Tuesday, 20 July 2010

Behavioural economists against nudging

George Loewenstein and Peter Ubel have betrayed the behavioural economics creed by suggesting that "the field has its limits" and "insights from behavioral economics are unlikely to have a major impact on health care costs".

Surely they know that it's the job of all card-carrying behavioural acolytes to promote "the behavioural economics revolution"? The New York Times has bought into it, university courses are covering "Behavioral Economics, a revolution which began c.1960", the Harvard Business Review has told us "How Behavioural Economics can Help Cure the Healthcare Crisis" and journals are promoting "the behavioural revolution" which began in the late 1980s.

I know you won't quibble over the fact that this revolution is supposed to have taken place - depending on who you read - anywhere between 1950 and 2005. Or whether the revolution is in behavioural science, economics or finance. It's our job to tell people that rational economics has been overthrown and nobody will ever believe in the neoclassical model again.

So what are Loewenstein and Ubel playing at? Just because they're two of the leading behavioural economists in the world (indeed Loewenstein is my all-time favourite - the Michael Schumacher of cognition). Do they think that they are going to enhance their reputation by trashing Richard Thaler's?

Just because Tyler Cowen agrees with something doesn't make it true (though admittedly, that's not a bad guideline). Just because Tim Harford asks whether behavioural economics is a big deal doesn't mean anyone is allowed to. Just because a commenter at the Guardian says "there is nothing new about behavioural economics" does not license an actual behavioural economist to say the same thing.

I propose that Loewenstein be suspended from the Union of Behavioural Evangelists and Lackeys (UBEL) and that we institute an emergency PR campaign to promote behavioural economics as the One True Science of all living organisms, social interactions and, for that matter, philosophy, physics and literature too.

(or we could just get it in perspective and keep on improving our models bit by bit. Stay on the line and I'll let you know the official policy soon)

2 comments:

M. said...

Nice Post! I vote for the last idea ... and for the need to build a complete model and search for a wider representation of the human agent and the determinants of behaviour ...

M. said...

Sorry, forgot to sign
Marco Novarese