How economic shocks change your investing brain

According to economic models, we are all ‘homo economicus’. The Oxford Reference Dictionary defines him (and it is invariably ‘him’) as a rational economic agent who only pursues his own interest. He has consistent preferences, and when he is given an option, he chooses the alternative that provides the highest expected return for himself.

You might think that he sounds like a different species – and you wouldn’t be alone. The definition goes on to add that “it is controversial whether this figure is realistic, and if not, how much that matters to economic theory”.