I am referring to Levine's book: http://levine.sscnet.ucla.edu/general/behavioral/doomed.htm.
I am not well-read on Behavourial Economics. So I am hoping someone who's more well-read can give some input about what he wrote.
Is Behavioral Economics Doomed?
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Old book, lots of nonsense. He basically claims that there's no need for a new theory whenever you can explain something with repeated games and reputation. Then, he does his dual-selves nightclub model as if it weren't behavioral economics.
But how do you dispute his claim? As I am not familiar with the literature, I just want to understand how his arguments are flawed.
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May well be, but BE is basically dead. Hardly any findings are being replicated and what theory there is, is indistinguishable from what you can get by modifying any standard micro model. It's therefore not really clear what challenge BE poses, if it poses any challenge at all, to standard micro.
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May well be, but BE is basically dead. Hardly any findings are being replicated and what theory there is, is indistinguishable from what you can get by modifying any standard micro model. It's therefore not really clear what challenge BE poses, if it poses any challenge at all, to standard micro.
If it's dead then why Berkeley able to mint so many BEs every year with good placements?
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May well be, but BE is basically dead. Hardly any findings are being replicated and what theory there is, is indistinguishable from what you can get by modifying any standard micro model. It's therefore not really clear what challenge BE poses, if it poses any challenge at all, to standard micro.
LOL. there are lots of very well replicated findings. And yes, the idea is to modify standard micro models to explain them.
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May well be, but BE is basically dead. Hardly any findings are being replicated and what theory there is, is indistinguishable from what you can get by modifying any standard micro model. It's therefore not really clear what challenge BE poses, if it poses any challenge at all, to standard micro.
If it's dead then why Berkeley able to mint so many BEs every year with good placements?
There were a total of 7 openings in the last 6 months. From a field that is supposedly revelutionizing economics one would expect more. https://econjobmarket.org/stats.php
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This was a huge year for behavioral. Lots of people on the market, and many did extremely well. It's still rare for a job to be posted explicitly for "behavioral," but that doesn't mean these people aren't getting hired.
May well be, but BE is basically dead. Hardly any findings are being replicated and what theory there is, is indistinguishable from what you can get by modifying any standard micro model. It's therefore not really clear what challenge BE poses, if it poses any challenge at all, to standard micro.
If it's dead then why Berkeley able to mint so many BEs every year with good placements?There were a total of 7 openings in the last 6 months. From a field that is supposedly revelutionizing economics one would expect more. https://econjobmarket.org/stats.php
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From the very outset, he posits a false dichotomy between behavioral and mainstream economics. What's been demonstrated in the past few decades is that the rational agent framework is robust enough to handle all manner of behavioral modifications, from social preferences to bounded rationality. Behavioral economics is dying the same "death" that game theory did: it's getting absorbed into discipline. Go check that list of job openings and CTRL-F for "game theory".
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From the very outset, he posits a false dichotomy between behavioral and mainstream economics. What's been demonstrated in the past few decades is that the rational agent framework is robust enough to handle all manner of behavioral modifications, from social preferences to bounded rationality. Behavioral economics is dying the same "death" that game theory did: it's getting absorbed into discipline. Go check that list of job openings and CTRL-F for "game theory".
You mean behavioural is being embedded into other sub-fields and losing its relevancy as an independent field?
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dunno, diminishing marginal utility seems behavioral/psychological by any definition I can think of. The question becomes which other features are robust enough to economic context that they are worth incorporating where relevant. Something like altruistic punishment as a behavioral mechanism for allowing efficient cooperation in large groups (Fehr 99) is a good example.
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You mean behavioural is being embedded into other sub-fields and losing its relevancy as an independent field?
Why would BE want to be a distinct subfield? If it's a fruitful approach then you should have more specialization, with behavioral labor types applying for labor jobs etc.
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From the very outset, he posits a false dichotomy between behavioral and mainstream economics. What's been demonstrated in the past few decades is that the rational agent framework is robust enough to handle all manner of behavioral modifications, from social preferences to bounded rationality. Behavioral economics is dying the same "death" that game theory did: it's getting absorbed into discipline. Go check that list of job openings and CTRL-F for "game theory".
So what is behavioral then, and don't say that it is a method because we already do empirics. How is it different? What value did it add to the discipline that we say did not already knew from marketing?
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Levine is an excellent game theorist. But this book is trash.
The post above hit it on the nail: behavioral economics is successfully integrating itself into econ. It's not a new method per se, but an expansion in the class and kind of models / motivations considered. In many cases, it's working because it's not about violations of WARP, but expanding beyond restrictive utility functions (e.g. Exponential discounted utility, expected utility, selfish preferences).
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The ironic part is that his work with Fudenberg on the dual-selves nightclub model are all behavioral economic theory papers, just not particularly good ones. For an answer to "but can't you get that with a standard model", see Ran Spiegler's response: