In The Upside of Irrationality article, the Investment Advisor author observes "If we rely too heavily on the expectation that people will act rationally, we can end up making mistakes when we design policies and institutions." This is a very thought-provoking article with many good observations that helped connect the psychology to financial behavior.
But is this the problem? It seems that way too many people are taking advantage of this known predictable irrationality for their own gain. Instead of eliminating the conflict of interest, there seems to be a systematic migration to allowing and even encouraging these behaviors. Not only are we moving away from identifiable cash money, everyone - government, corporations, non-profits, financial advisors, kids - is 'generously' spending other people's money (yours and mine).
Is this really the problem or is it just me?
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