Kahneman's Failed Revolution Against Economic Orthodoxy

Buturovic, Zeljka; Tasic, Slavisa

doi:10.1080/08913811.2015.1068512

Cited by 13 publications

(4 citation statements)

References 25 publications

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“…The consequences of this failure to institute mechanisms for critical self-correction, the very mark of a scientific pursuit and discipline (Canguilhem, 1989), is that the orthodox economic theory renders much mundane, taken-for-granted human action irrational (or "sub-rational"), as these human actors face amounts of information and contingencies they cannot cognitively process in the manner prescribed by analytical models (Buturovic and Tasic, 2015). A more interesting consequence from a social science perspective is how the neoclassical economic research programme (with Lakatos's, 1970, terminology) relies on expedient theorizing, theorizing that of necessity follows from initial faulty propositions, leading to inadequate predictions and ineffective policy recommendations, and that serves to save the core of the scientific programme, in this case, the theorem regarding individual utility maximization as the only legitimate and morally correct blueprint for human decision-making.…”

Section: Discussionmentioning

confidence: 99%

Coping with irrationality in orthodox economic theory

Styhre

2016

IJOA

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Purpose The purpose of this paper is to critically assess the assumptions regarding human behaviour in orthodox neoclassical economic theory. The orthodox neoclassical economic theory prescribes rational models of human behaviour, but the strictness of the criteria, developed to promote theoretical consistency and conceptual elegance, commonly fails to fully accommodate all of the empirical material. To save the core of the orthodox neoclassical economic theory research program and to neutralize and mute criticism regarding its predictive failures, its proponents engage in expedient theorizing, the expansion of the initial theoretical framework by adding ad hoc hypotheses and/or including additional explanatory factors; in many cases, dismissed as “unnecessary complications” (as in the case of morality and ethics – two conspicuously “non-economic” concepts) in the initial formulation of theoretical propositions of the core theories. Design/methodology/approach The paper reviews a body of heterogeneous literature to introduce and examine the use of expedient theorizing in economic thinking. Findings In the present case, the hyperrationalist axiom regarding the efficacy of calculative practices to maximize individual utility is accompanied by moralist concerns (and, by implication, corrective and disciplinary action) regarding the failure to adhere to such prescriptions. Expedient theorizing, thus, becomes a key mechanism in the political economy of truth that currently grants orthodox neoclassical economic theory significant authority to inform policy-making in substantial ways and considerable prestige. Originality/value The orthodox neoclassical economic theory constitutes the blueprint for policy-making and institutional change, and, therefore, the key economic ideas being the constitutive elements of the contemporary economy demand scholarly attention. The paper thus points at theoretical inconsistencies in the orthodox neoclassical economic theory and introduces the concept of expedient theorizing as its remedy.

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Section: Discussionmentioning

confidence: 99%

Coping with irrationality in orthodox economic theory

Styhre

2016

IJOA

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“…In this context there is an ongoing discourse how both decision making systems interact-sequentially or in parallel-whereas there is not enough empirical proof to validate one or the other interaction (Hodgkinson & Sadler-Smith, 2018). Controversial, because literature for intuitive decision making and its measurement is significantly lagging the rational literature stream, it might be misleading that intuition is less reliable as it has been used as explain away decision anomalies due to lacking evidence (Keren, 2013;Buturovic & Tasic, 2015;Grayot, 2020). Thus, we propose an intuitive-analytical paradox which consists of tensions that are resilient to resolution but key to unlocking the positive potential of those (Cameron & Quinn, 1988;Smith & Lewis, 2011).…”

Section: The Ideamentioning

confidence: 99%

Embracing the intuitive-analytical paradox? How intuitive and analytical decision-making drive paradoxes in simple and complex environments

Fellnhofer¹,

Sornette²

2022

Preprint

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“…Moreover, from this perspective, it is a mistake to judge System 1 based on laboratory experiments (Rizzo and Whitman 2019, 34). A system premised on rapid pattern recognition for acting within a familiar environment will produce sub-optimal decisions when placed in a novel environment, especially one which is being deliberately controlled and manipulated (Buturovic and Tasic 2015;cf. Rizzo and Whitman 2019, 188).…”

Section: Rationality: True and Falsementioning

confidence: 99%

Soft Interventionism: A Hayekian Alternative to Libertarian Paternalism

Cowen

Trantidis

2021

RBE

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Are behavioral interventions consonant with a free society? Rizzo and Whitman argue that behavioral interventions aimed at addressing self-harms are premised on an unrealistic neoclassical account of rationality. We show that the rejection of neoclassical assumptions is warranted but does not exhaust the case for what we call "soft interventionism." Following Hayek's emergent account of human action and defense of a defined role for legislation to address social challenges in commercial spontaneous orders, we argue that soft interventionism is a less intrusive form of state intervention to tackle the blurred boundaries between externalities and internalities. Nudges can be justified so long as the interventions are proportionate, based on subsidiarity and scientifically informed.

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Kahneman's Failed Revolution Against Economic Orthodoxy

Cited by 13 publications

References 25 publications

Coping with irrationality in orthodox economic theory

Coping with irrationality in orthodox economic theory

Embracing the intuitive-analytical paradox? How intuitive and analytical decision-making drive paradoxes in simple and complex environments

Soft Interventionism: A Hayekian Alternative to Libertarian Paternalism

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