Rethinking the Economy

Recently NPR ran a piece about the impact behavioral economists — the folks who argue that people aren’t calculators — are having on the Obama administration. NPR gave a sample of the dizzying amount of hard empirical research backing up behavioral economics, then asked, “So why would economists assume that human beings are so hyper-rational?” [...]

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As we saw in the last post, one reason computerizing healthcare records can be a disaster is that the people designing the software don’t pay attention to how people will actually use it.
Some software designers argue that the way to avoid this mistake is to use “user-centered design.” Don’t assume that nurses in a hectic [...]

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There’s one thing Democrats and Republican politicians agree on when it comes to healthcare reform: digitizing healthcare records could be a godsend. When it works, it can improve patient care, reduce medical errors, and save billions of dollars a year — a crucial consideration given the threat that skyrocketing healthcare costs pose to our economic [...]

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Most economists start from the same assumption about organizations that they make about people: they are rational and make well-informed, calculated decisions based on their self-interest.
You might ask, did these economists ever have a real job? If so, were they taking Acid or Ecstasy most of the time? How did they get the idea that [...]

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When most economists talk about the economy, they start from the assumption that people are calculators. If you want to understand how the economy works, they say, pretend that people are rational and that they have all the info they need to make a decision. Take a gazillion people making decisions in their rational self-interest, [...]

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