of psychology and economics, behavioral economics looks at human tendencies that involve biology and culture when predicting and explaining economic decision-making.

How a Citigroup Blunder and a Texas Blackout Are Similar

Last August, Citigroup accidentally wired a $900 million payback to some lenders. Now, Texas is experiencing catastrophic power outages and water shortages. Both could be similar. Outdated Infrastructure Citigroup Our story starts in 2016 with a cosmetics company that needed…

What a Difference a Fan Makes…Maybe

This week, during the first five days of the 2021 Australian Open, the stadium was packed…by pandemic standards. It was 50 percent occupied with up to 30,000 fans. Then, authorities declared a snap lockdown because of a Covid outbreak. The…

What Economists Say On Valentine’s Day

About so much more than money, economics can come in handy on Valentine’s Day. Let’s take a look. An Economic Valentine Economic Laws On Valentine’s Day, economic laws are broken. A production possibilities frontier is supposed to illustrate the maximum…

COVID’s Divorce Rate Surprises

I suspect that you (as did I) will  find the newest numbers on the divorce rate rather surprising. Six Facts: Covid Divorce Rates 1. Pre-Pandemic for the U.S. Before the pandemic began, divorce rates had been trending downward:   2.…

How Legos Helped to Build a Vaccination Center

Albrecht Broemme had to figure out the design of Germany’s Covid-19 vaccination centers at two airport terminals, a concert venue, a velodrome, an ice rink, and a convention hall. So, he used Legos. Below, Mr. Broemme is holding a picture…

When Does Money Make Us Feel Good?

In 1974, a University of Pennsylvania economist concluded that there was a happiness plateau. Yes, we feel increasingly good as our income grows. But not beyond $75,000. Called the Easterlin Paradox, even if your earnings continue upward, they don’t bring…

Why Recent Stock Market Fluctuations Are Tough To Explain

Looking at a Covid-19 time table, economic fundamentals, and economic uncertainty, we can try to explain recent stock market fluctuations.

Why a New Year’s Resolution Needs a Staircase

Pondering how to keep our New Year’s resolutions, we can look at the staircase in a Seattle office building.

The Downside of Gift Giving

During the holiday season, our gift giving might have less value than we expect because recipients engage in preference falsification.

The Impact of a Price on Music and Wine

Because of the impact of a price, our opinion of the music from a Stradivarius violin or the taste of a fine wine could change.