Behavioral economics was right: The Sunk Cost Fallacy

Behavioral economics is the branch of economics that studies the effects of our emotions, cultural influences and many other things ultimately related to our psyche on the economics decisions we make. Remember the (neo)classics: we are perfectly rational and, as such, act according to strict cost-benefit comparisons. Behavioral economics, on the other hand, says “screw that!” and dives deeper into the human behavior (duh) in order to gain better understanding of our choices. Continue reading “Behavioral economics was right: The Sunk Cost Fallacy”

Understanding Risk for better decision making: creating our own Sharpe Ratios

Decisions are something we have to be aware of and make every single day of our lives. Whether they are small, seemingly unimportant decisions like brushing our teeth or going to bed early, or big ones like choosing a major or declining a job offer, our decisions shape our future and our personality. With every decision comes an outcome… and a share of risk that we need to take into account before making a move. And yes, we all have trouble making big decisions and wish we could understand the situation better… that’s why we’re here today! Continue reading “Understanding Risk for better decision making: creating our own Sharpe Ratios”

Winter is coming: QE is coming to an end… and Spain will have to face reality

I’m sure you’ve heard many people say we’re on the verge of a new recession; it may take some months, even a year, but things are starting to get weird out there… and for good reason. After the Great Recession of 2008 (whose wrath we’re still suffering in some countries), the European Central Bank decided to start a measure called “Quantitative Easing” (QE) to help the countries recover and get back on the track of economic growth and employment. Continue reading “Winter is coming: QE is coming to an end… and Spain will have to face reality”

The Pareto Principle – why you shouldn’t focus on everything

I am sure you have heard the words “Pareto Principle” or “80/20 rule” at least once in your life. They are everywhere: productivity, business, how-to-do-more-this-year-100%-real videos… But do you really know what the Pareto Principle is and how it affects your life? What’s more, do you know how to take advantage of this great economic observation in your decisions? Continue reading “The Pareto Principle – why you shouldn’t focus on everything”

“Work less, work Economic!” (because “marginal product of labor” sounded too boring)

Have you ever wondered why your shifts look like they’re never going to end? Why your boss wants you to stay for a full 8 hours (or more!) when you can barely remember your name by 1pm? Good news is we can fix this problem. Bad news is… well, your boss probably won’t like it and will surely think this is crazy. Continue reading ““Work less, work Economic!” (because “marginal product of labor” sounded too boring)”

Who is The Economic Man?

As you may have noticed, the title of this website is “The Economic Man”, and its purpose is to help everyone become the best version of themselves through life advice and economic knowledge. That way, we all can become Economic Men and Women. But, what should you expect? What does it mean to be an Economic Man? Continue reading “Who is The Economic Man?”

Understanding economic bubbles: Where are we heading?

Economic cycles are one of the most, if not the most, important things we need to know when studying all kinds of economic phenomena. They lead our behavior and our expectations, and can help us make important decisions in advance. Right now, we’re trying to get out of the “Great Recession” via expansive monetary policy and budgetary austerity. What should come after the end of the recession is… well, another 10 years of expansion! Does it sound easy? It isn’t 🙁 Continue reading “Understanding economic bubbles: Where are we heading?”