PBS is airing a great series called Mind Over Money.

In the aftermath of the worst financial crisis since the Great Depression, NOVA presents “Mind Over Money”—an entertaining and penetrating exploration of why mainstream economists failed to predict the crash of 2008 and why we so often make irrational financial decisions. It’s a program that reveals how our emotions interfere with our decision-making and explores controversial new arguments about the world of finance. Before the current crash, most Wall Street analysts believed that markets are “efficient”—that investors are reasonable and always operate in their own economic self-interest. Most of the time, these assumptions of classical economics work well enough. But in extreme situations, people panic and conventional theories collapse. In the face of the recent crash, can a new science that aims to incorporate human psychology into finance—behavioral economics—do better?

I’m looking forward to seeing the experiment where they wire traders’ brains and bodies during trading sessions. Behavioral economics is a favorite interest of mine, hence Tradeoffs: Leveraging the Longs & Shorts of Life. Dan Ariely wrote a great book on the subject, Predictably Irrational. I highly recommend it.