Big development in economics: "Much of the behavior motivating our most important behavioral theories of risk derive from complexity-driven mistakes rather than true risk preferences." The full paper by Ryan Opera is in the link below. #EconSky
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Matthew Holden 🏳️🌈
Wow! Clever new experiments by Ryan Opera show "loss aversion", the tendency to perceive losses as worse than gains, can be explained by confusion/mistakes due to complexity rather than irrationality. Turns behavioural econ on its head! 🧪 📈 www.dropbox.com/scl/fi/9fk8l...
Comments
I am not an econ person, and my math stops at about 5+6 =11
I read thinking fast and slow, and it seemed to me that many of the experiments required the subjects to have not just absurdly advanced math skills, but also the ability to apply those skills on the fly in a test situation