Discussion of “behavioral economics”

“Behavioral economics” (colin camerer) and “incentives and Self-Control” (Ted O’Donoghue and Matthew Rabin)

Ariel Rubinstein

    Research output: Chapter in Book/Report/Conference proceedingChapter

    Abstract

    For me, economics is a collection of ideas and conventions that economists accept and use to reason with. Namely, it is a culture. Behavioral economics represents a transformation of that culture. Nonetheless, as pointed out by Camerer and Loewenstein (2003), its methods are pretty much the same as those introduced by the game theory revolution. At the core of most models in behavioral economics there are still agents who maximize a preference relation over some space of consequences and the solution in most cases still involves standard equilibrium concepts. However, the behavioral economists are not committed to what is usually referred to as rational motivations. An economic fable (or a model, as we would call it) that has at its core fairness, envy, present-bias and the like, is by now not only permitted but even preferred. Why now? Perhaps, economists have finally realized that orthodox economic models are too unrealistic and dogmatic. And perhaps it is the result of our constant search for new directions in research. One might also ask why other ideas (such as those of bounded rationality) are less welcome than those of behavioral economics. I think that this is because the profession prefers progress in small steps. The models of behavioral economics are not that different from those of applied economics and thus are not perceived as a threat.

    Original languageEnglish (US)
    Title of host publicationAdvances in Economics and Econometrics: Theory and Applications, Ninth World Congress, Volume II
    PublisherCambridge University Press
    Pages246-254
    Number of pages9
    ISBN (Electronic)9781139052276
    ISBN (Print)0521692091, 9780521871532
    DOIs
    StatePublished - Jan 1 2009

    Fingerprint

    Self-control
    Incentives
    Economists
    Economics
    Game theory
    Preference relation
    Bounded rationality
    Fairness
    Threat
    Present bias
    Envy
    Applied economics

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)

    Cite this

    Rubinstein, A. (2009). Discussion of “behavioral economics”: “Behavioral economics” (colin camerer) and “incentives and Self-Control” (Ted O’Donoghue and Matthew Rabin). In Advances in Economics and Econometrics: Theory and Applications, Ninth World Congress, Volume II (pp. 246-254). Cambridge University Press. https://doi.org/10.1017/CBO9781139052276.011

    Discussion of “behavioral economics” : “Behavioral economics” (colin camerer) and “incentives and Self-Control” (Ted O’Donoghue and Matthew Rabin). / Rubinstein, Ariel.

    Advances in Economics and Econometrics: Theory and Applications, Ninth World Congress, Volume II. Cambridge University Press, 2009. p. 246-254.

    Research output: Chapter in Book/Report/Conference proceedingChapter

    Rubinstein, A 2009, Discussion of “behavioral economics”: “Behavioral economics” (colin camerer) and “incentives and Self-Control” (Ted O’Donoghue and Matthew Rabin). in Advances in Economics and Econometrics: Theory and Applications, Ninth World Congress, Volume II. Cambridge University Press, pp. 246-254. https://doi.org/10.1017/CBO9781139052276.011
    Rubinstein A. Discussion of “behavioral economics”: “Behavioral economics” (colin camerer) and “incentives and Self-Control” (Ted O’Donoghue and Matthew Rabin). In Advances in Economics and Econometrics: Theory and Applications, Ninth World Congress, Volume II. Cambridge University Press. 2009. p. 246-254 https://doi.org/10.1017/CBO9781139052276.011
    Rubinstein, Ariel. / Discussion of “behavioral economics” : “Behavioral economics” (colin camerer) and “incentives and Self-Control” (Ted O’Donoghue and Matthew Rabin). Advances in Economics and Econometrics: Theory and Applications, Ninth World Congress, Volume II. Cambridge University Press, 2009. pp. 246-254
    @inbook{dbf7137cb6f14929b8b6afab8c9dc486,
    title = "Discussion of “behavioral economics”: “Behavioral economics” (colin camerer) and “incentives and Self-Control” (Ted O’Donoghue and Matthew Rabin)",
    abstract = "For me, economics is a collection of ideas and conventions that economists accept and use to reason with. Namely, it is a culture. Behavioral economics represents a transformation of that culture. Nonetheless, as pointed out by Camerer and Loewenstein (2003), its methods are pretty much the same as those introduced by the game theory revolution. At the core of most models in behavioral economics there are still agents who maximize a preference relation over some space of consequences and the solution in most cases still involves standard equilibrium concepts. However, the behavioral economists are not committed to what is usually referred to as rational motivations. An economic fable (or a model, as we would call it) that has at its core fairness, envy, present-bias and the like, is by now not only permitted but even preferred. Why now? Perhaps, economists have finally realized that orthodox economic models are too unrealistic and dogmatic. And perhaps it is the result of our constant search for new directions in research. One might also ask why other ideas (such as those of bounded rationality) are less welcome than those of behavioral economics. I think that this is because the profession prefers progress in small steps. The models of behavioral economics are not that different from those of applied economics and thus are not perceived as a threat.",
    author = "Ariel Rubinstein",
    year = "2009",
    month = "1",
    day = "1",
    doi = "10.1017/CBO9781139052276.011",
    language = "English (US)",
    isbn = "0521692091",
    pages = "246--254",
    booktitle = "Advances in Economics and Econometrics: Theory and Applications, Ninth World Congress, Volume II",
    publisher = "Cambridge University Press",
    address = "United Kingdom",

