Sublime

Loss Aversion in Education

• Teachers receiving bonuses upfront, with potential loss, performed better than those with end-of-year bonuses.


• Loss aversion motivated the prepaid teachers, resulting in a 10% improvement in student grades.

Another common error in the psychology literature concerns what is called “mental accounting.” The Thorp, Kelly, and Shannon school of information theory requires that, for an investment strategy to be ergodic and eventually capture the return of the market, agents increase their risks as they are winning, but contract after losses, a technique

And they are instantiated as a distributed processing system on human beings. They don’t particularly care about human beings. Their motives are inscrutable, to the extent that they have any, except that they’d like to get bigger. They’ve run on people. They’re implemented on people. But they are not people. They are not persons in any meaningful

The big advantage of physicists—I think Doyne Farmer may have once said this to me—is not what they have learned, the tools. It’s how they have learned to think. In particular, physicists are quite good at being very, very broad, taking tools from all over the place. That is something that economists are very, very remiss in. It is a b—tch to try

pioneer of modern portfolio theory

Mathematically, there is an optimal way to play such games, but it assumes that players are strangers who will never meet again (i.e. you and that secondhand car salesman). Dutifully, the students produced the optimal solution. But most of the players in the ethnographic societies did not. They either accepted offers that were far too low or

The best mental models I have found came through evolution, game theory, and Charlie Munger. Charlie Munger is Warren Buffett’s partner.