With no doubt, most people who have taken economic class or who have heard a part of economic theory regard the nature of human as selfish. In fact, one of the most famous economists, Adam Smith, suggested the concept of ‘invisible hand’ which quietly persuades selfish businessmen to serve the public good in his book, ‘The Wealth of Nations.’ The central lesson of this book has been quoted as a basic principle for a long time.
Daniel Kahneman, who won the Nobel Memorial Prize in Economic Sciences in 2002, was awarded for his groundbreaking work in applying psychological insights to economic theory, particularly in the areas of judgment and decision-making under uncertainty. Even though he was a psychologist, he raised the question on the long-lasting and firm economic theory that human beings are selfish and reasonable, then repeatedly proved that people tend to behave in different way depending on the given situation in Behavioral Finance.
In Behavioral Finance, there’s a concept named Heuristic. This is a method to solve a problem, commonly an informal method. Especially this is used to rapidly come to a solution that is reasonably close to the best possible answer, or optimal solution caused by educated guesses, intuitive judgments or simply common sense. Now, the theory supports that human beings are not as rational as classical economics insist.
If Daniel Kahneman adhered to the established theory, never raising up a question in argument, people would have kept dealing with many economic problems only in a limited way, making it hard to solve. However, a slight change in an idea made a great discovery. The thing is who could firstly reach the idea. Young children keep asking something that we never wondered, which makes us somewhat embarrassed because apart from stereotype, their words sometimes make sense. Without stereotype, the world is varied than we knew and there could be hidden truth not to be discovered yet. Why don’t you try something to break your stereotype? Who knows? You are potential enough to change the world with such a great discovery.