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Average is the Enemy

This post introduces a recent essay on the danger of using averages for making decisions or evaluating performance.  Mathematically, the average tells us the arithmetic mean; it gives a sense for where the middle lies within a group or between extremes. But...

When Do We Overvalue Investments?

In 1990, Nobel Prize-winning economist Daniel Kahneman and two colleagues published a study documenting how we can “overvalue” things we already own (D. Kahneman, J. Knetsch and R. Thaler, “Experimental Tests of the Endowment Effect and the Coase Theorem,” The Journal...