Behavioural Economics Quotes

We are a society of notoriously unhappy people: lonely, anxious, depressed, destructive, dependent — people who are glad when we have killed the time we are trying so hard to save.

Psychologists tell us that in order to learn from experience, two ingredients are necessary: frequent practice and immediate feedback.

The purely economic man is indeed close to being a social moron. Economic theory has been much preoccupied with this rational fool.

Worldly wisdom teaches that is it is better for reputation to fail conventionally than to succeed unconventionally.

If a measurement matters at all, it is because it must have some conceivable effect on decisions and behaviour. If we can't identify a decision that could be affected by a proposed measurement and how it could change those decisions, then the measurement simply has no value

Of course, coaches are Humans. They tend to do things the way they have always been done, because those decisions will not be second-guessed by the boss. As Keynes noted, following the conventional wisdom keeps you from getting fired.

If a product is perceived as unique but not perceived as useful why would anyone think of buying it ?

Traditional Economics is about how people SHOULD behave Behavioural Economics is about how people ACTUALLY behave

Colonialism and its attitudes die hard, like the attitudes of slavery, whose hangover still dominates behaviour in certain parts of the Western hemisphere. Before slavery was practised in the New World, there was no special denigration of Africans. Travellers to this continent described the inhabitants in their records with natural curiosity and examination to be expected of individuals coming from different environments. It was when slave trade and slavery began to develop ghastly proportions that made them the base of that capital accumulation which assisted the rise of Western industrialism, that a new attitude towards Africans emerged. 'Slavery in the Caribbean has been too narrowly identified with the man of colour. A racial twist has thereby been given to what is basically an economic phenomenon. Slavery was not born of racism, rather racism was the consequence of slavery.' With this racial twist was invented the myth of colour inferiority. This myth supported the the subsequent rape of our continent with its despoliation and continuing exploitation under the advanced forms of colonialism and imperialism.

We don’t have to stop inventing abstract models that describe the behavior of imaginary Econs. We do, however, have to stop assuming that those models are accurate descriptions of behavior, and stop basing policy decisions on such flawed analyses.

Raza : “ The bow and arrow was once the pinnacle of weapons technology. It allowed the great Genghis Khan to rule from the Pacific to the Ukraine. Today-- whoever has the latest Stark weapons rules these lands. Soon it will be my turn “ End of scene Today picture Fortune 500 CEOs whispering to their top men “ Today – whoever has the latest sales weapons rules the world . Soon it will be our turn – thanks to Invisible Selling - Behavioural Economics & More . Get that Rai bloke to train all our guys

2. We can’t do evidence-based policy without evidence.

Most books in the world are written to cure insomnia . This one is to cure inaction

There is nothing common sensical about selling . If that was the case everybody would be a billionaire

Most people including senior sales & marketing professionals in Fortune 500 companies do not know much about the latest evidence based sales strategies

Invisible Selling is like a superpower . It can be used like Superman or like General Zod. I request you to use it like Superman & not like Zod

Past success is not just not a guarantee of future success - it is a strong indicator of future failure because success builds ego & a know it all approach which can be fatal

Like casinos, large corporate entities have studied the numbers and the ways in which people respond to them. These are not con tricks - they're not even necessarily against our direct interests, although sometimes they can be - but they are hacks for the human mind, ways of manipulating us into particular decisions we otherwise might not make. They are also, in a way, deliberate underminings of the core principle of the free market, which derives its legitimacy from the idea that informed self-interest on aggregate sets appropriate prices for items. The key word is 'informed'; the point of behavioural economics - or rather, of its somewhat buccaneering corporate applications - is to skew our perception of the purchase to the advantage of the company. The overall consequence of that is to tilt the construction of our society away from what it should be if we were making the rational decisions classical economics imagines we would, and towards something else.

One overly simplistic idea is that we can improve student performance by just by giving financial incentives to parents, teachers, or kids. Unfortunately, there is little evidence that such incentives are effective, but nuances matter.

The interview started. Hearing a friend tell an old story about you is not an exciting activity, and hearing someone praise you is always awkward. I picked up something to read and my attention drifted— until I heard Danny say: “Oh, the best thing about Thaler, what really makes him special, is that he is lazy.” What? Really? I would never deny being lazy, but did Danny think that my laziness was my single best quality? I started waving my hands and shaking my head madly but Danny continued, extolling the virtues of my sloth. To this day, Danny insists it was a high compliment. My laziness, he claims, means I only work on questions that are intriguing enough to overcome this default tendency of avoiding work. Only Danny could turn my laziness into an asset.

