Perspectives: Explaining Fiscal Foolishness; April/May/June 2009; Scientific American Mind; by Jonah Lehrer; 2 Page(s)

Peter A. Ubel is professor of medicine and psychology at the University of Michigan at Ann Arbor, where he explores the quirks in human nature that influence our health, happiness and society. He is author of the book Free Market Madness (Harvard Business School Press, 2009), which investigates the irrational tics that lead people to overbid on eBay, eat too much ice cream and take out mortgages they cannot afford. In an interview with Jonah Lehrer, Ubel explains how innate optimism, greed and ignorance can depress financial and physical well-beingand how individuals can commit to change.

Scientific American Mind: Your new book, Free Market Madness, argues that conventional economics, which assumes that humans are rational agents acting in their own self-interest, is deeply naive and scientifically unrealistic. Instead you describe a brain brimming with biases and flaws. Do you think these flaws are responsible for the latest economic turmoil? If so, how?