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Markets provide strong incentives for firms to cater to the demands of consumers, and firms will compete to meet those demands, whether or not those demands represent the wisest choices.
Richard H. Thaler • Nudge: The Final Edition
imagine that Joe Sixpack offered to sell you a CDS on your $320,000 loan to your friend for $1,600 a year for five years. Joe is doing well, has a million-dollar house with no debt, and is therefore “good for the money.” Happy with $1,600 a year in extra income, Joe continues to sell CDSs on residential mortgages. Unregulated, he sells a thousand j
... See moreEdward O. Thorp • A Man for All Markets
Those most adept at profiting from a particular market are often least likely to notice when the game is over, and probably the least psychologically prepared to profit from the successor market.
Eugene Linden • The Mind of Wall Street: A Legendary Financier on the Perils of Greed and the Mysteries of the Market
law of unintended consequences.
Stephen J. Dubner • SuperFreakonomics
ideology, ignorance, and inertia—the
Abhijit V. Banerjee • Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty
In the market, prices may occasionally follow the lead of the worst investors. They are the ones making most of the trades.
Nate Silver • The Signal and the Noise: Why So Many Predictions Fail-but Some Don't
Dr. Jekyll and sometimes Mr. Hyde. As a producer he wants inflation (thinking chiefly of his own services or product); as a consumer he wants price ceilings (thinking chiefly of what he has to pay for the products of others).
Henry Hazlitt • Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics
Chapter Four: Incentives