Most people are under the impression that if they know about a subject or an industry they don’t need to understand invisible selling By that logic the guy with the best memory in an industry should be the most successful person in that industry - never happens

Because learning takes practice, we are more likely to get things right at small stakes than at large stakes. This means critics have to decide which argument they want to apply. If learning is crucial, then as the stakes go up, decision-making quality is likely to go down.

This reflects a general tendency. People are more willing to lie by omission than commission. If I am selling you a used car, I do not feel obligated to mention that the car is burning a lot of oil, but if you ask me explicitly: “Does this car burn a lot of oil?” you are likely to wangle an admission from me that yes, there has been a small problem along those lines. To get at the truth, it helps to ask specific questions.

Most people pick up a book without any clear objective . That is why most of them don’t finish reading that book . Most that finish reading a book don’t understand it . Most that understand don’t remember . Most that remember – don’t implement ! & hence most book buyers are just wasting their time !

Thus, they were asking: do higher intelligence test scores from about age 20 predict better educational outcomes, higher social position, and arguably more pro-social behaviours in the thirties? The answer was: they did. They then asked if this was due to (confounded by) parental socio-economic status; it mostly wasn’t.

There is so much confusion about branding even at top levels of The Fortune 500 it makes one wonder how they got successful in the first place ! Brace yourself ! Here is the shortest scientific statement on branding you ‘ll ever hear ! It appears simplistic – I assure you it is anything but . If you really understand it & internalize it – you ll be like an Avenger – a superhero in a herd of weaklings Here it goes ! A successful brand is one that is perceived to be USEFUL & UNIQUE

Economic conditions may differ from period to period, but human psychology is embedded among us and will not change.

rash of suicides caused by the economic breakdown and, according to him, the inconsiderate behaviour of the banks and building societies.

If we’re going to be friends with benefits, I want private health and dental.” Dear

When we were cavemen scarcity of food meant we would die fast . Hence scarcity rings alarm bells of anxiety

So much can be learnt by observing motivations of our ancestors

Literally, time is money. Starting to save now instead of later lessens the amount you will need to contribute.

people are more likely to keep what they start with than to trade it, even when the initial allocations were done at random.

People having a high IQ tend to be good only at certain types of thinking

Want to be a business superman ? Be a favourman !

2 Rules For Success #1 : Never Reveal All You Know

People’s brains have changed & are changing everyday ( & in some ways have remain unchanged for millions of years )

Plenty of people take great pride in their intuition & fail badly . Most of the best decisions in the word have been counter intuitive

Invisible Selling is so non linear that people with a high IQ cannot just stumble upon Invisible Selling They have to study it

Most books just drone on & on till you feel like tearing your hair & blurting out “ Is there a point here ?

People will do anything for FREE – even pay for it !

Traditional economics assumes that every human being has a super computer between his ears , knows everything , analyzes everything & decides logically . No human being works that way

It’s common to associate the ‘goodness’ or ‘badness’ of behaviour with the ‘goodness’ or ‘badness’ of the motivations that drive it. But the nobility or ignobility of individuals’ motivations often bears no relationship, and in some cases even exhibits an inverse relationship, to the nobility or ignobility of the outcomes these motivations create. Sometimes the basest of intentions can produce the best of outcomes.

Most books use simplistic statements like “ Focus on what you want & not on what you don’t want “ or “ To really become rich you need to know how to earn money “ which are silly & don’t tell you what exactly to do

If I were to tell you – I am the only trainer in the world that wears only purple clothes & accessories – I may certainly be perceived as unique but you would think -how would that uniqueness create utility for you ?

When capital has bumped up against limits to profit-growth in the past, it has found fixes in things like colonisation, structural adjustment programmes, wars, restrictive patent laws, nefarious debt instruments, land grabs, privatisation, and enclosing commons like water and seeds. Why would it be any different this time? Indeed, a study by the ecological economist Beth Stratford finds that when capital faces resource constraints, this is exactly what happens: it turns to aggressive rent-seeking behaviour. It seeks to grab existing value wherever it can, with clever mechanisms to suck income and wealth from the public domain into private hands, and from the poor to the rich, exacerbating inequality.

