Learning to Love Volatility

In a world that constantly throws big, unexpected events our way, we must learn to benefit from disorder, writes Nassim Nicholas Taleb. original source here

Several years before the financial crisis descended on us, I put forward the concept of "black swans": large events that are both unexpected and highly consequential. We never see black swans coming, but when they do arrive, they profoundly shape our world: Think of World War I, 9/11, the Internet, the rise of Google.

To Really Learn, Quit Studying and Take a Test

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Taking a test is not just a passive mechanism for assessing how much people know, according to new research. It actually helps people learn, and it works better than a number of other studying techniques.

The research, published online Thursday in the journal Science, found that students who read a passage, then took a test asking them to recall what they had read, retained about 50 percent more of the information a week later than students who used two other methods.

TED Talks

There have been some good TED talks on behavioural economics over the last few years. Below is a sample:                                                               For a better visualization, have a look at TED website

Dan Ariely: 

                                 Are we in control of our decisions?

Behavioral economist Dan Ariely, the author of Predictably Irrational, uses classic visual illusions and his own counterintuitive (and sometimes shocking) research findings to show how we're not as rational as we think when we make decisions.

http://www.ted.com/talks/dan_ariely_asks_are_we_in_control_of_our_own_decisions

Nudge nudge, think think

Behavioural economics is changing regulation. Payday lending is a target (Click here for original source)

IN 2010 the Conservative-led government established a team—known affectionately as the “nudge unit”—to investigate how behavioural economics could be used to improve policy. Behavioural economists argue that consumers are not hyper-rational but have predictable biases, and they use insights from experiments to make models imitate reality more closely. The nudge unit was so successful at finding clever policy insights that it was part-privatised and has been advising other governments. Now, behavioural economics is changing the way Britain’s regulators think about the markets they regulate.

Poor Behaviour

Behavioural economics meets development (Click here for original source)

A BAT and a ball cost $1.10 between them. The bat costs $1 more than the ball. How much does each cost? By paying attention to how people actually think, behavioural economics has qualified some of the underlying assumptions of classical economics, notably that everyone is perfectly rational. In fact, the mind plays tricks, dividing up $1.10 (in this example) neatly into $1 and 10 cents, rather than