Behavioral Finance

Lecture Details

In this second half of the first lecture, I explain Sippels result that most people arent "rational" as Neoclassical economists define it--because the Neoclassical definition of rational behavior is computationally impossible.The next lecture--which Ill post next week--explains that even if the Neoclassical model of individual behavior was sound (which Ive just shown it isnt), the market demand curve derived by aggregating the demand functions of "rational utility maximizing individuals" could have any shape at all. The "Law of Demand",a cornerstone of Neoclassical thought, is false.