Behavioural economics is an odd term. As Warren Buffett’s business partner Charlie Munger once said, ‘If economics isn’t behavioural, I don’t know what the hell is.’ It’s true: in a more sensible world, economics would be a subdiscipline of psychology.* Adam Smith was as much a behavioural economist as an economist – The Wealth of Nations (1776) doesn’t contain a single equation. But, strange though it may seem, the study of economics has long been detached from how people behave in the real world, preferring to concern itself with a parallel universe in which people behave as economists think they should. It is to correct this circular logic that behavioural economics – made famous by experts such as Daniel Kahneman, Amos Tversky, Dan Ariely and Richard Thaler – has come to prominence. In many areas of policy and business there is much more value to be found in understanding how people behave in reality than how they should behave in theory.

Keynes once wrote: ‘The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems of life and of human relations, of creation and behaviour and religion.

other words, while the behaviour patterns of archaic humans remained fixed for tens of thousands of years, Sapiens could transform their social structures, the nature of their interpersonal relations, their economic activities and a host of other behaviours within a decade or two.

In other words, while the behaviour patterns of archaic humans remained fixed for tens of thousands of years, Sapiens could transform their social structures, the nature of their interpersonal relations, their economic activities and a host of other behaviours within a decade or two.

For four decades, since my time as a graduate student, I have been preoccupied by these kinds of stories about the myriad ways in which people depart from the fictional creatures that populate economic models. It has never been my point to say that there is something wrong with people; we are all just human beings—homo sapiens. Rather, the problem is with the model being used by economists, a model that replaces homo sapiens with a fictional creature called homo economicus, which I like to call an Econ for short. Compared to this fictional world of Econs, Humans do a lot of misbehaving, and that means that economic models make a lot of bad predictions, predictions that can have much more serious consequences than upsetting a group of students. Virtually no economists saw the financial crisis of 2007–08 coming,* and worse, many thought that both the crash and its aftermath were things that simply could not happen.

Think of an untreated sex addict who spends hours every night until the early hours watching pornography on the internet instead of spending that time with their wife or husband, and then becomes so tired due to the late nights that their professional life suffers. The sex addict’s behaviour will cause resentment, destroy trust and create economic insecurities in the family and home.

For instance, the victorious Brexit campaign in Britain and the election of Donald Trump in the United States have both been routinely blamed on the clueless and emotional behaviour of undereducated voters, but you could make equally strong cases that the Remain campaign in Britain and Hillary Clinton’s failed bid for the American presidency failed because of the clueless, hyper-rational behaviour of overeducated advisors, who threw away huge natural advantages. At one point we in Britain were even warned that ‘a vote to leave the EU might result in rising labour costs’ – by a highly astute businessman* who was so enraptured with models of economic efficiency that he was clearly unaware most voters would understand a ‘rise in labour costs’ as meaning a ‘pay rise’.

Harry Potter Vs Lord Voldemort Invisible Selling is like magic . It can be used as if you are Harry Potter or as Lord Voldemort . I request you to use it like Harry & not like Voldemort . Also the understanding of it will protect you from people who use these powerful strategies to hijack your rational brain & sell useless products to you or influence you in a harmful way Hence deploy ethically & protect smartly

Do you remember my friend Fumiko Kobayashi? She loaned me a book by a university professor named Taki Sugiyama Lebra, Japanese Patterns of Behaviour, and she writes that death, particularly voluntary death, is surrounded in this country by a heroic, romantic, aesthetic and emotional aura. She says we often find it hard to communicate and use suicide to make our ideas, or beliefs, or sufferings known. I don't know whether I believe that or not.

What is the good of drawing up, on paper, rules for social behaviour, if we know that, in fact, our greed, cowardice, ill temper, and self-conceit are going to prevent us from keeping them? I do not mean for a moment that we ought not to think, and think hard, about improvements in our social and economic system. What I do mean is that all that thinking will be mere moonshine unless we realise that nothing but the courage and unselfishness of individuals is ever going to make any system work properly. It is easy enough to remove the particular kinds of graft or bullying that go on under the present system: but as long as men are twisters or bullies they will find some new way of carrying on the old game under the new system. You cannot make men good by law: and without good men you cannot have a good society. That is why we must go on to think of the second thing: of morality inside the individual.

Smith did not regard economic freedom as the sum of politics, nor did he believe that self-interest is the only, or even the most important, motive governing our economic behaviour. A market can deliver a rational allocation of goods and services only where there is trust between its participants, and trust exists only where people take responsibility for their actions and make themselves accountable to those with whom they deal. In other words, economic order depends on moral order.

Mainstream economics takes the particular features of capitalism – a very recent form of economic organisation in human history – as if they were universal, timeless and rational. It treats market exchange as if it’s the essential feature of economic behaviour31 and relegates production or work – a necessity of all provisioning – to an afterthought. It also focuses primarily on the relationship between people and goods (what determines how many oranges we buy?) and pays little attention to the relationships between people that this presupposes.

