once again, tutor2u econs blog. ag "behavioural economics"
First of all, behavioural economics - a field that specialises in studying how our emotions and biases effect our day to day decisions. Behavioural economics is a much more interesting topic than BoP boring stuff, this section is full of examples from real life and you can clearly understand that economics is everywhere. I just couldn't pick the most interesting topics..there were so many of those! I also liked book reviews and advice for further reading.
- for example, they mention a new book "The Mind of the Market", in which it is stated that markets have a collective mind, which drives them. They also provide us an extract from that book. And, surprise-surprise!, it works with the game theory! uhhh I start to like this theory.
- then I found this interesting video. Tim Harford explains the principles of segregation, also known as chessboard experiments of Tomas Schelling. Tim states that the world we live in is sometimes irrational, but people are not:
- then there is more on the game theory
- and here is a post about the book from which Mr. Chris took all those questions about fridges, kamikadze pilots and international model that he gave us in September. by the way, I have a copy of that book and it's really funny.
- and in the end I would like to talk about some more serious stuff. This post is about expectations in economics. Expectations are predictions of people about future market situations, prices, taxes, interest rates etc. Expectations are a really powerful tool and if enough people believe in these expectations they may become real, e.g. become a "self-fulfilling prophecy". From speculative behaviour in commodity markets, to the carry trade in foreign exchange and to expectations of changes in tax policy, how our expectations are formed and the factors that might cause them to change matter a great deal. Students can score higher marks for critical evaluation if they bring in the concept of expectations into their discussions.