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; â€œbehavioral economics,â€ 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. Hereâ€™s howâ€”after years of being considered a quaint subfieldâ€”behavioral economics has finally stolen the limelight.
Anthropology of an Idea: â€œBehavioral Economicsâ€ by Elizabeth Dickinson in Foreign Policy.