If the State uses this power systematically in order to force the community to accept a particular sort of money whose employment it desires for reasons of monetary policy, then it is actually carrying through a measure of monetary policy. The States which completed the transition to a gold standard a generation ago, did so from motives of monetary policy. They gave up the silver standard or the credit-money standard because they recognized that the behaviour of the value of silver or of credit money was unsuited to the economic policy they were following.

didn’t know how to be mad at people yet, so I just aped the behaviour I had seen at home: speaking to someone in tight, terse little sentences until they went insane. It was how my mother fought with me, how I fought with my younger brothers, and how they fought with their friends. It’s not that we weren’t capable of warmth, as a family. But we were regularly seduced by the concept of being wronged. People were always wronging us. That the most recent economic crisis had devastated my parents’ business and depleted their investments was yet more proof that the world was out to get the Murrays. We were responding, at that time, by giving the world the cold shoulder.

We live in a world where we have to sacrifice our comfort for the sake of others. Where we have to go an extra mile to meet others' needs. Where we have to dig deep in our resources to please others. I have gone out of my comfort zone for some people. Some people have gone out of their comfort zone for me. And I'm grateful. It's life. It's a common thing. There is no right or wrong to this behaviour. We do it because either we want to or that we must. By the way, our self-sacrificing service can be unhealthy to us. Some people burn themselves down trying to keep others warm. Some break their backs trying to carry the whole world. Some break their bones trying to bend backwards for their loved ones. All these sacrifices are, sometimes, not appreciated. Usually we don't thank the people who go out of their comfort zone to make us feel comfortable. Again, although it's not okay, it's a common thing. It's another side of life. To be fair, we must get in touch with our humanity and show gratitude for these sacrifices. We owe it to so many people. And sometimes we don't even realise it. Thanks be to God for forgiving our sins — which we repeat. Thanks to our world leaders and the activists for the work that they do to make our economic life better. Thanks to our teachers, lecturers, mentors, and role models for shaping our lives. Thanks to our parents for their continual sacrifices. Thanks to our friends for their solid support. Thanks to our children, nephews, and nieces. They allow us to practise discipline and leadership on them. Thanks to the doctors and nurses who save our lives daily. Thanks to safety professionals and legal representatives. They protect us and our possessions. Thanks to our church leaders, spiritual gurus and guides, and meditation partners. They shape our spiritual lives. Thanks to musicians, actors, writers, poets, and sportspeople for their entertainment. Thanks to everyone who contributes in a positive way to our society. Whether recognised or not. Thank you. Thank you. Thank you!

Neoliberalism doesn’t want to do away with politics – neoliberalism wants to put politics at the service of the market. Neoliberals don’t think that the economy should be left in peace, but rather they are for the economy being guided, supported and protected through the spreading of social norms that facilitate competition and rational behaviour. Neoliberal economic theory isn’t built on keeping the hands of politics off the market, it’s built on keeping the hands of politics busy with satisfying the needs of the market. It’s not true that neoliberalism doesn’t want to pursue monetary, fiscal, family or criminal policies. It is rather that monetary, fiscal, family and criminal policies should all be used to procure what the market needs.

Unfortunately, the critics of economics have had a tendency to discuss the whole structure as a tissue of misconceptions. It is a critique that fails. The strength of economics is its considerable, if far from complete, understanding of the flows and comparative advantages that underlie trade, jobs, capital and incomes, and the logic of optimising behaviour, all backed by glittering accomplishment in mathematics. That makes it a powerful analytical instrument, so that just a few misconceptions – such as a failure to understand the informal economy or resource depletion – have leverage: like a baby monkey at the controls of a Ferrari, they can turn it into an instrument with extraordinarily destructive potential. If it were a tissue of errors, it would not be dangerous: it is its 90 percent brilliance which makes it so.

while the behaviour patterns of archaic humans remained fixed for tens of thousands of years, Sapiens could transform their social structures, the nature of their interpersonal relations, their economic activities and a host of other behaviours within a decade or two. Consider a resident o Berlin, born in 1900 and living to the ripe age of one hundred. She spent her childhood in the Hohenzollern Empire of Wilhelm II; her adult years in the Weimar Republic, the Nazi Third Reich and Communist East Germany; and she died a citizen of a democratic and reunified Germany. She had managed to be a part of five very different sociopolitical systems, though her DNA remained exactly the same. This was the key to Sapiens' success. In a one-on-one brawl, a Neanderthal would probably have beaten a Sapiens. But in a conflict of hundreds, Neanderthals wouldn't stand a chance. Neanderthals could share information about the whereabouts of lions, but they probably could not tell - and revise - stories about tribal spirits. Without an ability to compose fiction, Neanderthals were unable to cooperate effectively in large numbers, nor could they adapt their social behaviour to rapidly changing challenging. (p. 38)

