ACX
Your Book Review: The Laws of Trading
A review of 'The Laws of Trading' by Agustin Lebron, examining trading principles and their broader applications to decision-making and life.
44 min read 6,685 words
A thread through the archive
behavioral economics
Essays tagged “behavioral economics”. Follow an idea across the archive.
Essays on behavioral economics
8 essaysACX
On Hreha On Behavioral Economics
Scott Alexander argues that despite some replication failures, the core of behavioral economics remains valid and valuable, with the field continuing to evolve and refine its understanding of human decision-making.
47 min read 7,248 words
SSC
Financial Incentives Are Weaker Than Social Incentives But Very Important Anyway
Scott Alexander critiques an NYT article on the weakness of financial incentives, arguing that they remain crucial as a counterweight to powerful social incentives.
11 min read 1,611 words
SSC
SSC Journal Club: Expert Prediction Of Experiments
A study on expert prediction of behavioral economics experiments finds that experts have only a slight advantage over non-experts, suggesting that a separate 'rationality' skill may be more important than specific expertise.
12 min read 1,729 words
LW
Interlude for Behavioral Economics
Scott examines experimental data on how people actually behave in Prisoner's Dilemma and Ultimatum Game situations, finding that people use various heuristics like tit-for-tat and fairness considerations rather than purely rational strategies.
12 min read 1,742 words
LW
Prospect Theory: A Framework for Understanding Cognitive Biases
Scott explains prospect theory, Kahneman and Tversky's model of how people actually make decisions, showing how its value and probability weighting functions predict numerous cognitive biases including loss aversion, scope insensitivity, and framing effects.
8 min read 1,202 words
LW
Time and Effort Discounting
Scott explains time and effort discounting through examples like candy placement affecting consumption, argues that hyperbolic discounting creates preference reversals, and suggests these are better understood as reward functions rather than true preferences.
9 min read 1,315 words
LW
Beware Trivial Inconveniences
Scott explores how small inconveniences can powerfully shape behavior, from China's Great Firewall to rebate forms to credit card spending, and discusses policy implications including opt-out government programs.
8 min read 1,094 words