23 September 2008

Investors and Consumers: Don't Panic

Two esteemed economists and a Nobel Prize-winning psychologist argue that cooler heads should -- and must -- prevail

by Jennifer Robison
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The stock market remains volatile, and credit markets have been frozen. The question is: Will the panic move from Wall Street to main street -- and if it does, will it make a bad economic situation worse? Two esteemed economists and a Nobel Prize-winning psychologist argue that cooler heads should -- and really must -- prevail.
Jennifer Robison is a Senior Editor for the Gallup Management Journal.
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Reader Comments
Vinai Norasakkunkit Posted On 9/25/2008 4:56:41 PM

Rather than advising consumers and investors not to be irrational, wouldn't it be more constructive for behavioral economists and psychologist to be convincing those who come up with the pertinent economic and financial models in the marketplace to incorporate human irrationality into their models? A lot of those economic and financial models assume that humans are perfectly rational. This idea is still being taught at many university economics departments. Isn't it time for economic and financial models to take caution against naive assumptions about human behavior?

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Concerned Citizen Posted On 9/26/2008 2:59:15 PM

If cooler heads must prevail, shouldn't we be giving serious consideration to a presidential candidate known for having the cooler head?

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Peter Aldin Posted On 10/9/2008 3:49:51 PM

Helpful! Amazing isn't it, that for all the information out there, our success and our security largely rests on (stems from?) our emotional states. Great article!

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Philip Kundsen Posted On 11/3/2008 12:19:21 PM

'There is nothing to fear but fear itself'.
'It's the economy stupid'.
I really wish people would stop saying these lines because they are waring thin and are unimaginative.
I say:
'Get over it you stupid over paid Bankers!'

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See also
Word of Bailout Stalls Worsening U.S. Consumer Confidence
Good Pricing Strategies for Bad Times
How Banks Can Rebuild Customer Confidence
Amid Job Losses, All Isn’t Lost
When the Going Gets Tough
What Were They Thinking?

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