Behavioral economics the answer or a big, fat hoax

Pros - Behavioral economics is catching on (read on)

"And the real issue is that for a long time we would do these experiments showing all kinds of irrationalities, and people would say, OK, it's very cute, it's very entertaining, it's amusing, but surely when it will come to people making large decisions in a repeated who are experts, all of these irrationalities will go away and people would behave perfectly rational. In 2008, Greenspan's testimony, that basically you can summarize as, oops, I thought the markets were irrational and would take care of themselves but they don't. I think there's a new realization of how important an endemic irrationality is, and that we really need to understand it better if we ever want to get out of not just this crisis, but we want to prevent the next ones who are just waiting around the corner.(read on)

Cons - Five reasons 'neuroeconomics' is a big, fat hoax (read on)

"Yes, neuroeconomics is a hoax. And I'm "mad as hell" about it. Call it whatever name you want, they're all the same: Behavioral finance, psychology of investing, behavioral economics, the "new science of irrationality." Let's call it "neuroeconomics." And yes, it's a scam, a con job, propaganda, a big fat hoax.

The biggest reason the human brain will always remain irrational is because Wall Street wants it that way. Wall Street can control irrational Americans better using its high-tech neuroeconomic data, strategies and algorithms. As University of Chicago Prof. Richard Thaler (co-author of "Nudge" with Obama appointee Cass Sunstein) wrote in his earlier classic, "Advances in Behavioral Finance II:" Wall Street "needs investors who are irrational, woefully uninformed, endowed with strange preferences, or for some other reason willing to hold overpriced assets." He describes "these conditions collectively as irrational."

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