Economy
Narges Hajimoladarvish
Abstract
The Fundamentals of behavioral economics and finance by Ali Saidi and Seyed Mohamad Javad Farhanian was first published in 2012 and the second edition was out in 2015. While the book covers a wide variety of subjects in behavioral economics and finance, it fails to logically connect the materials together ...
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The Fundamentals of behavioral economics and finance by Ali Saidi and Seyed Mohamad Javad Farhanian was first published in 2012 and the second edition was out in 2015. While the book covers a wide variety of subjects in behavioral economics and finance, it fails to logically connect the materials together within a broader context. The authors neither provided theoretical foundations nor investigated applied aspects of behavioral economics and finance systematically. Furthermore, a good deal of materials is translated from English. The authors provide a list of behavioral biases followed by prescriptions to fight against them without proofing that increasing information cause behavior change. This is not consistent with an evidence-based approach to behavioral economics and finance. Moreover, the existence of personal and unproven prescriptions in the book is simply unscientific that undermines the credibility of behavioral economics and finance.
Economy
Narges Hajimoladarvish
Abstract
Nudge introduces libertarian paternalism approach through empirical evidence on the behavioral biases in decision making and the impact of environment on them. The libertarian paternalism approach, which is called nudge, is any aspect of choice architecturing that changes people’s behavior ...
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Nudge introduces libertarian paternalism approach through empirical evidence on the behavioral biases in decision making and the impact of environment on them. The libertarian paternalism approach, which is called nudge, is any aspect of choice architecturing that changes people’s behavior in a predictable way without changing any options, hence, retaining individuals’ freedom of choice. Because there is no neutral context, the authors argue that paternalism is inevitable. In such a situation, public policy can nudge people towards making better decisions that are also superior in the future. The authors suggest that experts should be hired to make sensible choices. In addition to problems of adverse selections by experts, the main challenge of libertarian paternalism is unstable preferences and inevitable choice between desirable outcomes in long run over short run. In the light of enormous amounts of attention absorbed by the Nudge that is apparent in several translations in Farsi, this paper tries to review and scrutinize the libertarian paternalism approach.
