When irrationality becomes rational

Prospect theory and poker bubbles, revisited

There are many things that I love about Daniel Kahneman’s work, but here’s one that is often overlooked: even though the psychological domain Kahneman studied is called bounded rationality, and even though we most often talk about the biases and fallacies that litter human decision making, sometimes, those biases are not biases at all. There are situati…