3 ms·

Do you mind giving an example?

• mcguire 9y ago
  In Misbehaving, Richard Thaler describes a meeting of psychologists where he describes the best current thinking of economists as to what a "rational" person would do if the government were to give a payment to all citizens as an economic stimulus. I don't remember the details, but it involves the recognition that a citizen would have to pay the money back (as taxes) at some point, and that the citizen would have descendants in perpetuity---as a result, the economic stimulus would fail because the citizen would lock the payment into a 0-risk savings account. He had to have another economist at the meeting reassure everyone that that was indeed the current best economic thinking in order to stop them from laughing at him. He recalls telling the story to Some Fameous Economist and being told that (a) yes, that was the most rational thing to do in that situation, and (b) that it was indeed what everyone would do.