Behavioral Finance Economics 437

Anomalies (popular books) “Money Ball” by Michael Lewis “Scorecasting” by Tobias Moskowitz and Jon Wertheim “Thinking: Fast and Slow” by Daniel Kahneman “The Undoing Project” by Michael Lewis

Psychology Research (Collection of articles compiled in books) “Judgment Under Uncertainty: Heuristics and Biases,” by Daniel Kahneman, Paul Slovic, and Amos Tversky “Choices, Values & Frames,” Edited by Daniel Kahneman and Amos Tversky

Engineers and Lawyers 70/30 and 30/70 “Dick is a 30 year old man. He is married with no children. A man of high ability and high motivation. He promises to be quite successful in his field. He is well liked by his colleagues.” Is he an engineer or a lawyer?

Is Steve? Farmer Salesman Airline Pilot Librarian Physician Steve is very shy and withdrawn, invariably helpful, but with little interest in people, or in the world of a reality Is Steve? Farmer Salesman Airline Pilot Librarian Physician

Hmmm? We are in a room of 70 engineers and 30 lawyers Bill is a 30 year old man. He is married with no children. A man of high ability and high motivation, he promises to be quite successful in his field. He is well liked by his colleagues Is Bill more likely to be a lawyer or an engineer?

Representativeness Less is more RGRRR GRGRRR GRRRRR

Here’s an easy one Two hospitals, large one, small one 45 babies born each day in large hospital 15 babies born each day in small hospital On average, 50 % of babies are male Over the course of a year, which has hospital has more days when 60% or more babies born are male? The large one or the small one?

The End