Behavioural Economics: Psychology, neuroscience, and the human side of economics (Hot Science)

"The controversial science that claims to have revolutionised economics. For centuries, economics was dominated by the idea that we are rational individuals who optimise our own 'utility'. Then, in the 1970s, psychologists demonstrated that the reality is a lot messier. We don't really know what our utility is, and we care about people other than ourselves. We are susceptible to external nudges. And far from being perfectly rational we are prone to 'cognitive biases' with complex effects on decision-making, such as forgetting to prepare for retirement. David Orrell explores the findings from psychology and neuroscience that are shaking up economics - and that are being exploited by policy-makers and marketers alike, to shape everything from how we shop for food, to how we tackle societal happiness or climate change. Finally, he asks: is behavioural economics a scientific revolution, or just a scientific form of marketing?"-- Publisher's description A decade after the financial crisis, there is a growing consensus that economics has failed and needs to go back to the drawing board. David Orrell argues that it has been trying to solve the wrong problem all along. Economics sees itself as the science of scarcity. Instead, it should be the science of money (which plays a surprisingly small role in mainstream theory). And money is a substance that turns out to have a quantum nature of its own. Just as physicists learn about matter by studying the exchange of particles at the subatomic level, so economics should begin by analysing the nature of money-based transactions. Quantum Economics therefore starts with the meaning of the phrase ‘how much’ – or, to use the Latin word, quantum. From quantum physics to the dualistic properties of money, via the emerging areas of quantum finance and quantum cognition, this profoundly important book reveals that quantum economics is to neoclassical economics what quantum physics is to classical physics – a genuine turning point in our understanding. "A decade adfter the financial crisis of 2007-2008, it's clear that economics had failed and needs to go back to the drawing board. David Orrell argues thatr we can use the insights of quantum theory to create a 'real-world' economics that works for us all. Surprisingly, mainstream economists barely mention the role of money, but money is in fact a complex quantum system. Just as a quantum physicist will tell you that a subatomic particle doesn't have a fixed location or momentyum until someone takes a measuremenmt of it, a quantum economist will say that your house has a value but no actual price until somebody buys it. Quantum mechanics shopws tat the universe is far more unpredictable than had been supposed. Similarly, quantum economics presenst an economy that is notr efficient, fair and stable, but complex, entangled and creative, and that tends toward inequity and instability - very much like the world we live in."--Back cover. "A decade after the financial crisis of 2007-2008, it's clear that economics had failed and needs to go back to the drawing board. David Orrell argues that we can use the insights of quantum theory to create a 'real-world' economics that works for us all. Surprisingly, mainstream economists barely mention the role of money, but money is in fact a complex quantum system. Just as a quantum physicist will tell you that a subatomic particle doesn't have a fixed location or momentum until someone takes a measurement of it, a quantum economist will say that your house has a value but no actual price until somebody buys it. Quantum mechanics shows that the universe is far more unpredictable than had been supposed. Similarly, quantum economics presents an economy that is not efficient, fair and stable, but complex, entangled and creative, and that tends toward inequity and instability - very much like the world we live in."--Amazon.com When Economyths was first published in 2010, David Orrell showed how mainstream economics is based on key myths such as fair competition, rational behaviour, stability and eternal growth – and how these myths lead paradoxically to their opposites: inequality, an irrational economy, financial instability and a collision with nature's limits. Since then, we've had Occupy, political upheaval, flash crashes in financial markets, the warmest few years in recorded history – and a growing chorus demanding fundamental reform. So how has economics responded? In this revised and expanded edition, Orrell shows how the ten myths still dominate economics. He reveals their roots in thought that goes back to the ancient Greeks, making them hard to dislodge. And he uncovers, demolishes and develops an alternative to the greatest economyth of all – the one that will lead to the collapse of orthodox economics. When Economyths was first published in 2010, David Orrell showed how mainstream economics is based on key myths such as fair competition, rational behaviour, stability and eternal growth - and how these myths lead paradoxically to their opposites: inequality, an irrational economy, financial instability and a collision with nature's limits. Since then, we've had Occupy, political upheaval, flash crashes in financial markets, the warmest few years in recorded history - and a growing chorus demanding fundamental reform. So how has economics responded? In this revised and expanded edition, Orrell shows how the ten myths still dominate economics. And in a new final chapter, he uncovers, demolishes and develops an alternative to the greatest economyth of all - the one that will finally lead to the collapse of orthodox economics. The author outlines how mainstream economics is based on myths such as fair competition, rational behavior, stability, and eternal growth - and how these myths have lead paradoxically to their opposites: inequality, an irrational economy, financial instability, and a collision with nature's limits. In the early twenty-first century, the world has seen the Occupy movement, political upheaval, flash crashes in financial markets, the warmest few years in recorded history - and a growing chorus demanding fundamental reform. So how has economics responded? The author argues that the ten "economyths" still dominate economics. The author also proposes an alternative to the greatest economyth of all - the one that may finally lead to the collapse of orthodox economics.--adapted from back cover This book is written from the perspective of the applied mathematician, David Orrell. He states that economics is a mathematical model of human behaviour and the economy is dangerously unstable and unbalanced, and the risk models are unreliable.--[From introduction] The emerging science of quantum economics can help us create a 'real-world' economics that actually works for us all A brand-new edition of David Orrell’s acclaimed critique of what economics gets very wrong