At first glance, it seems strange to think of psychopaths as decision-makers.

anchoring effect

Classical economic theory can't explain the premium equity puzzle. After all,…

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When it comes to making ethical decisions, human rationality isn't a scientist, it's a lawyer.

The New York City schools have recently begun experimenting with a program that pays students for improving their standardized test scores; initial results have been extremely encouraging. By focusing on immediate rewards, these incentive programs help correct for the immature prefrontal cortices of children and teenagers.

The anchoring effect demonstrates how a single additional fact can systematically distort the reasoning process.

previous decisions. Only 22 percent voted for option C, while 78 percent chose option D, the risky strategy. Most doctors were now acting just like Frank: they were rejecting a guaranteed gain in order to participate in a questionable gamble. Of course, this is a ridiculous shift in preference. The two different questions examine identical dilemmas

loss aversion, which we discussed earlier. The effect helps explain why people are much more likely to buy meat when it's labeled 85 percent lean instead of 15 percent fat.

This developmental process holds the key to understanding the behavior of adolescents, who are much more likely than adults to engage in risky, impulsive behavior. More than 50 percent of U.S. high school students have experimented with illicit drugs. Half of all reported cases of sexually transmitted diseases occur in teenagers. Car accidents are