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Whose mind is it anyway?

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There’s an interesting exchange on the SJDM mailing list. It started with a query:

I agreed to give a talk to the University Economics Society here next week with the title: “Why Psychologists know more about Economic Behaviour than Economists”. Any suggestions JDMers might have would be interesting.

and led to a flurry of responses. Some choice quotes:

You could exploit an inadvertent ambiguity in your talk title, and claim that you meant that psychologists know more about economic behaviour than they do about economists. Indeed, economists are mysterious beings. Many persevere in the belief that people must behave optimally, at least on average, and they seem perpetually baffled by basic psychological phenomena that seem completely intuitive to one’s proverbial grandparent. I feel that psychologists indeed understand them quite poorly.

Perhaps the core argument is that we [Psychologists] go out and look at the animals (at least now and then) while the economists very rarely do.

The answer seems to be quite simple. Economists are bound to the ‘rational model’ whereas psychologists are not.

What economists think about psychologists:
1. Psychologists only study rats, pigeons, college freshman, and crazy people.
2. (Perhaps due to the above,) psychologists are not very rational.

What psychologists think about economists:
1. Economists stubbornly hold to a rational model of man(kind) that (they must know) is obviously wrong.
2. Economists can never agree about what will happen to our economy.

One reason psychologists know more about behavior than economists is that they are interested in the mental processes that underlie it, whereas economists tend not to care about about the workings of the black-box between our ears, preferring to remain agnostic about these issues. In this way they are like behaviorists, as more than a few (non-behaviorist) psychologists have pointed out. With a self- imposed constraint to only study behavior, it seems doubtful that they will be able to ever hold the upper-hand in understanding any behavior.

Amos Tversky told me about a discussion he had with a group of economists at a conference where Danny Kahneman presented some of their empirical work demonstrating systematic inconsistencies in choice behavior. A small group of economists were intrigued by the findings but claimed that they were not true and would disappear at the aggregate level, under proper incentives, etc. The discussion continued over dinner with no resolution and Amos suggested a change of topic. He asked the economists whether president Carter’s economic policy and their spouses’ shopping behavior were rational. The response was negative. Amos* noted: ‘After a few more questions, it dawned on the participants that despite their commitment to universal rationality, they were denying the rationality of any particular individual, such as the President or the economist’s spouse.’

*Tversky, A. (1982). “Remarks on the study of decision making.” In G. Ungson and D. Braunstein: _Decision Making: An Interdisciplinary Inquiry_. Boston: Kent Publishing Co.

Economics, Psychology…Decision Science News only wishes to observe that this makes for some fine Sociology. It also wonders what multi-disciplinary folks like Gelman think (Addendum: my wish answered. Addendum 2: Some spirited commenting at Economist’s View).

Photo credits: http://www.flickr.com/photo_zoom.gne?id=1607234278&size=s & http://www.flickr.com/photo_zoom.gne?id=1018906077&size=s