A government is challenged when its citizens refuse to pay taxes, serve in the armed forces, participate in elections, and so on, and it may meet the challenge either by strengthening its contingencies or by bringing deferred gains to bear on the behaviour at issue. But how can it answer the question: ‘Why should I care whether my government, or my form of government, survives long after my death?’ Similarly, a religious organization is challenged when its communicants do not go to church, contribute to its support, take political action in its interests, and so on, and it may meet the challenge by strengthening its contingencies or pointing to deferred gains. But what is its answer to the question: ‘Why should I work for the long-term survival of my religion?’ An economic system is challenged when people. do not work productively, and it may respond by sharpening its contingencies or pointing to deferred advantages. But what is its answer to the question: ‘Why should I be concerned about the survival of a particular kind of economic system?’ The only honest answer to that kind of question seems to be this: ‘There is no good reason why you should be concerned, but if your culture has not convinced you that there is, so much the worse for your culture.

As the following pages deal with the practising life, they lead - in accordance with their topic - to an expedition into the little-explored universe of human vertical tensions. The Platonic Socrates had opened up the phenomenon for occidental culture when he stated expressis verbis that man is a being potentially 'superior to himself'. I translate this remark into the observation that all 'cultures', 'subcultures' or 'scenes' are based on central distinctions by which the field of human behavioural possibilities is subdivided into polarized classes. Thus the ascetic 'cultures' know the central distinction of complete versus incomplete, the religious 'cultures' that of sacred versus profane, the aristocratic 'cultures' that of noble versus common, the military 'cultures' that of brave versus cowardly, the political 'cultures' that of powerful versus powerless, the administrative 'cultures' that of superior versus subordinate, the athletic 'cultures' that of excellence versus mediocrity, the economic 'cultures' that of wealth versus lack, the cognitive 'cultures' that of knowledge versus ignorance, and the sapiental 'cultures' that of illumination versus blindness. What all these differentiations have in common is the espousal of the first value, which is considered the attractor in the respective field, while the second pole consistently functions as a factor of repulsion or object of avoidance.

Presentism, neglect of the future (along with forgetfulness and contempt for the past) is the paradoxical characteristic of a society and elites who have nothing but the words progress, innovation, modernity on their lips in every domain, including the economic. As soon as one is no longer ‘in love’ as depicted in television shows, as soon as sexual desire fades, one separates from one’s current partner. Marrying for superficial reasons, one separates for superficial reasons. Moreover, this compulsive and immature sort of behaviour is found not only in relationships but also in eroticism and sex in general, always under the sign of speed, immediacy, and instant gratification. Conjugal love and even sex are no longer savoured but consumed or indeed devoured, as if by fire. Despite a form of pseudo-maturity demanded in all domains, especially sexual, and an ideology of liberation, Westerners since the 1960s (the baby boom generation to which I belong) have had difficulty proceeding to the psychological stage of adulthood, that of building for the long-term. This is true even in fields very different to those of sex and relationships, and include those of politics and economics. It is the generalised reign of immaturity and improvidence. Marriage is then conceived as a sort of game, and it ends as soon as one blows the final whistle. Unrestrained enjoyment, the slogan of May ‘68,[27] inspired by a cheap, boorish hedonism, has actually passed into our mores.

