Behavioral economics is a very cool area. It's percolating into popular discourse quickly, as in this column by David Brooks in the New York Times. Brooks says that behavioral economics will provide guidelines for regulations to protect us from ourselves (referring to the global financial crisis in 2008). I think he overreaches. Economists are not close to figuring out the optimal way to regulate markets! We now suspect that "no regulation at all" is not the right answer. However, we're a long way from a consensus on how to balance systemic risk management with encouraging innovation.
The errors we make when judging risks makes us less sensitive to the risk of climate change that to a more tangible and immediate risk (such as a snake).
People systematically underestimate the calorie content of food with a "health halo", such as that labeled "trans fat free".
People are very poor at judging risk (need link here).
Great NYT story entitled "My Personal Credit Crisis" about how an economics journalist got in too deep.
Money can even have an effect on your state of mind.
