Maybe People Are Rational, We Just Don't Understand Their Values?
20/03/17 19:07
One of the assumptions of modern finance was the all investors behave rationally. This assumption has been sorely tested and there are significant doubts that this is the case. But, what if….everyone is rational, but it is based upon their own personal value set. Within their own values, they are behaving rationally. Once you understand the values, you can understand their behavior. This would account for why people can at times act so “irrationally”. Their value sets are telling them to. We just don’t understand the value sets. The recent Presidential election is an example of this.
It might even be something deeper than value sets, something along the way of mental wiring, along the lines of behavioral finance. The New York Times just ran a story today saying that perhaps Sociologists were more important in studying the economy than Economists. I think there is something to that.
It might even be something deeper than value sets, something along the way of mental wiring, along the lines of behavioral finance. The New York Times just ran a story today saying that perhaps Sociologists were more important in studying the economy than Economists. I think there is something to that.
