Sublime

If people were perfectly rational agents, if the brain weren't so bounded, then writing down the last two digits of their Social Security numbers should have no effect on their auction bids. In other words, a student whose Social Security number ended with a low-value figure (such as 10) should be willing to pay roughly the same price as someone

Daniel Kahneman, Jack L. Knetsch, and Richard H. Thaler, “Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias,” Journal of Economic Perspective 5, no. 1 (1991): 193– 206, http://users.tricity.wsu.edu/~achaudh/kahnemanetal.pdf

The point of these studies is that moral judgment is like aesthetic judgment. When you see a painting, you usually know instantly and automatically whether you like it. If someone asks you to explain your judgment, you confabulate. You don’t really know why you think something is beautiful, but your interpreter module (the rider) is skilled at

But in real life, most things aren’t logical – they are psycho-logical.

If people were perfectly rational—if they made decisions solely by crunching the numbers—then subjects would always choose to invest, since the expected overall value on each round is higher if one invests ($1.25, or $2.50 multiplied by the 50 percent chance of getting tails on the coin toss) than if one does not ($1). In fact, if a person invests

The different choices in the two frames fit prospect theory, in which choices between gambles and sure things are resolved differently, depending on whether the outcomes are good or bad. Decision makers tend to prefer the sure thing over the gamble (they are risk averse) when the outcomes are good. They tend to reject the sure thing and accept the

They were the economist Amos Tversky and the psychologist Daniel Kahneman. Together, the two launched the field of behavioral economics—and Kahneman won a Nobel Prize—by showing that man is a very irrational beast. Feeling, they discovered, is a form of thinking.

I]t is self-evident that people are neither fully rational nor completely selfish, and that their tastes are anything but stable.”