Scitovsky, Behavioural Economics, and Beyond

Abstract

Scitovsky is known as a forerunner of behavioural economics simply because he drew heavily on psychology and claimed that people's choices may be 'joyless' (Scitovsky, The joyless economy, 1976). However, a careful reformulation of his analysis shows that he anticipated a number of insights (also with respect to Kahneman's 'two-systems of thought') which suggest new lines of inquiry from an original and different perspective. These insights of Scitovsky regard the following aspects: Uncertainty as a condition where the outcomes of choosing a particular option (novelty) is partially unknown; the case of individual 'consumption skill' (inclusive of emotions) that finds this uncertainty desirable when it is challenging; the case of increasing such skill so as to change preferences and make choices more efficient; the case of failing to increase such skill so as to make addictive harmful products an alternative and more tempting option.

A Reinvention of Consumption.

“…The second source of uncertainty is called consumption skill. According to Scitovsky, individuals develop consumption skills through exploration and learning (Pugno 2014).…”