Irrelevant Things Matter in Economic Behavior

If you enjoyed this article, I highly recommend Daniel Kahneman's Thinking Fast and Slow, in which Thaler and insights like the one highlighted in this article feature prominently.

I also happened to stumble across this gem yesterday: Michael Lewis writing on Kahneman and his influence on Moneyball, the book and the revolution:

http://www.vanityfair.com/news/2011/12/michael-lewis-201112

I was impressed by Kahneman's humility, although not at all surprised after reading the book.

One of these days, I'd like to start a discussion about Kahneman's recommendations for doing interviews from Thinking Fast and Slow. Just waiting for the right "Interviews are broken" thread, I guess.

Finally, in fairness to the article at hand, I should probably check out Misbehaving: The Making of Behavioral Economics when it comes out.

Maybe a better title would be "People have a funny sense of what is relevant." That is, people have complicated ways of placing value on things. In the case of scaling the test to 137 points so the average comes out closer to 100 is silly in some ways it satisfies the students conditioning to thinking a 100 is a great score. I find the example sad in several ways (Is the teacher testing to material above what is being taught? Do the students care more about the score than actually learning something? probably...) but wanting a 100 is not irrelevant to the students.

I just bought a blue car. The color makes no difference in the performance of the car. That doesn't mean it was irrelevant to me.

Just had a discussion of this article and book a few days ago on HN

https://news.ycombinator.com/item?id=9557598