All addictions — whether to drugs or to nondrug behaviours — share the same brain circuits and brain chemicals. On the biochemical level the purpose of all addictions is to create an altered physiological state in the brain. This can be achieved in many ways, drug taking being the most direct. So an addiction is never purely “psychological” all addictions have a biological dimension. And here a word about dimensions. As we delve into the scientific research, we need to avoid the trap of believing that addiction can be reduced to the actions of brain chemicals or nerve circuits or any other kind of neurobiological, psychological or sociological data. A multilevel exploration is necessary because it’s impossible to understand addiction fully from any one perspective, no matter how accurate. Addiction is a complex condition, a complex interaction between human beings and their environment. We need to view it simultaneously from many different angles — or, at least, while examining it from one angle, we need to keep the others in mind. Addiction has biological, chemical, neurological, psychological, medical, emotional, social, political, economic and spiritual underpinnings — and perhaps others I haven’t thought about. To get anywhere near a complete picture we must keep shaking the kaleidoscope to see what other patterns emerge. Because the addiction process is too multifaceted to be understood within any limited framework, my definition of addiction made no mention of “disease.” Viewing addiction as an illness, either acquired or inherited, narrows it down to a medical issue. It does have some of the features of illness, and these are most pronounced in hardcore drug addicts like the ones I work with in the Downtown Eastside. But not for a moment do I wish to promote the belief that the disease model by itself explains addiction or even that it’s the key to understanding what addiction is all about. Addiction is “all about” many things. Note, too, that neither the textbook definitions of drug addiction nor the broader view we’re taking here includes the concepts of physical dependence or tolerance as criteria for addiction. Tolerance is an instance of “give an inch, take a mile.” That is, the addict needs to use more and more of the same substance or engage in more and more of the same behaviour, to get the same rewarding effects. Although tolerance is a common effect of many addictions, a person does not need to have developed a tolerance to be addicted.

This is not a hypothetical example. In the middle of the nineteenth century Karl Marx reached brilliant economic insights. Based on these insights he predicted an increasingly violent conflict between the proletariat and the capitalists, ending with the inevitable victory of the former and the collapse of the capitalist system. Marx was certain that the revolution would start in countries that spearheaded the Industrial Revolution – such as Britain, France and the USA – and spread to the rest of the world. Marx forgot that capitalists know how to read. At first only a handful of disciples took Marx seriously and read his writings. But as these socialist firebrands gained adherents and power, the capitalists became alarmed. They too perused Das Kapital, adopting many of the tools and insights of Marxist analysis. In the twentieth century everybody from street urchins to presidents embraced a Marxist approach to economics and history. Even diehard capitalists who vehemently resisted the Marxist prognosis still made use of the Marxist diagnosis. When the CIA analysed the situation in Vietnam or Chile in the 1960s, it divided society into classes. When Nixon or Thatcher looked at the globe, they asked themselves who controls the vital means of production. From 1989 to 1991 George Bush oversaw the demise of the Evil Empire of communism, only to be defeated in the 1992 elections by Bill Clinton. Clinton’s winning campaign strategy was summarised in the motto: ‘It’s the economy, stupid.’ Marx could not have said it better. As people adopted the Marxist diagnosis, they changed their behaviour accordingly. Capitalists in countries such as Britain and France strove to better the lot of the workers, strengthen their national consciousness and integrate them into the political system. Consequently when workers began voting in elections and Labour gained power in one country after another, the capitalists could still sleep soundly in their beds. As a result, Marx’s predictions came to naught. Communist revolutions never engulfed the leading industrial powers such as Britain, France and the USA, and the dictatorship of the proletariat was consigned to the dustbin of history. This is the paradox of historical knowledge. Knowledge that does not change behaviour is useless. But knowledge that changes behaviour quickly loses its relevance. The more data we have and the better we understand history, the faster history alters its course, and the faster our knowledge becomes outdated.

As our emerging self-portrait makes clear, we are motivated by far more than cost and price. So instead of turning first to markets to mediate our social and ecological relationships, the twenty-first-century economist would be wise to start by asking what social dynamics are already in play. What are the values, heuristics, norms and networks that currently shape human behaviour—and how could they be nurtured or nudged, rather than ignored and eroded?

Where did this infamous character come from? His most intimate early portrait was created by Adam Smith in two major works, his 1759 Theory of Moral Sentiments and his 1776 book known as The Wealth of Nations. Today Smith is best remembered for having noted the human propensity to ‘truck, barter and exchange’ and the role of self-interest in making markets work.2 But although he believed self-interest was ‘of all virtues that which is most helpful to the individual’, Smith also believed it was far from the most admirable of our traits, knocked off that top spot by our ‘humanity, justice, generosity and public spirit . . . the qualities most useful to others’. Did he consider humankind to be motivated by self-interest alone? Not at all. ‘How selfish soever man may be supposed,’ he wrote, ‘there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.’3 Furthermore, Smith believed that an individual’s self-interest and concern for others combined with their diverse talents, motivations and preferences to produce a complex moral character whose behaviour could not easily be predicted.

