FT.com / Comment / Opinion - Magic and the myth of the rational market - The Diigo Meta page

• 25 Aug 09
  

  Jason Welker

  One response to the current crisis has been a rise in the popularity of behavioural economics, which examines the psychological and emotional factors behind transactions. These models drop the assumption of the rational actor yet implicitly keep the same model of economic rationality at their heart. We may diverge from the path of rationality for all sorts of psychological reasons but only because emotion, Keynes’s famous “animal spirits”, clouds our judgment.

  economics rational behavior markets

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