The Situation of Financial Markets
Posted by The Situationist Staff on May 7, 2010
Below the jump you can watch an outstanding and fascinating video episode, “Mind over Money,” by PBS’s NOVA, that asks the question “Can markets be rational when humans aren’t?” and that includes significant segments describing some of the work by Situationist friend Jennifer Lerner.
(We’ve placed the (52 minute) video after the jump because it plays automatically.)
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For more detailed information relevant to the episode, you can click on the following links.
The Disposition Effect
Trust your gut when trading stocks? Do no such thing, argues David Adler, producer of “Mind Over Money.”
The Deciding Factor
A new study at Harvard is exploring how emotions affect our decisions, whether we like it or not.
TV Program Description
Using analysis and experiment, this film explores why economists failed to predict the 2008 crash and why we so often make irrational financial decisions.
Links & Books
Find websites, books, and articles that address the new science of behavioral economics, including key proponents and novel experiments.
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For a sample of related Situationist posts, see “Behavioral Economics and Policy,” “The Methodology of the Behavioral Analysis of Law – Abstract,” “Situating Emotion,” “The Deeply Captured Situation of the Economic Crisis,” and “The Century of Dipositionism – Part I.”
To read some longer law review articles detailing the history of the “competition” between economics, economic behavioralism, and situationism, check out “Legal Academic Backlash: The Response of Legal Theorists to Situationist Insights” (Emory Law Journal, Vol. 57, No. 5, 2008) available on SSRN, “The Situational Character: A Critical Realist Perspective on the Human Animal” (Georgetown Law Review, Vol. 93, 2004) available on SSRN,” and “Taking Behavioralism Seriously: The Problem of Market Manipulation” (New York University Law Review, Vol. 74, 1999) available on SSRN.
Thanks to Situationist friend Julia Lee for sending us this video.