As a psychology major in my B.A., with an emphasis on natural sciences besides, when I got into Economics in grad school I was amazed at the full rationality assumption of almost all models and wondered why they (economists) did not learn from reality. Thaler, at least is a realist on human behaviors.
The lack of connection to reality was part of the malpractice that led macroeconomics to descend into the free market utopianism of ca. 1970s-2007/8. Macro is still in dispute, but hopefully it can evolve towards more emphasis on actual economic evidence.
A couple decades ago, the Nobel prize in Econ committee in Sweden changed the leadership (a converted—from the left-- Conservative finally was off; I interviewed for my dissertation on Sweden before the reforms in the award process & committee, and was surprised at what a jerk he was). The prize topic was broadened (in English it became the prize in social sciences) and the committee occasionally has non-economists on it since then. This reform was before Ostrom, a political scientist, was awarded the prize.
Remember, this Nobel Prize in Economics was only invented and supported by the Bank of Sweden on its 300th anniversary in 1968-69. It is not a 'real Nobel' like the ones that began at the start of the 20th century (based on Nobel's own ideas), although the money is about the same, $1m.
Charlie Rock
Dr. Charles P. Rock,
Dept. of Economics,
Rollins College,
Winter Park, FL 32789
Tel: 407-646-2152
Crock@rollins.edu
From: <MicrofinancePractice@yahoogroups.com> on behalf of "Dale Lampe dlampe21@yahoo.co.uk [MicrofinancePractice]" <MicrofinancePractice@yahoogroups.com>
Reply-To: "MicrofinancePractice@yahoogroups.com" <MicrofinancePractice@yahoogroups.com>
Date: Wednesday, October 11, 2017 at 11:22
To: "MicrofinancePractice@yahoogroups.com" <MicrofinancePractice@yahoogroups.com>
Subject: Re: [MFP] Richard Thaler's behavioral economics recognized (yes, it is not new!)
Actually, if one has spent any time looking at markets, they will soon realize that economic decision making is not merely guided by classical theory. Congratulations to Dr. Thaler, and must take a look at his work, but I would also recommend Elinor Ostrom's work. Besides her keen insights into economic behavior, she also remains the only woman to date to have received the Nobel in Economics. That might be worth looking into. I can only remember one female professor of economics in my undergraduate and graduate studies. Why is that?
Dale
From: "Anuj Jain ajain@stfx.ca [MicrofinancePractice]" <MicrofinancePractice@yahoogroups.com>
To: "MicrofinancePractice (MicrofinancePractice@yahoogroups.com)" <MicrofinancePractice@yahoogroups.com>
Sent: Wednesday, 11 October 2017, 10:43
Subject: [MFP] Richard Thaler's behavioral economics recognized (yes, it is not new!)
Behavioural Economics!
All Economists and Bankers- step back, take a look. There are many interviews floating around right now, listen to this pod-cast, if you may….
Many of us in social economics and finance know this intuitively, for we have been in the proximity of people and communities, and seen behaviours from close quarters. But some of us have suspended our own intuitive insights, and rather believed in classical models of banking and economics.
Financial Diaries, and Portfolios of the Poor have been useful contributions in our own field, even though, I believe, we haven't used that insights enough in our collective work, and we knew about what was proposed in these books much before those work came out, through our own everyday experiences and interactions in communities.
My own sense is that –
- some of behavioural economics and insights into 'emotional economic beings' can be more generalised, and yet, others can't be – for there are massive contextual variations – cultural codes, economic realities, consumer preferences. Why many women in south Asia will continue to invest in Gold jewellery knowing well that it loses its value over time; and why in many places small farmers will not give up farming even when they continue to make losses more frequently than profits and others leave farming; why we see vast variations of different types of economic and financial behaviours in financial diary insights/ works of FSD Kenya, many others, why some prefer to become economic refugees and others don't? ….. So, what shall we generalise and what we make sure to understand in a more nuanced fashion (?)- it is a fascinating pluralistic reality, something that would keep us busy learning all our lives.
- we now know for sure (I think) that technical solutions such as micro-credit, microfinance, digital finance, enterprise development, value chain work – won't fix massive economic inequity issue we all face today; unless we look at behavioural economics at the systems level, and rebalance the powers. The challenge is massive, but articulating the problem right, is perhaps half the battle won.
It is a bit of a pity that Noble Prize as an institution legitimises some of these otherwise widely understood social behaviours; but then, hey, we will take it! So, what does it mean for us, if anything?
anuj
Anuj K. Jain
Faculty, Development Leaedrship, Inclusive Economies (Microfinance, Market Systems, Urban Economies), Partnerships
Sr. Project Specialist| COADY International Institute
St. Francis Xavier University, Antigonish, Nova Scotia, B2G 2W5| Ph: 902-872-0521
Posted by: Charlie Rock <crock@rollins.edu>
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