Welcome to the Center for Behavioral Economics.
Behavioral economics is an approach to economics based on the idea that economics behavior is, after all, behavior, and so the better we do at describing human behavior, the better our economics will be.
Why does that need a special name? Why is it not just called “economics”? Because what we usually call economics, as practiced today, is based on a model embodying several highly unrealistic assumptions about human behavior, a model called “homo economicus.” Fundamentally, the model says that, when given a choice, humans always compare the costs and benefits of alternative actions and then select the action that benefits them the most. Behavioral economics has been developed over about the last 35 years in an attempt to restore some realism to economics, by incorporating more factors about how people actually behave when presented with a choice.
In this attempt, it has relied primarily on cognitive psychology for insights, understanding, and a conceptual model for behavior. That reliance has not served it well, because cognitive psychology is an inadequate model of persons and behavior. It accepts the stimulus-response model, but postulates “mental processes” mediating between stimulus and response, those processes being information processing ones. The model is thus basically a machine model of persons. Since persons are not, in fact, machines, you can see the problem.
More particularly, persons are not information processing devices, and their behavior is not a matter of stimulus and response, even with information processes interposed. Using cognitive psychology to talk about persons is much like trying to draw a picture of a person with four straight lines: there just aren’t enough conceptual resources to articulate the necessary facts. That lack has seriously handicapped behavioral economics.
Descriptive Psychology provides the necessary foundation for a real science of behavioral economics, because it addresses the full range of aspects of human behavior, precisely, systematically, and comprehensively. It’s the real deal: the first complete conceptual system for talking precisely about people and what they do.
The purpose of this Center is to provide a place for exploring the use of Descriptive Psychology to develop the science of behavioral economics.
Everyone is welcome to read, comment, and submit their thoughts, criticisms, and ideas. Don’t be shy, and don’t feel ideas have to be well thought out. Some of the best discussions come from a 10%-baked idea. My goal is to have an active, exciting, and productive Center. Productive of what? Good behavioral economics, in which “behavioral” doesn’t get short shrift.
