A review of 'The Laws of Trading' by Agustin Lebron, examining trading principles and their broader applications to decision-making and life.

Scott Alexander argues that despite some replication failures, the core of behavioral economics remains valid and valuable, with the field continuing to evolve and refine its understanding of human decision-making.

Scott Alexander critiques an NYT article on the weakness of financial incentives, arguing that they remain crucial as a counterweight to powerful social incentives.

A study on expert prediction of behavioral economics experiments finds that experts have only a slight advantage over non-experts, suggesting that a separate 'rationality' skill may be more important than specific expertise.

Scott examines experimental data on how people actually behave in Prisoner's Dilemma and Ultimatum Game situations, finding that people use various heuristics like tit-for-tat and fairness considerations rather than purely rational strategies.

Scott explains prospect theory, Kahneman and Tversky's model of how people actually make decisions, showing how its value and probability weighting functions predict numerous cognitive biases including loss aversion, scope insensitivity, and framing effects.

Scott explains time and effort discounting through examples like candy placement affecting consumption, argues that hyperbolic discounting creates preference reversals, and suggests these are better understood as reward functions rather than true preferences.

Scott explores how small inconveniences can powerfully shape behavior, from China's Great Firewall to rebate forms to credit card spending, and discusses policy implications including opt-out government programs.