Dan Kahneman on Irrational Everything

Good interview with Princeton psychologist (and Nobel economics winner) Dan Kahneman about "irrational everything" when it comes to markets:

"I once told a story about this: We once traveled from New York to Boston on a Sunday night, and we saw a car on fire on the side of the road. A week later, again on a Sunday night, we were traveling and again saw a car on fire in the same place. The fact is, we were less surprised the second time than the first because we had learned a rule: Cars burn at this spot.

"We find this everywhere – the speed at which people create rules, norms and expectations, even when they know it’s ridiculous. This is the intuitive method at work. It remains true that whenever I travel, I always look for burning cars at that spot."

More here.