Beyond Beta-Delta: The Emerging Economics of Personal Plans

In his book Misbehaving: The Making of Behavioral Economics, Richard Thaler writes about “Supposedly Irrelevant Factors” (SIFs), or factors that observably affect economic decisions but are neglected by neoclassical models of consumer behavior (Thaler 2015). In this article, we highlight an important SIF that is neglected not only by neoclassical models, but also by now-standard behavioral economics models like the beta-delta model of time discounting (Laibson 1997). That SIF is a “personal plan.”Read More

A Nobel Prize-winning psychologist explains why it’s nearly impossible to hire the perfect person for every job

The system he designed required interviewers to measure young men on six dimensions in a specific order, and only then use their intuition to imagine what kind of soldiers the men would make. Sixty years later, the system is still in place – a testament to the power of structured interviews in predicting performance on the job.Read More