The form of argument used by Farjoun and Machover is rather alien to the tradition of political economy. The later has tended, from its inception, to look for explanations in terms of the actions of rational profit maximising individuals directing the economy towards some sort of equilibrium. Instead Farjoun and Machover, who were mathematicians not economists, imported the form of reasoning that had been used in thermodynamics or statistical mechanics. This branch of physics deals with the behaviour of large complex systems with huge numbers of degrees of freedom. The classical example of this type of system is gas composed of huge numbers of randomly moving molecules. In such a system it is fruitless to try and form a deterministic and microscopic picture of the interaction of individual molecules. But you can make a number of useful deductions about the statistical properties of the whole collection of molecules. It was from the statistical properties of such collections that Boltzmann was able to derive the laws of thermodynamics[Bol95]. What Farjoun and Machover did was apply this form of reasoning to another chaotic system with a large number of degrees of freedom : the market economy. In doing this they initiated a new discipline of study : econophysics. This, in a very radical way, views the economy as a process without a subject. It assumes nothing about knowing subjects, instead it attempts to apply the principle of parsimony. It assumes nothing about the individual economic actors. Instead it theorises the aggregate constraints and and statistical distributions of the system that arise from the assumption of maximal disorder. A such this approach is anathema to the subjectivist Austrian school9.

Prof. Lawrence Krauss writes: “The declaration of a First Cause still leaves open the question, ‘Who created the creator?’ After all, what is the difference between arguing in favour of an eternally existing creator versus an eternally existing universe without one?” Big Bang has proved that this universe had a beginning 13.7 billion years ago. It is not an eternally existing universe. The lifeless matter cannot be conceived as creating itself independently. We use matter and reshape it into different forms to make aeroplanes, rockets, spaceships, skyscrapers and expansive gardens. We, humans, having the power to form and deform matter through construction and destruction can also not be our own creators and this universe. We have barely come to exist since few hundred thousand years ago on this planet. We know and recognize by experience and observation our physical limits and fallibility. Our behavioural contradictions and fallacies are so much well documented that the busiest field in economics these days is behavioural economics.

Climate change is slow, but a cumulative process. Individual human lifespan is only an infinitesimally small fraction of the life of environmental resources and ecosystem services. Hence, the self- centric and this-worldly view of life is incompatible with the concerns of sustainability and socially responsible behaviour. Rather, the dogmatic commitment to self-centric worldview results in the inevitable proliferation of pollution as a right and product to be bought and sold in the market economy. It is ironic, but inevitable to see measures such as ‘statistical value of life’. On the action and policy front in capitalistic democracies, voter ignorance as well as the public-good nature of any results of political activity tends to create a situation in which maximizing an individual’s private surplus through rent seeking can be at the expense of a lower economic surplus for all consumers and producers.

full century on, John Maynard Keynes echoed Mill’s sentiments, asserting (rather wishfully) that ‘the day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems—the problems of life and of human relations, of creation and behaviour and religion’.

The sufferings which some people go through in this world are in some cases a result of morally indifferent behaviour. Lack of social justice, unequal opportunities, extractive socio-economic institutions, socio-political injustice and outright wars have resulted in loss of millions of lives in the modern scientific age. Religion compels pro-social behaviour to avoid sufferings as far as possible and even if the sufferings do occur without human interventions, then religion urges moral action to help the needy and exemplify self-less spirit in dealing with catastrophes. If we leave the faith altogether, then science alone cannot provide any solace and meaning to the people who live their lives in unfair circumstances and who die in vain unjustly.

Chaos should be taught, he argued. It was time to recognize that the standard education of a scientist gave the wrong impression. No matter how elaborate linear mathematics could get, with its Fourier transforms, its orthogonal functions, its regression techniques, May argued that it inevitably misled scientists about their overwhelmingly nonlinear world. “The mathematical intuition so developed ill equips the student to confront the bizarre behaviour exhibited by the simplest of discrete nonlinear systems,” he wrote. “Not only in research, but also in the everyday world of politics and economics, we would all be better off if more people realized that simple nonlinear systems do not necessarily possess simple dynamical properties.

The idea of national economic planning has been deeply discredited. The collapse of the state-socialist system in Eastern Europe and the USSR gave rise to a mood of capitalist triumphalism, which lasted only ten years, and was undermined by the difficulties of ‘transition’, the behaviour of the world capital market, the inequality and unemployment in the capitalist countries, and the depressions in some of them.

He would see no reason why he should accept socially approved standards of conduct and morality, or why he should not indulge all his own self-centred vices. So, at the very moment when men appeared capable of setting up the perfectly organised society, one based upon reason and not imagination, man’s vices would reassert themselves and begin to undermine socially conditioned behaviour. This would reveal itself first of all in demands for increasingly democratic social, economic and political conditions and institutions, and then in a demand for increasingly permissive forms of social behaviour and morality until finally the very notion of morality, of right and wrong, would disappear.

