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About time. Congrats to a thinker.
And "thank you" to a great explanatory essay.
What is rather amusing about the curmudgeons below is the fact that Thaler's research in fact addresses the real reasons why economics as a hard science seems to fail more often than not - that is, human irrationality and exuberance.
The science of economics - yes it is most certainly a science, albeit it not a hard one - is on a good path these days.
Every year we go through the same old routine...
THERE IS NO SUCH THING AS A NOBEL PRIZE IN ECONOMICS
There I wrote it again. I hope someone, anyone?, at TE will finally open their eyes, perhaps research the Nobel Prizes (of which there are only five: chemistry, literature, medicine, peace and physics) - even a lowly Google search would do - and realize the truth of the matter.
Heck, I'm not even related to the Nobel family, which is up in arms about the Swedish Treasury stealing their glory, but I am a taxpayer in Sweden and that means that my taxes go to the prize money for the winner of the Swedish National Bank's Prize in Economic Sciences in Memory of Alfred Nobel.
Actual Nobel Prize winners receive their prize money from the Nobel Endowment.
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People AREN'T profit maximization automatons! Why is this news. Adam Smith thoroughly understood the quirks of human behavior and perception in 1776. The mystification of Economic Analysis by stinging out Partial Differential "Equations" and Mathematical Models lead to False Certitudes and just plain nonsense. Pricing puts and calls and more complicated "derivatives" on financial instruments and commodities has to get mathematical and the actors can indeed be accurately ascribed a high degree of rationality and emotional detachment. When you get into buying and selling personal use Soap much less cosmetics, it's NOT the same game.
There really is no reason to detach "Behavioral" Economics from just plain Economics. Pure Rationality models have little practical utility as policy or decision making tools and are vast over simplifications to illustrate basic concepts and little more.
Hopefully this award will tame the blackboard junkies and empower the insightful and imaginative investigators and pragmatists in the Economics Profession.
You need SLEEP, lots of sleep. Good Night!
Could we have that in English please?
Is there any work that follows the history of "nudges" to see what happens when the nudgees decide to disregard the nudgers? It seems to me that there are a number of cases (think prohibition, the war against drugs, and the "obesity epidemic), where people stubbornly refuse to see what is good for them, and we end up with the nudges becoming more like a hammer blow. I can see that nudges can sometimes work, but not all of them do, so we need to understand the limits of this technique, and how to climb back down gracefully from a "nudge project" when it fails.
Fundamental, like getting pi wrong. The coming crash, whenever it comes, will be all the fault of TE, for failing to refer to the Alfred Bernhardt Nobel Memorial Prize in Economics.
Of course didn't mean to be exclusive!
At last, formal recognition of the 'dismal science' for what it is , basically a social science with mathematical tools. Behavioural economics will continue to grow as among other things , finally, we have a tool , or several, to accurately predict decision making processes within given populations. Decisions which hardly ever are perfectly rational ,or for that matter rational at all. Hence, we can now take this into consideration when setting economic policy.
What Thaler says is that people are not always rational. Wow. Such insight. How brilliant. You can trick or brainwash people into making economic decisions you prefer. Ever hear of salesmanship or marketing?
Since Paul Krugman won the Nobel Prize in economics (not to mention Obama’s peace prize), I have come to realize that the Nobel awards have become worthless in highlighting exception work. They are so bizarre, I can’t figure out if they signify anything at all.
It's time to abandon peace prize and give it to the computer people who made this world where we are now. Nobel committee is wasting good money to fund ethnic cleansing like Aung San Suu Kyi or wars like Obama. Time to give the prize to people who made the world better.
I am now interested in the nudge theory, congrats Mr. Thaler. There are probably quite a few amusing applications of the such of theory by practical men across the anglosphere.
We would have to remainder to exercise some caution considering a time frame during which the politicization of context has become to be the modus operandi of the guerillization of the negotiability of circumstantiality.
Particularly, considering whatever can be supposed of hypothesis, to adduce conclusivity to an experimental method considering a supposed negotiable norm, however whatever quality of reasoning is supposed as a-priori.
How thoroughly is the decision maker educated considering their reasonable supposition of the implications of the partisanship in an experiment? How much attribution is made of relevance considering a juxtaposition of investiture?
Rationality and Utility maximization aren't necessarily the same concept across a mean, given the opportunitiy to participate in an experiment, however theorized a-prior, how much of the entire experiment is entirely affirmative of its theoretical bias?
That people will say and do things in controlled circumstances is introductory of the bias to suppose to control behavior in an a-priori context, so, how well do the common folk need to be warned off experimental circumstances as a foyer to conclusivity considering their, or whose, determination?
If Rationality is the exercise of negotiating the 'bigger picture' in the context of an exercise of decision making, again, is it appropriate to advise to affirm a supposition of a norm, prior to tweaking cognizance considering the limit being tested?
How does 'the method' negotiate the measurability of conformance to a susceptible norm being negotiated as delimiting a prior supposition of standard rendered negotiable as a consequence to an a-priori enthusiasm for the introduction of 'circumstantial ethos'?
If the Nobel prize is explained as the podium of the negotiability of a popular theory, how are the implications of that popularity explained as negotiable of a tangent of consequentiality, if, even the determination of the standing committee considering what other variety of theorization, is evidentiary of exploratory abstraction favouring irrationality?
What does our theory do to instill rationality in other words, if, it supposed as being a qualitative basis of sound reasoning?
Or, from a perspective of Utility Maximization, the interviewing experiment isn't particularly interesting, and, ambivalence is greeted, however rationally by the experiment as acquiescence?
So, whose rationality is affirmative, and, whose is pejorative, if as of a supposed 'larger consequence', brevity opposite reams, introduces the defacto of the time frame, that being science exploring moreso what it can 'get away as', rather than, what it ought to be?
Sucsessful market traders understand the irrationality of the markets. it’s all a cycle within a cycle. Wait for the fear trade to dissipate, enter when the green shoots form. Rinse and repeat
Several decades ago, Robert Axelrod’s book, “The Evolution of Cooperation” impressed me.
One of the theses is complainers have a beneficial effect on civilization. A “Hey, don’t litter.” Might earn you an obscene gesture but it will more likely cause the perpetrator to pause before sinning again. Sounds kinda like "nudging"
So ... neoKeynsians are of the Nudge school, and monetarists are the Wink school. Right? Any monetarists out there? Help me out!
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