Behavioural economics
April 15, 2011 — September 17, 2017
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To discuss: the pointlessness of behavioural economics as modified classical economics, when large data applications make this a predictive science
A new paradigm for the introductory course in economics:
Our intro courses fail to reflect the dramatic advances in economics — concerning information problems and strategic interactions, for example — since Samuelson’s paradigm-setting 1948 textbook. Missing, too, is any sustained engagement with new problems we now confront and on which economics has important insights for public policy — climate change, innovation, instability and growing inequality amongst them. This column introduces a free online interactive text — now used as the standard intro at UCL, Sciences Po, and Toulouse School of Economics — which responds.
1 Collective behavioural economics
In financial markets we have some elegant models of collective human behaviour in, e.g. Black-Scholes formulae etc.
In more general contexts, what do we do? A population of mis-specified Bayesian learners? (Shalizi 2009) A bunch of partially informed voters? Distributed learners?
Concepts to think about: Bounded rationality, rational inattention, institutions as stable orbits in behavioural systems, devious negotiation strategies …
2 Individual models
See marketing psychology.
3 Risk Perception
See the risk perception page.