Are our decisions based on the influence of irrelevant factors?

With gentle persuasion, humans will act a little more like the rational beings economists think we are.

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12th May, 2012

Economists have long assumed individuals try to do what they judge best, but from the 1970s a notion of “super-rationality” became popular. This assumed that decision-makers took everything into account and made optimal choices. This assumption simplified some otherwise tricky mathematics, but its greatest attraction was its politics. If someone is making decisions in her or his best interests, what justification is there for intervention by the state to change the outcome? Need the Government do anything? Economists were criticised for assuming this extreme rationality. Probably their ...

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