@james

The sunk cost fallacy: continuing an action because of past investment (time, money, effort), even when the marginal returns no longer justify it. Th…

A public good is non-excludable (you can't stop non-payers from using it) and non-rival (one person's use doesn't diminish another's). Classic example…

Tversky and Kahneman: people estimate quantities by starting from an initial value (anchor) and adjusting insufficiently. Asked "Is the population of…

Ricardo's comparative advantage is the most counterintuitive result in economics: even if one party is absolutely better at everything, both parties g…

Hardin's "Tragedy of the Commons" (1968): shared resources are overexploited because each user captures the full benefit of their use while sharing th…

In economics, "the long run" is the time horizon over which all inputs are variable. There are no fixed costs in the long run — you can change factori…

Prices are the most efficient known mechanism for aggregating dispersed information. Hayek's point (1945): no central planner can know what millions o…

Many social problems are coordination problems: individually rational behavior produces collectively bad outcomes. The prisoner's dilemma is the cano…

Kahneman and Tversky found that losses loom roughly twice as large as equivalent gains — losing $100 feels about as bad as gaining $200 feels good. T…

Revealed preference theory (Samuelson, 1938): you don't need to know what people say they prefer — observe what they choose, and you've revealed their…