The study of behavioral economics really began to develop in the middle and towards the end of the 20th century. Psychologists Amos Tversky and Daniel Kahneman wrote a paper called “Prospect Theory,” which was about how the way choices are presented to somebody is just as important as the choices themselves when an individual is making a decision. Later, Hersh Shefrin and Richard Thaler created a savings model which explains how people do not figure out how much to save and spend to stay at a constant level. People would rather spend more now, because humans prefer gratification in the near future. By 1994, Harvard University hired a professor to teach behavioral economics as its own subject. Now, behavioral economics helps explain many complex things that people do. There are many applications of the research, such as how to make public policy more effective or marketing and advertising applications. Also, there are other areas of study branching off from behavioral economics, like behavioral finance, which deals with how people make investments.
Behavioral economics can explain many different kinds of human actions. Some of the topics within the field are:
Loss aversion/Prospect Theory: People are made more upset by losses than they are made happy by gains of the same amount. This is important for how people think about taking risks. Related is the disposition effect, which is closely related to behavioral finance. The disposition effect is the tendency for investors to hold onto losing stocks too long, and sell winning ones too soon. This concept relates to loss aversion, since the investors are putting off making their losses a reality. Also related is the behavioral economic concept of “status quo bias.” This explains that, against what economics would expect, people seem to like their current state more than any other state they see as different.
Mental Accounting: People have separate mental accounts when it comes to spending and saving. Each mental account has a different degree of willingness to spend connected to it, and people assign activities to mental accounts.
Anchoring/ Status Quo Bias: When given an option automatically, people tend to want to stay with that choice, whether or not that choice is what should be best for them.
Unbounded Selfishness: People are mostly driven by self-interest, and will act in a way which produces the best outcome for themselves.
Unbounded Willpower: Individuals lack self-control. Even when they know what is in their best interest, they tend to act otherwise. People are also somewhat aware of their limited willpower.
Now that behavioral economics is growing in popularity, and more social scientists are researching the topic, ways to apply ideas are becoming more common. If framing a choice a certain way will “nudge,” or push, someone to make a better decision, those who are in charge of creating options can use this to produce a better outcome. These outcomes can range from increasing physical activity to decreasing obesity and changing eating habits, to lessening energy use or to reshaping government policies. In the future, the hope is that through small changes, the public will receive large-scale benefits. In Denmark, the Danish government is employing the concept of anchoring to increase the number of drivers who are organ donors. In the United States, the White House has hired Cass Sunstein, a behavioral economist, to help guide policymakers. Richard Thaler also works in the US Cabinet on the new Behavioral Insight Team. The U.S., as well as Britain, has considered the idea of default options helping increase retirement savings.
One of the biggest arguments economists have against behavioral economics is that much of its research comes from small-scale research data, instead of real world sources. In addition, a lot of behavioral economic researchers use college students in their studies. College students have less experience than normal individuals. Since this population is a poor representation of an average person, data might show different results than it should.
Some psychologists argue that while behavioral economics is a step in the right direction in explaining why people act they way that they do, it is still far behind in research. They feel that it just changed traditional neoclassical economic theory, when they need to look deeper as to what is actually going on a more psychological and intellectual level.
Tropical Storm Thelma
Tropical Storm Thelma was a 1991 tropical storm. Its winds were near 45-50 mph. It killed between 5,000 and 8,000 people in the Philippines. It hit Negros Occidental, Leyte Island, and Vietnam. The storm caused also about $28 million in damage.
After this, the name "Thelma" was not used for tropical storms. It was replaced by "Teresa".
Jos Chabert
Jozef P. A. "Jos" Chabert (16 March 1933 – 9 April 2014) was a Belgian politician for Christen-Democratisch en Vlaams (Christian Democratic and Flemish; CD&V). He was a Minister of State from 24 November 2009 until his death. Before this, he was a member of the Parliament of the Brussels-Capital Region. He was born in Etterbeek, Brussels-Capital Region.
From 1965 to 1976 he was an alderman of Meise.
Chabert died on 9 April 2014 in Brussels, aged 81.
Emilee Wallace
Emilee Wallace (born September 19, 1989) is an American actress.
Wallace began her acting career in 2005. She has appeared in episodes of the television series "Judging Amy" (2005), "Grey's Anatomy" (2006), "Cold Case" (2008), "Boston Legal" (2008), "Glee" (2009, 2013), "Ghost Whisperer" (2010), "Workaholics" (2012), "Rizzoli & Isles" (2012–present). Apart from television work, she also appeared on the television movies "Company Town" (2006) and "Amish Grace" (2010), and her first feature movie "" (2008).
Wallace was born in Oklahoma City and raised in Edmond, Oklahoma. Her brother, BJ (born 1991), is also an actor. She went to California State University (CSU) and now lives in Los Angeles, California.
Fred Kida
Fred Kida (December 12, 1920 – April 3, 2014) was an American comic book and comic strip artist. He was best known for the 1940s aviator hero Airboy and his antagonist and sometime ally Valkyrie during the Golden Age of Comic Books. He was born in Brooklyn, New York City, New York.
Kida died from natural causes on April 3, 2014, aged 93.
Gene Kiniski
Eugene Nicholas "Gene" Kiniski (November 23, 1928 – April 14, 2010) was a Canadian professional wrestler and actor. He became one of the first World Champions in professional wrestling to have a former background in football, after Bronko Nagurski. Kiniski is best known for his time in many different NWA-owned territories where he won multiple championships.
Before starting his wrestling career, Kiniski played football with the Edmonton Eskimos of the Canadian Football League (CFL). On his team, Kiniski was joined by future professional wrestlers Wilbur Snyder and Joe Blanchard. Al Oeming and Stu Hart were at the Eskimos training camp when Kiniski was trying out for the team. Kiniski had a lengthy stint in the World Wide Wrestling Federation (WWWF) in 1964. During his time in the WWWF, Kiniski had matches against Bruno Sammartino and they had a match at Madison Square Garden on November 16, 1964. After he Kiniski thought he had pinned Sammartino on the second fall, he took the championship and left. He was counted out be kept the championship until they had a rematch on December 14.
On April 4, 2010, Jim Ross announced on his blog that Kiniski had "taken a turn for the worse and is battling to stay alive. 'Big Thunder's' cancer has spread to his brain and some speculate that is just a matter of time (before he dies)" Kiniski died on April 14, 2010 in Blaine, Washington.
Harry Melling (actor)
Harry Edward Melling (born 13 March 1989) is an English actor. He is best known for playing Dudley Dursley in the Harry Potter films.