Beyond Belief: The Science of Economics
In 1979 economics became real science. A few pioneering economists had been experimenting like their psychology research brethren for a few years, risking severe ridicule from the economics establishment. In the end though the fact appeared that prior to behavioral finance economics was theory. Economics was a set of beliefs supported by models and measures.
These interviews with four of those pioneers details the groundbreaking work they did and risks they took to bring economics into the scientific age. Robert Shiller, Yale University; Richard Thaler, University of Chicago; Vernon Smith, Chapman College; Hersh Shefrin, Santa Clara University.
Traditional economics holds that human beings make rational decisions that maximize their current economic benefit. But the real behavior of investors often contradicts
that notion. The enthusiasm of market players that caused the boom/bust cycles
of the Dutch tulip bulb mania, the South Sea Bubble, the Great Crash of 1929,
and the recent technology bubble are prime examples of irrational behavior.
READ THE FULL ARTICLE