Managers do not decide rationally

Developments in the global economy have raised a host of questions, writes the Estonian author Mihkel Mutt in the daily Postimees. "Has the free market economy been discredited? Or at least neoliberalism? Can we expect paradigmatic changes to take place? ... Since 2002 many financial managers seem to have acted like casino visitors who can no longer stop raising the stakes. The market economy would be perfect if people were rational, and only rational decisions were taken. But humans are not rational, they are also driven by impulse. ... It would only be sensible to step up regulation in phases of economic overheating. The earlier the bubble is burst, the fewer unpleasant surprises await us."

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