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Economists researching psychological topics, again January 4, 2016

Posted by larry (Hobbes) in economics, Game Theory, Psychology.
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Susan Webber aka Yves Smith makes a trenchant critique of this research undertaken by economists. If you look at the early work of Tversky and Kahneman, you find that, essentially, people are classed as being irrational if they fail to follow the Kolmogorov axioms (of probability) first set out in 1938. Game theorists tend to view people as irrational if they fail to maximize their utilities, whatever these might be. Gerd Gigerenzer has shown fairly conclusively in a number of studies that people, even medics, do not understand probabilities if presented to them in the standard way. But do understand them if presented in what he calls standard frequencies, for instance, asking people what the odds are for people like X to be (or have) Y. Behavioral economics, except as practiced by a few exceptional researchers, is almost unremittingly awful.

This research is another example of discipline overreach. Physicists do it. Biologists do it. Social scientists tend not to. But perhaps not for the best reasons. In this particular case, the researchers are investigating what makes for a “team player”, what leads to social cooperation, and the like.


The author of this piece is a personnel economist. WTF is that?

Another example is economists researching into happiness. They are completely missing the point. Psychologists have shown that what makes people happy is all over the place, but what they wish to avoid is much more circumscribed. And these researchers, in addition, think contentment may be a more tractable research topic than happiness. Another example of economists not doing their reading. This could be the title of a book: Economists, Why Don’t They Read?.

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