Professor Arvan's Behavioral Economics Course Site
I thought this article was interesting! http://www.scientificamerican.com/article.cfm?id=the-science-of-irrational&print=true
Thanks for the comment. For some reason the url didn't become a hotlink, so here it is. As an FYI, Daniel Kahneman also has a new book, Thinking Fast and Slow. I believe on the question of whether people behave rationally or not, some people are too flip. This, of course, is just an interview but even in published work this is an issue.For example, there is now a literature on pro football coaches being irrational because they punt in situations where there is a higher expected value in going for it on fourth down. This, however, is insufficient to demonstrate irrationality or not. The issue is: who bears the risk? If the coach bears the risk for a bad outcome, punting can be perfectly rational. The owner (and the fans) should want the coach to go for it. But can they absorb the risk that falls on the coach?