Here’s a nice Wall Street Journal video featuring Duke Professor Dan Ariely’s thoughts on irrationality and the current financial crisis.

*Full disclosure – sections of the video were actually pulled from another video we produced here at Fuqua.

Imagine this: You are one of the world’s leading finance scholars and have spent the past several weeks providing insights into the current financial crisis to media outlets around the world. And then you are asked to explain the current credit crisis to a room full of middle schoolers. How would you explain mortgage and credit markets, securities and banking to even the brightest of adolescents?

This is exactly the situation in which Professor Cam Harvey found himself when he decided not to explain the crisis to his son’s middle school classmates, but to allow the students to educate themselves by performing and viewing a play he wrote for them.

Harvey’s play, “The Credit Crisis: A Middle School Play” debuted at Durham’s Triangle Day School on Friday, October 10. Media coverage of the play included stories by WRAL-TV, WNCN-TV, and WUNC Radio.

Dan Ariely considers the mortgage business today on his Predictably Irrational blog:

Here is my perspective on the sub-prime mortgage crisis: When the housing market was hot, all the bankers that gave out loans assumed that their customers didn’t want their house to go into foreclosure, and that they would act accordingly. The first assumption was correct-no one wanted their house to go into foreclosure. But the second assumption, that consumers knew what to do in order to make sure they didn’t lose their house, was wrong, very wrong. The basic problem is that it is extremely difficult to calculate the optimal amount that any of us should borrow on a mortgage. Think about it: If you had to get a new house right now, what is the ideal amount to spend and how much of it should you take as a mortgage? Read more.