by From Lars Syll You know, and I know, that we do not live in a world of Econs. We live in a world of Humans. And since most economists are also human, they also know that they do not live in a world of Econs … Nevertheless, this model of economic behavior based on a population consisting only of Econs has flourished, raising economics to that pinnacle of influence on which it now rests. Critiques over the years have been brushed aside with a gauntlet of poor excuses and implausible alternative explanations of embarrassing empirical evidence … It is time to stop making excuses. We need an enriched approach to doing economic research, one that acknowledges the existence and relevance of Humans. The good news is that we do not need to throw away everything we know about how economies and
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from Lars Syll
You know, and I know, that we do not live in a world of Econs. We live in a world of Humans. And since most economists are also human, they also know that they do not live in a world of Econs …
Nevertheless, this model of economic behavior based on a population consisting only of Econs has flourished, raising economics to that pinnacle of influence on which it now rests. Critiques over the years have been brushed aside with a gauntlet of poor excuses and implausible alternative explanations of embarrassing empirical evidence …
It is time to stop making excuses. We need an enriched approach to doing economic research, one that acknowledges the existence and relevance of Humans. The good news is that we do not need to throw away everything we know about how economies and markets work. Theories based on the assumption that everyone is an Econ should not be discarded. They remain useful as starting points for more realistic models. And in some special circumstances, such as when the problems people have to solve are easy or when the actors in the economy have the relevant highly specialized skills, then models of Econs may provide a good approximation of what happens in the real world. But as we will see, those situations are the exception rather than the rule.