Discussion: Is it rational to be rational?
Business Finance
Watch the following interview:
Economics Nobel winner Thaler shed light on how real people behave. (Links to an external site.)
Do you fall in line with the more traditional “Econs” believing that people are rational and that markets are efficient or do you fall more in line with behavioral economists and believe that markets may not be as efficient as once believed because people act in irrational ways? Please discuss why you fall where you do.
NO REFERENCE. No PLAGIARISM
Also write reply to this post below ( 50 – 80 WORDS ONLY ):
I believe the markets are not as efficient as they once were because people are irrational, therefore, I fall in line with behavioral economists. I feel that as time has gone on, more and more investors have made less rational choices when it comes to investing. For example, many investors, both experienced and inexperienced, choose to invest in a company because of personal reasons, or they like what the company is trying to do for the world. They chose to make that investment decision based on their feelings or impulses without doing any research into the company. This would be a very irrational choice, especially if the company’s status had been deteriorating, and it was on the verge of bankruptcy. I think that in a perfect world where everyone acted rationally, the market would be very efficient and predictable, but because investors make unpredictable and irrational choices, the market has become less predictable and less efficient.
