Based on contemporary research in decision making, negotiation, and cognitive psychology, we offer a cognitive perspective to explain the failure of governments to create what Stiglitz (1998) calls near-Pareto improvements. We examine the role of human judgment in the failure to find wise...

I discuss several forms of bias, or fallacious thinking, that lead to parochialism, that is, a willingness to sacrifice self-interest for in-group members while neglecting or underweighing negative effects on outsiders, so that an out-group could lose more than the in-group gains from the...