Behavioral economics studies the effects of psychological, emotional and social factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory. Behavioral economics is concerned with the bounds of rationality of economic agents. Behavioral models integrate insights from psychology and microeconomic theory; the study of behavioral economics includes how market decisions are made and the mechanisms that drive public choice. The three prevalent themes in behavioral economics are: Heuristics: Humans make 95% of their decisions using mental shortcuts or rules of thumb. Framing: The collection of anecdotes and stereotypes that make up the mental filters individuals rely on to understand and respond to events. Market inefficiencies: These include mis-pricing and non-rational decision making. In 2002, psychologist Daniel Kahneman was awarded the Nobel Memorial Prize in Economic Sciences "for having integrated insights from psychological research into economic science concerning human judgment and decision-making under uncertainty".
In 2013, economist Robert J. Shiller received the Nobel Memorial Prize in Economic Sciences "for his empirical analysis of asset prices". In 2017, economist Richard Thaler was awarded the Nobel Memorial Prize in Economic Sciences for "his contributions to behavioral economics and his pioneering work in establishing that people are predictably irrational in ways that defy economic theory". During the classical period of economics, microeconomics was linked to psychology. For example, Adam Smith wrote The Theory of Moral Sentiments, which proposed psychological explanations of individual behavior, including concerns about fairness and justice. Jeremy Bentham wrote extensively on the psychological underpinnings of utility. During the development of neo-classical economics, economists sought to reshape the discipline as a natural science, deducing behavior from assumptions about the nature of economic agents, they developed the concept of homo economicus. Neo-classical economists did incorporate psychological explanations: this was true of Francis Edgeworth, Vilfredo Pareto and Irving Fisher.
Economic psychology emerged in the 20th century in the works of Gabriel Tarde, George Katona, Laszlo Garai. Expected utility and discounted utility models began to gain acceptance, generating testable hypotheses about decision-making given uncertainty and intertemporal consumption, respectively. Observed and repeatable anomalies challenged those hypotheses, further steps were taken by Maurice Allais, for example, in setting out the Allais paradox, a decision problem he first presented in 1953 that contradicts the expected utility hypothesis. In the 1960s cognitive psychology began to shed more light on the brain as an information processing device. Psychologists in this field, such as Ward Edwards, Amos Tversky and Daniel Kahneman began to compare their cognitive models of decision-making under risk and uncertainty to economic models of rational behavior. Mathematical psychology reflects a longstanding interest in preference transitivity and the measurement of utility. Bounded rationality is the idea that when individuals make decisions, their rationality is limited by the tractability of the decision problem, their cognitive limitations and the time available.
Decision-makers in this view act as satisficers, seeking a satisfactory solution rather than an optimal one. Herbert A. Simon proposed bounded rationality as an alternative basis for the mathematical modeling of decision-making, it complements "rationality as optimization", which views decision-making as a rational process of finding an optimal choice given the information available. Simon used the analogy of a pair of scissors, where one blade represents human cognitive limitations and the other the "structures of the environment", illustrating how minds compensate for limited resources by exploiting known structural regularity in the environment. Bounded rationality implicates the idea that humans take shortcuts that may lead to suboptimal decision-making. Behavioral economists engage in mapping the decision shortcuts that agents use in order to help increase the effectiveness of human decision-making. One treatment of this idea comes from Richard Thaler's Nudge. Sunstein and Thaler recommend that choice architectures are modified in light of human agents' bounded rationality.
A cited proposal from Sunstein and Thaler urges that healthier food be placed at sight level in order to increase the likelihood that a person will opt for that choice instead of less healthy option. Some critics of Nudge have lodged attacks that modifying choice architectures will lead to people becoming worse decision-makers. In 1979, Kahneman and Tversky published Prospect Theory: An Analysis of Decision Under Risk, that used cognitive psychology to explain various divergences of economic decision making from neo-classical theory. Prospect theory has two stages: an evaluation stage. In the editing stage, risky situations are simplified using various heuristics. In the evaluation phase, risky alternatives are evaluated using various psychological principles that include: Reference dependence: When evaluating outcomes, the decision maker considers a "reference level". Outcomes are compared to the reference point and classified as "gains" if greater than the reference point and "losses" if less than the reference point.
