Tuesday, October 13, 2015
Phishing for Phools
The volume is Phishing for Phools, authored by two Nobel-Prize-winning economists, George A. Akerlof and Robert J. Shiller. They want us to take behavioral economics more seriously, though their slim volume is intended to entertain as well as inform.
Because people are easily bemused, confused and enticed, the authors believe, free markets need more rules and regulations to function fairly. They're surely right about the human propensity for irrational economic behavior. Whether manipulation and deception is involved is another question. Playing the slots, the authors' first example of irrationality, comes easily to many people. So does the latest gambling craze, fantasy football.
Phishing for Phools is a sign of the times. (I suspect Senator Elizabeth Warren just found the answer to, "What shall I give everybody for Christmas?") For a preview, see Shiller's op-ed in the NY Times. Harvard's Cass Sunstein offers an extensive review here.