Tag Archives: Rationality

That is my op-ed in today’s WSJ. You don’t get to pick your headlines, and I am guessing “The Strategic Logic of Russia’s War on Ukraine” will get misinterpreted somewhat.My view: this is a war driven by Mr. Putin’s psychology, but like all psychological roots of war, they are only decisive when the strategic bargaining space is so narrow. Some will see this as a rationalist take on war, but this is only partly true (and it’s a term I loathe). That’s because it’s not an either/or—strategic...

So much for rational agency based on autonomous preferences as viable assumption for a realistic economics. The world in which we live is socially constructed, which is hardly surprising since humans are social animals (homo socialis) more than economic animals (homo economicus). Most are crowd-followers behaving endogenously within the social system they inhabit rather than exogenous agents acting independently of the social system.Stumbling and MumblingOn socially influenced preferences...

Reading them was another of those occasions when I felt a powerful urge to say, ‘Well, duh!’. Putin, we’re told, only uses force when vital interests are at stake and a cost-benefit analysis suggests that benefits will outweigh costs. Of course! What else would you expect? After all, what’s the alternative? To wage war when vital interests are not at stake and when you don’t expect to end up better off? That would be crazy. … And that’s where this article’s statement of the blindingly...

A statistics professor looks at the economics profession. This is an awkward topic to write about. I’m not saying I think economists are mean people; they just seem to have a default mode of thought which is a little perverse. In the traditional view of Freudian psychiatrists, which no behavior can be taken at face value, and it takes a Freudian analyst to decode the true meaning. Similarly, in the world of pop economics, or neoclassical economics, any behavior that might seem good, or...

Paraphrasing that nineteenth-century critic of political economy, we might say that “economic decision-making appears, at first sight, a very trivial thing, and easily understood. Its analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties.” We might credit Thaler and other behavioral economists, then, for having taken a first step in challenging the traditional neoclassical account of rational decision-making. But they stop...

When criticising game theory you often get the rather uninformative and vacuous answer that we all have to remember that game theory — as is mainstream neoclassical theory at large — is nothing but ‘as-if-theory’ built on ‘as-if-rationality.’ As Ariel Rubinstein has it, however, this only shows that “the phrase ‘as if’ is a way to avoid taking responsibility for the strong assumptions upon which economic models are founded” … It's bad enough when game theory is applied uncritically to...

I've been trying to read this. Not a huge fan of the field of behavioral economics (or here; subscription required). Don't get me wrong, yes, it provides some critiques of elements of the mainstream (marginalist) approach, regarding essentially the notion of individual rationality, as did the work of, say, Herbert Simon, in the past. People don't tend to act in a rational way, at least not in the substantive way that is prescribed by the mainstream.Evidence on the notion of universal...