Loss aversion: Losses are avoided more than equivalent gains are sought. In their 1992 paper and Tversky found the median coefficient of loss aversion to be about 2.25, i.e. losses hurt
What Every Woman Knows is a 1934 American romantic comedy film directed by Gregory La Cava and starring Helen Hayes, Brian Aherne and Madge Evans. The film was produced and distributed by Metro-Goldwyn-Mayer and is based on the play What Every Woman Knows by J. M. Barrie, it stars Lois Wilson. An earlier British silent version was filmed in 1917. Hayes was familiar with the material as she had starred in a 1926 Broadway revival opposite Kenneth MacKenna. Alick Wylie and his sons David and James are concerned about Alick's daughter Maggie, jilted by a minister, she is less than heartbroken, but they fear for her marital prospects at the age of 27. When they catch poor but ambitious 21-year-old John Shand breaking into their house late at night to use their library, they seize the opportunity. Impressed by his initiative, they offer him £300 to finance his studies provided that he give Maggie the option of marrying him after five years. After some thought, he agrees; the Wylies insist he sign a formal contract.
As the five years draw to an end, he wins. Two of the "quality", la Contessa la Brierre and her niece Lady Sybil Tenterden, show up to congratulate him. Lady Sybil had shown an unexpected interest in politics after seeing the handsome victor. On the train to London to take his seat, John is given the opportunity by Maggie to back out of their agreement, but he avers that a bargain is a bargain and marries her. Lady Sybil helps forward John's political career, the two fall in love. Maggie too works diligently and craftily on her husband's behalf, planting ideas that he takes for his own. John has become a financial expert, is for the country dropping the gold standard, against the policy of his Labour Party; when the influential politician Charles Venables comes to sound him out, Maggie sees him first and takes it upon herself to state that John would resign from the party rather than betray his principles. Venables is delighted. Matters come to a head on the Shands' second wedding anniversary, with John telling Maggie and her family that he and Lady Sybil are in love.
He insists on writing a letter of resignation from Parliament. Maggie persuades him to postpone their public separation for a month so he can finish writing his book, she arranges for him to stay at the estate of la Contessa. Things turn out the way she had hoped: John and Lady Sybil's ardor does not survive having to spend an entire month together. Meanwhile, Maggie goes to see Venables, she presents him with John's letter, telling him that her husband has resigned over the gold standard. Venables is so impressed; when John finds out what Maggie has done, he is somewhat offended. However, she assures him that "what every woman knows" is that behind every successful man is a woman who secretly strives to help him. In the end, he sees things her way, is cajoled into laughing for the first time in his life. Helen Hayes as Maggie Wylie Brian Aherne as John Shand Madge Evans as Lady Sybil Tenterden Lucile Watson as La Contessa la Brierre Dudley Digges as James Wylie Donald Crisp as David Wylie David Torrence as Alick Wylie Henry Stephenson as Charles Venables The film grossed a total of $502,000: $340,000 from the US and Canada and $162,000 elsewhere resulting in a loss of $140,000.
A tidal tail is a thin, elongated region of stars and interstellar gas that extends into space from a galaxy. Tidal tails occur as a result of galactic tide forces between interacting galaxies. Examples of galaxies with tidal tails include the Mice Galaxies. Tidal forces can eject a significant amount of a galaxy's gas into the tail. Within those galaxies which have tidal tails 10% of the galaxy's stellar formation takes place in the tail. Overall 1% of all stellar formation in the known universe occurs within tidal tails; some interacting galaxy pairs have two distinct tails, as is the case for the Antennae Galaxies, while other systems have only one tail. Most tidal tails are curved due to the rotation of the host galaxies; those that are straight may be curved but still appear to be straight if they are being viewed edge-on. The phenomena now referred to as tidal tails were first studied extensively by Fritz Zwicky in 1953. Several astrophysicists expressed their doubts that these extensions could occur as the result of tidal forces, including Zwicky himself, who described his own views as "unorthodox".
Boris Vorontsov-Velyaminov argued that the tails were too thin and too long to have been produced by gravity alone, as gravity should instead produce broad distortions. However, in 1972, renowned astronomer Alar Toomre proved that it was indeed tidal forces that were responsible for the tails