Poor Decision Making

 This article about economic decision making was written by one of our grant recipients, Sendhil Mullainathan.

 "All too often, the choices of the poor are viewed as a result of either some intrinsic failing (“they’re just very myopic people”) or some deep psychological feature of poverty (“they’re desperate”). Behavioral economics — the integration of psychological insights into economic analysis — offers a third interpretation: All of us face difficulties in making the right choices; the poor are just asked to do it more often and in tougher circumstances.

"This perspective will eventually alter the way we fight poverty. It should affect the way in which governments in developing countries set their policies, donor agencies like the World Bank provide aid, and foundations and others give support. In much the same way that the move toward market-oriented policies transformed policymaking, I think a psychologically richer view of poverty will transform both how we understand and how we deal with poverty. As a behavioral economist, I am optimistic that this influence will be for the positive."

Read the rest of the article here.