Irrationally Rational: Ten Nobel Laureates Script the Story of Behavioural Economics

Description

You and your friend each have flights to catch at 8 p.m. and your destination cities are different. You decide to share a cab, but get caught in a rare traffic jam lasting several hours. You end up at the airport around midnight, and surely enough, both of you miss your flights. All quantifiable consequences of missing the flights-cost of tickets cancellation, paying for a new ticket, taking a cab back to the city, overnight stay, taking a cab back to the airport next morning, etc.-are expectedly identical for both. Now suppose the airline assistant tells you, 'Sorry, your flight left as scheduled at 8 p.m. sharp.' But your friend is told, 'Oh, how very unfortunate. Your flight was almost four hours late and only just departed!' Who feels the greater disappointment? You or your friend?

V. RAGHUNATHAN (popularly, Raghu) is an academic, author, corporate executive, columnist and a hobbyist. He is currently an adjunct professor at the Schulich School of Business, York University, Toronto, Canada. He was a professor of finance at Indian Institute of Management Ahmedabad for nearly two decades. He was also the president of a large private bank, first Vysya Bank and then ING Vysya Bank, Bangalore. For the next fourteen years, he headed GMR Varalakshmi Foundation-a large corporate foundation-as their CEO, and also served as the director of the India campus of Schulich School of Bus