January 7, 2008

  • Here's a brief but excellent article in the NY Times examining the main differences in economic philosophy between Barack Obama and Hillary Clinton.

    The article's brevity means that it helps to have a working familiarity with basic economic theory, and also to have a preexisting familiarity with behavioral law and economics. I think the article could have included a couple extra sentences fleshing out some of these ideas for readers without much of a background in this area.

    In a nutshell, traditional economics relies on the assumption that individual actors will behave rationally. In this case rational behavior is loosely defined as behavior that will lead to the best outcome for the actor, given the information available. Behavioral economics challenges this assumption, studying why people may not act in a so-called 'rational' way in certain circumstances, often by employing psychology.