The film 'A Good Year' starts with a ruthless financial trader called Max, played by Russell Crowe, manipulating bond markets in order to out-maneuver his competitors and make a quick, big profit. But, by the end of the film Max has decided to pack it all in and live out a more fulfilling life in rural France. Could that happen? Can someone really transition from a ruthless, selfish trader to a compassionate, loving family man in the space of a few days? A study by Alain Cohn, Ernst Fehr and Michel Marechal, publisehd in 2014 in Nature, suggests it might be possible. They used a standard coin tossing task to measure the dishonesty of 128 employees from a large, international bank. The task works as follows: A subject is asked to toss a coin 10 times and record whether the outcome was heads or tails. Depending on the outcome the subject can win $20 per toss. The crucial thing to know is that the subject records whether or not they won for each toss and the...
Some random thoughts on game theory, behavioural economics, and human behaviour