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OPINION30 October 2009

Kahnemanism

The credit crunch has crunched many economic theories around rational expectations and the like… perhaps more emphasis should be put on understanding psychology

The Credit Crunch has crunched many economic theories around rational expectations and the like… perhaps more emphasis should be put on understanding psychology instead.  I would point to the rise of herd instinct, surely the main winner in terms of explaining the events of 2008. Likewise the theories of Professor Kahneman, Prospect Theory, Peak-End Rule and all that; from Keynes to Friedman to Kahneman, where economics goes research must surely follow?

Perhaps we are at the start of a ‘new wave’ in research that takes account of customer psychology – I dare to hope.  This also puts a question in my mind as to where research is going. If rationality ‘alone’ is inadequate, what research models will replace them?

@RESEARCH LIVE

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