June 20, 2014


Economics has undergone a revolution in the last few decades.

Once considered a highly technical, academic field, it has been pushed into the public consciousness, and now provides critical answers for policymakers and lay people alike.

At the heart of this shift is behavioral economics -- a fusion between economics and psychology that studies individual decisions. Stephen Dubner, co-author of Think Like a Freak and Freakonomics, believes that behavioral economics will have an increasingly important impact in the future.

"Economics is undergoing a mainstreaming, where we're starting to take parts of the discipline and pick through them - things like opportunity cost and the sunk-cost fallacy - and see the ways in which they can help us be a little better."

Dubner has applied these tools to demonstrate how counterintuitive decisions are often more useful. For example, while society's morals compel people to "never give up," sometimes quitting is the best decision.

"There are a lot of people out there who dearly want to stop doing what they're doing, but don't because of emotions, inertia or fear. But if they do, in about six months, they seem to be happier," says Dubner.

What do people want to stop doing more than anything else? "Running."

And here's another thing you can stop doing: spending so much money on wine. While people often claim that they can taste the difference between "good" and "bad" wine, extensive research has found that we tend to prefer cheaper wines in blind taste tests. Some studies even show that it's hard to differentiate between red and white wines.

"If you're a wine lover and find that totally absurd, give it a shot," Dubner says. "You might be surprised."

For some other findings that might surprise you, listen to our full interview, above.

freaknonomics, Stephen Dubner, Culture, economics

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