alpha is beta

Here is a very nice talk: Barry Schwartz: “The real crisis? We stopped being wise.”  It is a bit long (20 minutes) and not quite directly related to finance and economics.  But it is a nice discussion of “rules and incentives” versus moral people choosing what is right.  It makes for a contrast to an economist’s speech on executive compensation.  I like a good optimal contracting model, but the model is missing  “moral will” and “moral skill” and it seems to matter.  My favorite line is that the banks were “addicted to incentives” and all choices were reflected only through the narrow incentive model.