Bellerbys Economics - Mr Stephenson

Saturday, October 07, 2006

Bellerbys Students - Totally Irrational!!

Microconomics is based entirely on a myth - that people and businesses always make rational decisions.

The truth is that we don't. One of the biggest areas of Economics is Behavioural Economics, looking at the way we really make decisions. This should be of particular interest to those of you thinking of applying to Cambridge and Warwick - the two leading universities in this field in the UK.

This article from Newsweek provides a useful introduction:

http://www.msnbc.msn.com/id/5570554/site/newsweek/

A more detailed analysis of this field can be found in an excellent Wikipedia introduction here:

http://en.wikipedia.org/wiki/Behavioral_economics

Several of the most recent Nobel prizes for Economics have been awarded in this area - especially where it looks at the way in which Behavioural Economics meets Game Theory.
You may wander why we sometimes play games in Economics - the stock market game, the international trading game and sometimes smaller games to sharpen decision-making skills. Well, the answer is that this topic is at the very heart of modern Economics - Life, it's a funny old game, isn't it?

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