The mistake in setting targets lies in assuming that relationships between variables – in this case a certain measure of the money supply and inflation – are stationary. In the real world, human behaviour responds to attempts at control. ‘The essence of Goodhart’s Law,’ write John Kay and Mervyn King in their book Radical Uncertainty, is that ‘any business or government policy which assumed stationarity of social and economic relationships was likely to fail because its implementation would alter the behaviour of those affected and therefore destroy that stationarity.

If you are perceived to be first ( a uniqueness ) , you tend to be remembered

If you are # 2 nobody knows you & hence nobody cares about you because most industries in the world are winner takes all industries . They are happy buying products from # 1 . They don’t have time to bother about who is # 2

Nobody cares who was the first . People care about who they perceive as the first . If you are the first in an industry but do not make people perceive you to be the first , you might as well have not gotten out of bed

Here is my practical definition of the availability heuristic Whatever is easily available to the brain is taken as true or the only one or the best or the most significant or the most frequent et al

If you are not perceived as unique & useful your potential will always be a cup half full

The availabilty heuristic may be interpreted as “ Being famous IS being persuasive

Most people estimate that accidents & diseases kill people equally . The truth is diseases are 18 times as likely as an accidental death

Poker players explained to me that there’s a particular moment at which players are extremely vulnerable to an emotional surge. It’s not when they’ve won a huge pot or when they’ve drawn a fantastic hand. It’s when they’ve just lost a lot of money through bad luck (a ‘bad beat’) or bad strategy. The loss can nudge a player into going ‘on tilt’ – making overly aggressive bets in an effort to win back what he wrongly feels is still his money. The brain refuses to register that the money has gone. Acknowledging the loss and recalculating one’s strategy would be the right thing to do, but that is too painful. Instead, the player makes crazy bets to rectify what he unconsciously believes is a temporary situation. It isn’t the initial loss that does for him, but the stupid plays he makes in an effort to deny that the loss has happened. The eat economic psychologists Daniel Kahneman and Amos Tversky summarised the behaviour in their classic analysis of the psychology of risk: ‘a person who has not made peace with his losses is likely to accept gambles that would be unacceptable to him otherwise’. Even those of us who aren’t professional poker players know how it feels to chase a loss.

Why do people write complicated books when simple books would help more people & sell more ?

Be as omnipresent as you can . Do not think of the fictional concept of over exposure – no such thing exists in a hyper competitive world

Most people think tornadoes are deadlier than asthma though asthma causes 20 times more deaths

I don ‘t know about you but I am a minimalist . I hate unnecessary stuff because even without them, there are lots of things life throws your way to keep you busy . Hence I do not have the following - A wife - A vehicle - A house ( I stay on rent ) - A fridge - A washing machine - A bed ( I sleep on a yoga mat ) - An air conditioner - A servant ( Very common in Indian households ) among many other things people deem necessary for happiness

Plenty of people think merely having a unique product will automatically make people perceive it as unique . They won’t unless the seller toots its horn all over town about it !

This proves among other things that introspection is sadly inadequate while trying to understand which product could appeal to people

People who think just focussing on the product is enough are known as product oriented rather than marketing oriented . They fall in love with their products & their unique points & think that by some invisible costless automatic phenomenon everyone in the world will know about the uniqueness of their products . Such people normally die poor

Use scarcity or your profits will be scarce

People will be risk-averse for gains, but risk-seeking for losses,

Never make it too easy for your prospects

A pandemic is a complex adaptive system comprising many different components or pieces of information (as diverse as biology or psychology), whose behaviour is influenced by such variables as the role of companies, economic policies, government intervention, healthcare politics or national governance. For this reason, it can and should be viewed as a “living network” that adapts to changing conditions – not something set in stone, but a system of interactions that is both complex and adaptive. It is complex because it represents a “cat’s cradle” of interdependence and interconnections from which it stems, and adaptive in the sense that its “behaviour” is driven by interactions between nodes (the organizations, the people – us!) that can become confused and “unruly” in times of stress (Will we adjust to the norms of confinement? Will a majority of us – or not – abide by the rules? etc.). The management (the containment, in this particular case) of a complex adaptive system requires continuous real-time but ever-changing collaboration between a vast array of disciplines, and between different fields within these disciplines.

Most human beings are irrational most of the time & hence they have weird perceptions of usefulness