Nobel’s get it right I

Nobel’s get it right

I can’t believe they picked Smith and Kahneman are excellent choices. Kahneman and Tversky and Smith have opened a whole new line of inquiry that really allows us to test how people behave. Econ has always assumed that peopel are rational. In many cases though, we saw evidence to the contrary. Experimental economics is giving us the ability to investigate how people make decisions under different conditions and explode rationality into a useful concept beyond its theoretical parsimony. And go to Dynamist.com for some articles on Smith and his work.

Interesting to note about insurance

Interesting to note about insurance

Molly does Texas well. She has a great column on insurance rates and this little nugget is especially interesting:
“There’s been a lot of screaming about how the cost of med-mal is driving doctors into retirement, but Public Citizen did a 21-state study showing that insurance premiums are rising at the same rate across the board — homeowners, car and health.”

Insurance is a strange product because when you buy it, you aren’t just buying insurance, you are buying a policy into the company’s health. The problem is when they have bad investments, your rates go up. In a strict sense this would be fair. However, people don’t really consider themselves stakeholders and I’m pretty damn sure nothing I can do will affect Ed Rust’s decisions. Given this relationship, insurance companies have no business whining about trial lawyers.