1. The
Historical Roots of Behavioral Economics
As Simon (1987, p. 612) noted, the term
“behavioral economics” is a bit odd
(unusual or
unexpected).
“The phrase ‘behavioral economics’ appears
to be a pleonasm (the use of more
words than necessary).
What ‘non-behavioral’
economics can we contrast with it? The answer to this question is found in the
specific assumptions about human behavior that are made in neoclassical economic
theory.”
These assumptions are familiar to all
students of economic theory.
(i)
Agents have
well-defined preferences and unbiased
(you can't
have a favorite, or opinions that would color your judgment)
beliefs and expectations.
(ii)
They make optimal
choices based on these beliefs and preferences.
This in turn implies that
agents have infinite cognitive abilities
(brain-based skills we
need to carry out any task from the simplest to the most complex)
(or, put another way, are as
smart as the smartest economist) and infinite willpower since they choose what
is best, not what is momentarily tempting
(something
that is tempting seems
very good and you would like to have it or do it).
(iii)
Although they may act altruistically,
especially toward close friends and family, their primary motivation is self-interest. It is these assumptions that
define Homo economicus, or as I like to call them, Econs. Behavioral economics simply replaces Econs with Homo
sapiens, otherwise known as Humans. To many economists these assumptions, along
with the concept of “equilibrium,” effectively define their discipline; that
is, they study Econs in an abstract economy rather than Humans in the real one.
But such was not always the case. Indeed, Ashraf, Camerer, and Loewenstein
(2005) convincingly document that Adam Smith, often considered the founder of
economics as a discipline, was a bona
fide (genuine;
real, without intention to deceive) behavioral economist.
Consider just three of the most important concepts of
behavioral economics: overconfidence
(more confident than it
is sensible to be),
loss aversion (loss aversion refers to people's
tendency to prefer avoiding losses to acquiring equivalent gains),
and self-control.
On overconfidence Smith (1776, p. 1) commented on “the
overweening (excessively arrogant or immodest)
conceit (way of behaving) which the greater
part of men have of their own abilities” that leads them to overestimate their
chance of success. On the concept of loss
aversion (loss
aversion refers to people's tendency to prefer
avoiding losses to acquiring equivalent gains) Smith
(1759, p. 176–177) noted that “Pain … is, in almost all cases, a more pungent (very strong and sharp) sensation (a feeling) than the
opposite and correspondent pleasure.” As for self-control, and what we now call
“present bias,” (is the tendency
to rather settle for a smaller present reward than to wait for a larger future
reward, in a trade-off situation)
Smith (1759, p. 273) had this to say: “The pleasure
which we are to enjoy ten years hence
(used for saying how
many years, months, or days from now something will happen), interests us
so little in comparison with that which we may enjoy today.” George Stigler (American economist whose incisive and
unorthodox studies of marketplace behaviour and the effects of government regulation won him
the 1982 Nobel Prize for Economics)
was fond of saying that there was nothing new in
economics, it had all been said by Adam Smith. It turns out that was true for
behavioral economics as well. But Adam Smith was far from the only early
economist who had good intuitions about human behavior. Many who followed
Smith, shared his views about time discounting
(to reduce the price of
something). For example, Pigou (1920, p. 21) famously wrote that
“Our telescopic faculty (telescopic
faculties probably means that savings, as a whole, are less than what is
"optimal") is defective and … we therefore see future
pleasures, as it were, on a diminished scale.”
Similarly Fisher (1930, p. 82), who offered the first
truly modern economic theory of intertemporal
choice (is
an economic term describing how an individual's current decisions affect what
options become available in the future. Theoretically, by not consuming today,
consumption levels could increase significantly in the future, and vice versa),
did not think it was a good description of behavior.
He offered many colorful stories to support this skepticism: “This is
illustrated by the story of the farmer who would never mend his leaky roof.
When it rained, he could not stop the leak, and when it did not rain, there was
no leak to be stopped!” Keynes (1936, p. 154) anticipated much of what is now
called behavioral finance in the General Theory. For example, he observed that
“Day-to-day fluctuations in the profits of existing investments, which are
obviously of an ephemeral and non-significant character, tend to have an
altogether excessive, and even absurd, influence on the market.” Many
economists even thought that psychology (then
still in its infancy) should play an important
role in economics. Pareto (1906, p. 21) wrote that “The foundation (the lowest load-bearing part of a building)
of political economy, and, in general of every
social science (Social science
is the scientific study of human beings), is evidently psychology.
A day may come when we shall be able to decide the
laws of social science from the principles of psychology.” John Maurice Clark
(1918, p. 4), the son of John Bates
Clark (was
an American neoclassical economist. He was one of the pioneers of the marginalist
revolution and opponent to the Institutionalist
school of economics, and spent most of his career as professor at Columbia
University, 1847 –1938), went further. “The economist
may attempt to ignore psychology, but it is sheer (very large) impossibility
for him to ignore human nature … If the economist borrows his conception of man
from the psychologist, his constructive work may have some chance of remaining
purely economic in character. But if he does not, he will not thereby avoid
psychology. Rather, he will force himself to make his own (to change or deal with something in a way that makes it
seem to belong to you),
and it will be bad psychology.” It has been nearly 100 years since Clark wrote
those words but they still ring true, and behavioral economists have been
taking Clark’s advice, which is to borrow some good psychology rather than
invent bad psychology. Why did this common sense suggestion fail to gain much traction (the degree to which a new idea, product etc. becomes popular or more widely accepted) for so long?
Комментариев нет:
Отправить комментарий