Behavioral Economics: The Errors Point the Same Way
If people departed randomly from rational choice, the departures would cancel out. They lean consistently in the same directions — which is what makes them worth studying, and worth worrying about.
Topic
Public Policy
The Principal-Agent Problem: Your Agent Earns ₹2,000 From Your ₹5,00,000
Holding out two weeks for a better house price is worth a fortune to you and pocket change to your agent. No dishonesty required — just a small gap between what you want and what they're paid for.
The Tragedy of the Commons: When Restraint Is Punished
Every herder who adds a cow to the shared pasture captures the whole benefit and pays a twentieth of the cost. Nobody is greedy, everyone is correct, and the pasture dies anyway.
Goodhart's Law: What Happens the Moment You Attach Money to a Number
Colonial Hanoi paid a bounty per rat tail and got a rat-farming industry. The failure needs no dishonesty — only a proxy, a consequence, and someone rational enough to notice the shortcut.
The Prisoner's Dilemma: When Two Rational People Both Lose
Betraying your partner is the correct choice no matter what they do. So both of you betray, and both of you serve five years instead of one. No error was made — and that is exactly the problem.
Nash Equilibrium: Why Everyone Stays Somewhere Nobody Likes
Two petrol stations cut prices until neither can move without losing. Nobody wanted the result, everyone behaved sensibly, and it held anyway — because stable and good are different properties.
Regulation: Rules Can Only Describe What Already Happened
A rule needs a harm that is noticed, documented, understood, and politically salient. All four take years, while products change in months — and that gap explains most of the field.
Antitrust: The Test Was Built for Prices That Never Rose
A century of competition law detects monopoly by watching consumer prices. When the service is free, the test finds nothing — and the power sits somewhere it was never designed to look.