Behavioural Science

Daniel Kahneman has passed away , leaving behind a body of work that has significantly influenced how we think about economics and decision-making. Kahneman was not only a pioneering figure in psychology but also a key player in the development of behavioural economics, a field that merges insights from psychology with economic theory to better understand how people make decisions. His collaboration with Amos Tversky was central to his achievements. Together, they introduced ideas that challenged the conventional wisdom of their time. Unfortunately, Tversky passed away before they could jointly receive the recognition many believe they both deserved, notably the Nobel Prize in Economics which Kahneman won in 2002. This partnership was crucial in advancing their research and ideas. Three contributions by Kahneman particularly stand out for me: 1. Behavioural economics: Kahneman played a major role in developing this field, showing how psychological factors affect economic decisions. Thi...

We often hear we lack self-control , but do we truly grasp its meaning? Let's break it down, exploring the perspective of the father of behavioural economics: Howard Rachlin . Intertemporal choices, the decisions we make that involve trading off immediate pleasures for delayed benefits, are often narrated through tales like this: "Faced with the decision of another cigarette, or another Cuba Libre, individuals weigh these choices against the promise of a healthier life." This narrative frames decisions as a trade-off between two positive outcomes -an immediate pleasure and the allure of a better future. However, Howard Rachlin challenged this binary view, suggesting that individuals might interpret the dilemma as a choice between an immediate good (smoking now) and a delayed bad (emphysema). Consider the term "healthier" as vague and abstract. Rachlin's major contribution lies in reframing this narrative. People often give up cigarettes not solely for a ...