Econowmics Blog

The False Consensus Effect

The False Consensus Effect

The false consensus effect demonstrates an inability of individuals to process information rationally, it suggests that conventional economic analysis of strategic behavior, which assumes unbiased expectation formation, is deficient. A Simple Theory of the...

Amartya Sen

Amartya Sen

Even when altruism is allowed (as, for example, in Gary Becker‘s model of rational allocation), it is assumed that the altruistic actions are undertaken because they promote each person’s own interests; there are personal...

The Ostrich Effect

The Ostrich Effect

  “We know – intellectually – that confronting an issue is the only way to resolve it. But any resolution will disrupt the status quo. Given the choice between conflict and change on the...

Jean Tirole | Photograph by Lydie Lecarpentier - REA - Redux

Jean Tirole: Taming powerful firms

“Wealth acquired by creating value for society is not equivalent to wealth that comes from economic rents. For example, a very important factor in the increasing inequality of wealth in many countries has been...