09 August 2013

Behavioral Econom{ics, ists}

Bryan Caplan | EconLog | Nudge, Policy, and the Endowment Effect

I believe in behavioral economics. But behavioral economists deeply disappoint me.
One thousand times: Amen!
They ought to be paragons of rationality — to puritanically avoid the foibles they so ably document. In practice, however, behavioral economists are all too human. They use nudge to rationalize a little extra paternalism, when they ought to use their insight to systematically rethink paternalism from the ground up.
I am a big believer in epistemic and cognitive humility, not only when it comes to economic modeling, political philosophy or policy debates, but in all aspects of living. I appreciate behavioral economics for emphasizing these and related concepts. But I will find it hard to truly respect the field until they turn their scopes on themselves and begin considering not only the bounded rationality and finite knowledge of citizens and consumers, but of regulators and rule-makers as well.

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