Author Archives: F. E. Guerra-Pujol

I began this series of blog posts on 22 August by asking whether Adam Smith was a closet Bayesian. Today, I draw this series to a close by concluding that Adam Smith was a closet behavioral economist who made several … Continue reading →

To my North American readers, Happy Labor Day Weekend! Now, to the business at hand. This past week we have been surveying how Adam Smith uses lotteries in Book I, Chapter 10 of The Wealth of Nations — actual state-run … Continue reading →

In my previous post “The Army as Lottery“, we saw how according to Adam Smith in Paragraph 30 of Chapter 10 of Book I of The Wealth of Nations, “romantic hopes” of heroism and glory are what motivate many young … Continue reading →

In my previous post, we saw how the direct relationship between youth and risk-taking — the now-commonplace observation that young people are especially vulnerable to wishful thinking and risk-seeking thrills — can be traced back to Book I, Chapter 10 … Continue reading →

Thus far this week (see here and here), we have seen why Adam Smith can be considered to be the founder of behavioral economics. In summary, what Smith calls this “absurd presumption in [our] own good fortune” (i.e. optimism bias) … Continue reading →

Happy “1st of tha Month“! My previous post presented Adam Smith’s analysis of the psychology of lotteries. In summary, we buy lottery tickets out of the “vain hope” we might win a jackpot, i.e. we are motivated by the size … Continue reading →

A strong case can be made that Adam Smith is the first behavioral economist, for he diagnoses not one but two major cognitive quirks in Paragraph 26 of Chapter 10 of Book I of The Wealth of Nations: the overconfidence … Continue reading →

To set the stage for the last part of my survey of Adam Smith’s use of probability in The Wealth of Nations, which I will resume on Monday, August 31st, below are links to some of the ground we have … Continue reading →

In my previous post, we saw Adam Smith’s lottery analogy in Book I, Chapter 10 of The Wealth of Nations — or what I now like to call the “The Allegory of the Lottery” — where Smith describes the probability … Continue reading →