Financial Times Article: 'Shun the rational agent and rebuild economics'
Paul Ormerod recently wrote the lead comment slot in the Financial Times under the FT’s headline of ‘Shun the rational agent and rebuild economics’. To read the whole article click here.
The jargon in the headline should not put people off. Economics is in the process of being transformed, a process which is making it more realistic. Instead of assuming that people ought to and therefore do behave in particular ways, experimental and behavioural economics are finding out how people really do behave. Volterra is in the forefront of applying these new developments for the benefit of clients as diverse as the Financial Services Authority, British Telecom and the Department of Health.
Bridget gave evidence to the Treasury Select Committee for the Pre-Budget Report
Bridget Rosewell, chairman of Volterra, gave evidence to the Treasury Select Committee on the PBR , which was published on 6th December. She was also asked to give verbal evidence to the Committee, along with Robert Chote from the Institute of Fiscal Studies, David Miles from Morgan Stanley and Martin Weale of the National Institute for Economic and Social Research.
She stressed the lack of coherence in the report and how it was necessary to visit the Appendices before it was possible to get a complete picture – no finance director would be able to get away with this. The Committee also discussed extensively how the Chancellor’s so-called Golden Rules were being applied and Bridget pointed out the sensitivity to the date at which it could be said a cycle had ended, and how this itself was a judgement call rather than based on any facts.
Business Week nominates Paul Ormerod's book 'Why most things Fail' as Business Book of the Year for 2006
Paul Ormerod’s latest book, Why Most Things Fail, has been named as a Business Week Best Business Book of the Year in 2006. The book considers the pervasive nature of failure in the world of human societies and economies and explores the implications and lessons for entrepreneurs and business leaders who want to achieve success.
Paul will be speaking about the book at the Said Business School in Oxford at 6.30pm on Thursday 15 February. Anyone is welcome, and on-line registration is available here.
Volterra teams up with the Future Foundation
Volterra has teamed up with the Future Foundation to carry out some ground-breaking research into what actually motivates consumers when they exercise choice, particularly in financial services. Click here to find out more.
New theories of economic activity - specifically the development of Behavioural Economics - have started to cast doubt on this idea. Leading-edge practitioners are now asking whether unlimited choice is such a good thing after all.
Volterra recently conducted a theoretical piece of work for the FSA that considered that beyond a rather small number of competing choices, great choice is more likely to reduce satisfaction than it is to increase it.
Understanding the impact of greater choice on consumer well-being and decision making is potentially critical for financial services companies. But firms should also know that policymakers might shift their emphasis away from pro-choice towards limiting choice.
The aim of the research programme is to improve firms’ understanding of this area. Where possible we are seeking to put real numbers into the theoretical model and better understand the implications for consumers and companies.
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