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09/11/2015

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Buck Armstrong

Being a business administration major I haven't taken a ton of economics classes prior to this one, so I feel like most of the information in the article was extremely new. That being said, I found that what the World Bank was doing to expand the economics models to take into account how humans think as very interesting. Although there were three main points to how economics models have been wrong in the past, the one that stood out the most to me was the claim that humans think automatically. Obviously in Econ 101, you are taught to believe that humans are rationale decision makers with their best interest in heart. However, the research provided to show that humans often think automatically which in turn is more detrimental to their "utility". In the example, the article discuss the lockbox experiment. However, I was curious to find out what other ways do humans think automatically which is actually hurting us. For example, is the credit card a prime example on why our country is so indebted. Do we subconsciously put off financial thinking since, humans can just use a credit card to purchase items. Clearly, the lockbox example showed that physically saving was much better than just learning about the benefits of saving. Yet, is it the "buy now, pay later" in which humans have failed financially. I don't think humans will care to admit that the choose things automatically, but the world around us has become so automated maybe we have no other option but to keep up.

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