David Howden reviews Daniel Kahneman’s book /Thinking, Fast and Slow/. Kahneman won the Nobel Prize in Economics, but is a psychologist. Its a very interesting review and Howden shows us the weakness in Kahneman’s analysis.
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If we humans are irrational, then certainly nothing good could come out of us being voters, politicians or bureaucrats.
Yeah it’s so strange that the left thinks that only their people are not irrational or that once irrational humans get elected they quit being irrational!
Excellent review! While I think behavioral econ corrects the extremes of neoclassical I also think it goes too far in the opposite direction. It is the antithesis to neoclassical’s thesis, but the truth lies in the synthesis.
Also, I have seen very little in behavioral econ that improves over the decades of research in marketing and public relations. I think an economist would leap ahead of behavioral by simply reviewing the decades or research in those fields.
Humans are usually rational, but they are also ignorant and value things differently. Those explain why human behavior doesn’t follow math models. Neoclassical economists forget about the subjective revolution in econ over a century ago.
Neoclassical economists insist that people are irrational if their behavior doesn’t conform to that of the DSGE models. But the DSGE modelers are the irrational ones for accepting models with unrealistic assumptions.