"The Behavioral Revolution"

Referencing Nassim Nicholas Taleb, who recently spoke at the IdeaFestival, columnist David Brooks suggests that the financial crisis could be the coming out party for behavioral economics:

Taleb believes that our brains evolved to suit a world much simplerthan the one we now face. His writing is idiosyncratic, but he does touch on many of the perceptual biases that distort our thinking: our tendency to see data that confirm our prejudices more vividly than data that contradict them; our tendency to overvalue recent events when anticipating future possibilities; our tendency to spin concurring facts into a single causal narrative; our tendency to applaud our own supposed skill in circumstances when we’ve actually benefited from dumb luck.

And looking at the financial crisis, it is easy to see dozens of errors of perception.

Wayne