    }

    TY - CHAP

    T1 - Discussion of “behavioral economics”

    T2 - “Behavioral economics” (colin camerer) and “incentives and Self-Control” (Ted O’Donoghue and Matthew Rabin)

    AU - Rubinstein, Ariel

    PY - 2009/1/1

    Y1 - 2009/1/1

    N2 - For me, economics is a collection of ideas and conventions that economists accept and use to reason with. Namely, it is a culture. Behavioral economics represents a transformation of that culture. Nonetheless, as pointed out by Camerer and Loewenstein (2003), its methods are pretty much the same as those introduced by the game theory revolution. At the core of most models in behavioral economics there are still agents who maximize a preference relation over some space of consequences and the solution in most cases still involves standard equilibrium concepts. However, the behavioral economists are not committed to what is usually referred to as rational motivations. An economic fable (or a model, as we would call it) that has at its core fairness, envy, present-bias and the like, is by now not only permitted but even preferred. Why now? Perhaps, economists have finally realized that orthodox economic models are too unrealistic and dogmatic. And perhaps it is the result of our constant search for new directions in research. One might also ask why other ideas (such as those of bounded rationality) are less welcome than those of behavioral economics. I think that this is because the profession prefers progress in small steps. The models of behavioral economics are not that different from those of applied economics and thus are not perceived as a threat.

    AB - For me, economics is a collection of ideas and conventions that economists accept and use to reason with. Namely, it is a culture. Behavioral economics represents a transformation of that culture. Nonetheless, as pointed out by Camerer and Loewenstein (2003), its methods are pretty much the same as those introduced by the game theory revolution. At the core of most models in behavioral economics there are still agents who maximize a preference relation over some space of consequences and the solution in most cases still involves standard equilibrium concepts. However, the behavioral economists are not committed to what is usually referred to as rational motivations. An economic fable (or a model, as we would call it) that has at its core fairness, envy, present-bias and the like, is by now not only permitted but even preferred. Why now? Perhaps, economists have finally realized that orthodox economic models are too unrealistic and dogmatic. And perhaps it is the result of our constant search for new directions in research. One might also ask why other ideas (such as those of bounded rationality) are less welcome than those of behavioral economics. I think that this is because the profession prefers progress in small steps. The models of behavioral economics are not that different from those of applied economics and thus are not perceived as a threat.

    UR - http://www.scopus.com/inward/record.url?scp=84924742334&partnerID=8YFLogxK

    UR - http://www.scopus.com/inward/citedby.url?scp=84924742334&partnerID=8YFLogxK

    U2 - 10.1017/CBO9781139052276.011

    DO - 10.1017/CBO9781139052276.011

    M3 - Chapter

    SN - 0521692091

    SN - 9780521871532

    SP - 246

    EP - 254

    BT - Advances in Economics and Econometrics: Theory and Applications, Ninth World Congress, Volume II

    PB - Cambridge University Press

    ER -