Prospect theory, outlined in 1979 by Kahneman & Tversky in what became one of the most cited papers in the social sciences [pdf], is the bedrock of modern behavioral economics. It’s often portrayed in the popular press as the instantiation of a phenomenon we can all intuit: the displeasure from losing $5 is worse than
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There’s a lot of confusion about preferences and why we care about them. Here are five important reminders when thinking about preferences: You can’t measure actual preferences There’s no direct measure for preferences, so we have to use a variety of methods to elicit preferences. Perhaps the strongest way to elicit preferences is to
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Differences between behavioral, experimental, and neoclassical economics
Examples of what they’ve done exceptionally well — and the one flaw I’d change.
I’ve recently started using Foursquare as my default restaurant discovery app, but I couldn’t figure out why. Picking a restaurant is a hard problem, but what had Foursquare done so well? After reflecting on the user experience, I’ve noticed several key design choices that help Foursquare users feel more confident and make faster decisions. Below
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