When studying economic theory, one learns early on about the concept of the "rational man." The idea is that in any market economy, decisions are made based on rationality. . In order to understand how the market works, one is told, one has to simply accept that man is rational and would never buy something for more than it is worth, or sell it for less than the market value. .. about a decade ago, a group of physicists met with a group of economists at the Santa Fe Institute and questioned them on this point. The physicists, having experienced real human beings, could not understand how anyone could create an entire discipline based around the assumption that humans are rational. In the 1970s, two professors, Daniel Kahneman and Amos Tversky, decided to test just how rational people are when making decisions involving risk. They conducted an enormous number of studies that show that, most of the time, people make decisions that are demonstrably irrational... The work of Kahneman and Tversky did change the science of economics. It even spawned a new field called behavioral economics. Unfortunately, it has not been widely adopted within the discipline of risk management. It is important to the profession that this work take a more prominent role.