Tokyo:
I marvel at how the idea of behavioral economics continues to take people including many top economists by surprise - if not by storm.
I marvel at how the idea of behavioral economics continues to take people including many top economists by surprise - if not by storm.
The tribal resistance
to what has always seemed obvious to me about human nature - that we routinely
choose, spend and vote against our self-interests; just look around you - is
disturbing, though understandable. Thomas Franks, anyone?
After all, folks
don't like to change their minds; it requires honest introspection and causes
too much painful cognitive dissonance. No matter how objectively wrong people
can be, they are absolute in their certainty about being right. And no matter
how smart the status quo may be, as Thomas Kuhn reminded us in The
Structure of Scientific Revolutions, even very smart people just don't
like to compete with (let alone contradict) conceptual frameworks and schools
of thought they used, built or even created in order to succeed.
The most recent push-back by stubborn adherents to neoclassical economics is underway with news
that the
University of Chicago’s Dr. Richard Thaler has won the Nobel Prize in Economics.
Dr. Thaler joined Dr.
Daniel Kahneman, among a handful of other distinguished scholars, in recent
years to question the premise that humans are rational economic actors - even
in the aggregate. We are most certainly not rational optimizers, at least not
always or often.
What's so
interesting about this case, however, is that Dr. Thaler is actually persuading growing numbers
of economists of his premise, that humans are not purely rational decision
makers. He's doing so in patient, even-handed, fact-based and respectful
dialogue with colleagues who disagree. Over time, the obvious strengths of his arguments are winning them over.
As society suffocates
from an unrelenting tsunami of angry, uninformed opinion, Dr. Thaler's patient efforts
in this regard alone should merit a Nobel Prize.
Photo courtesy of ABC News.