Great Economics Paper in Press: Unifying Behaviorial Sciences

In My Humble Opinion
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Hey econ folk,

Here’s an interesting paper that I came across yesterday. I had an Interesting Thought and googled to see if there was anything out there, and this was the only econ-related hit that was returned. It’s not what I was thinking about, but it is interesting. It’s set for publication this year in Behaviorial and Brain Sciences. It is titled A Framework for the Unification of the Behaviorial Sciences.

I haven’t finished it yet, having only skimmed it and read a few sections, but the gist seems to be pretty clear. What’s interesting, is that matches a lot of what I’ve said in the past — at least to myself as I mutter and shuffle through my day — that animals are rational actors because it’s not wasteful. The author drops the word rational and talks of a “beliefs, preferences, and constraints” model (BPC), and instead of individual rationality, he talks about “fitness.” It makes sense: the brain as a decision making organ; decisions being made for maximal fitness, subject to constraints of knowledge and processing; and preferences — as the basis for making decisions — should reflect this, transitivity and completeness of preferences looking to be likely outcomes of the need for fitness. (I once asked in GQ about the sort of advantage needed to be evolutionarily successful, and the response indicated a small margin was enough to deep six a genetic strain.)

Section 9 of the paper could be a standard response to a lot of threads on the SDMB. I wanted to point out one great example he uses, however, about the limits of human computation. One reason that we’re give as to why people (and animals) aren’t rational is that we can’t solve those sorts of math problems in out heads. To me, the argument is silly, since we have a brain to do the work, and for evolution’s sake, it should be doing a fairly good job. I’m reminded of the dog who did calculus (not really) by picking the optimal path between beach & water for retrieving sticks. The dog didn’t solve the problem explicitly. The example this author uses is a billiards player who doesn’t solve differential equations explicitly, but still manages to make her shots.

Anyhoo, I just wanted to share. If you’ve any interesting thoughts, I’d like to hear them.

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I guess I’m one of the dozen or so in the expected audience for this thread, so I noted it a couple of days ago.

My first reponse was to look at the references and see that I’m not in them. I had a chapter in a book a few years ago on pretty much this sort of thing. I was interested in altruism, norms, rationality and rules. You read Jon Elster, Dawkins, Akerlof and Toobey and Cosmides and then off you go.

There’s a lot of this sort of stuff about. Economics has been a lot more open to behavioural and evolutionary- type stories over the past few years, but a lot of the work of the profession still pretty much ignores it.

I know I do. For the most part I don’t worry about what it means to be rational or how institutions use norms or whether preferences are stable or whether they reflect welfare etc etc - I use a utility function just as a means to assume that people like stuff and they respond to prices in ways that add up in certain sensible ways allowable by the data. Whereas I used to muse over whether it was possible for a person to optimise, now I will check to see whether there’s enough data to parameterise a Klein-Rubin and if there isn’t, go ahead and do the job CES. I used to be a beard stroker, now I’m a basket weaver. (It’s been a long week.)

I’ve only glanced at the paper. It looks well worth reading, and I’ll get back to you about it. Certainly this

is right along side my position. My view, however, is that to the extent that economics relies on rationality stronger than “likes stuff, has downward-sloping demand curves” it is suspect. There’s a great recent piece by (IIRC) Akerlof on microfoundations that goes into that.

If there’s a piece in the references that I’d recommend you read, it’s Heiner (1983). Beautiful. And Toobey and Cosmides, if you haven’t already seen it. It’s overblown (and unduely patronising to social science) but great.