In Box

Anthropology of an Idea: 'Behavioral Economics'

Calculating the cost of human foibles.

Economists have suffered a collapse in credibility since the global financial crisis began. Faith in the efficiency of markets and the invisible hand is out; "behavioral economics," which stresses that humans are fundamentally irrational actors, is in. We are blind to risk; we make decisions on a whim; we prefer consuming now over saving for later. Human fallibility seems to be the perfect explanation for an unfathomable crisis. Here’s how -- after years of being considered a quaint subfield -- behavioral economics has finally stolen the limelight.


Photos: brain, iStockphoto.com; Kahneman, Getty Images; piggy bank, iStockPhoto

In Box

The Ties That Don’t Bind

In tough times, how many friends do you really have?

In desperate moments, where does one turn for help? Poor countries are often assumed to have relatively weak government safety nets, but also strong social networks -- extended families and friends who can pitch in during hard times. Yet when Gallup asked respondents in selected countries, "If you were in trouble, do you have relatives or friends you can count on to help you whenever you need them?" the results pointed to a different conclusion: The strength of informal support networks roughly mirrors a country's economic and political stability.

Below are percentages of poll respondents by country who answered "yes":

  • 48% Pakistan
  • 54% Afghanistan
  • 62% Cambodia
  • 62% Iran
  • 80% China
  • 95% United States
  • 98% Ireland