Welcome to the home of Noah Brier. I'm the co-founder of Variance and general internet tinkerer. Most of my writing these days is happening over at Why is this interesting?, a daily email full of interesting stuff. This site has been around since 2004. Feel free to get in touch. Good places to get started are my Framework of the Day posts or my favorite books and podcasts. Get in touch.

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What Separates Psychology and Economics

Yesterday I posted a link to the Michael Lewis profile/review of Daniel Kahneman’s new book. Since yesterday I’ve repeated this little nugget on how Kahneman discovered behavioral economics three times and thought it was worth sharing:

I can still recite its [a 1970s paper on the psychological assumptions of economic theory] first sentence: “The agent of economic theory is rational, selfish, and his tastes do not change.”

I was astonished. My economic colleagues worked in the building next door, but I had not appreciated the profound difference between our intellectual worlds. To a psychologist, it is self-evident that people are neither fully rational nor completely selfish, and that their tastes are anything but stable.

It’s a nice way to think about the difference between psychology and economics.

November 9, 2011 // This post is about: , ,