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Behavioral Economics for Leaders
book

Behavioral Economics for Leaders

by Matthias Sutter
January 2023
Beginner content levelBeginner
256 pages
4h 34m
English
Wiley
Content preview from Behavioral Economics for Leaders

CHAPTER 16When It's Hot Outside, People Are More Risk Averse and Make Worse Decisions

People say you should “sleep on it” before making momentous decisions. Less has been said up to now about whether you shouldn't make important decisions when it's hot outside. That might change soon. In the age of global warming, heat will become an important decision‐making factor, and it would be smart to take that into account when making far‐reaching decisions.

Global temperatures are rising, and we are going through one record summer after the next. That global warming has had, and will have in the future, a dramatic impact on human beings and the environment is without question. Important decisions must be made to stop the warming. Decisions are warranted on all levels: at the international level, for example, in the form of climate agreements; at the national level, in national climate protection packages; or at the individual level, in relation to individual consumer decisions, which in total contribute to the ecological footprint of every human being. The increasing warming therefore requires a multitude of momentous decisions. But ironically, the heat itself can have a significant influence on human decisions.

Conventional models of human decision‐making behavior completely ignore the factor of heat. According to these models, referred to as neoclassical in economic theory, only the costs and benefits of specific decisions and the choices they are based upon play a role, while things ...

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Publisher Resources

ISBN: 9781119982975Purchase Link