Interesting NY Times article on Economics Nobel winning psychologist Daniel Kahneman. He “developed a new understanding of judgments and decisions made under conditions of risk or uncertainty.” Which helps explain why people make certain decisions even when the choices have the same expected utility, and aren’t the “rational agents” they were traditionally thought to be.
In my classes, I say: "I'm going to toss a coin, and if it's tails, you lose $10. How much would you have to gain on winning in order for this gamble to be acceptable to you?" People want more than $20 before it is acceptable.
Here is some irrational anger: How come they make movies about a mathematician who win the Economics Nobel and write articles about psychologist who win, but not other Nobel-winning economists? Where are the movies about Milton Friedman, Ronald Coase and Paul Samuelson?
Oh right, they tend to be really boring (as far as movies go)…