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Attempts to express certain views about the relationship that Robbinsadvocates between economics and psychology. Develops two mainconclusions: first, Robbins maintains…
Attempts to express certain views about the relationship that Robbins advocates between economics and psychology. Develops two main conclusions: first, Robbins maintains that economic theories are independent of psychological theories, even in those cases in which the economist has tried to present his economic conclusions as grounded on specific psychological theories. This procedure, however, is greatly misleading and can damage the autonomy of economics, making it dependent on the particular theories that are provided to explain human behaviour. At the same time, Robbins defends the view that economics should not be entirely deprived of certain references to psychological or subjective notions. A positivistic attitude as the one that tries to avoid this sort of concept can be the result of a behaviouristic approach to economic science, distrusted by the British economist. It can also be fostered by an empiricist and monistic view of economics, according to which only observable data can be employed as the starting point for the true development of science. His own position in methodology, more oriented towards scientific dualism and a deductivistic procedure as the main tool to elaborate theories, prevents him from considering valid only those conclusions grounded in empirical support.
After a long hiatus, psychology and economics today are back in conversation with each other: active research programs in behavioral economics, neuro-economics, and the…
After a long hiatus, psychology and economics today are back in conversation with each other: active research programs in behavioral economics, neuro-economics, and the economics of happiness bespeak a thriving cross-disciplinary discussion. Yet for most of the twentieth century, economists distanced themselves from psychology; when they spoke of science, they referred, in the first instance, to the physical sciences, then perhaps to the biological sciences. A hundred years ago, however, American intellectuals viewed psychology as a progressive science and economics as traditionalist – mired in the antiquated notions of laissez-faire and individualism. A social science that assumed individuals knew their preferences, directed their actions toward fulfilling them in a rational manner, and in the process engaged others in dispassionate exchange, was clearly not speaking to the issues of the modern world. The death of progressivism in the wake of WW I only reinforced the rise of psychology: good intentions weren’t enough, motives were suspect, rational individuals went mad in the midst of conflict and turmoil, complex emotions ruled. Careful psychological analysis could, however, enable society to gain some degree of control over the fundamental irrationality of human action.
The modern revival of “Austrian economics” dates to the South Royalton conference of 1974 (Vaughn, 1994, pp. 103–111). At that time, neoclassical orthodoxy excluded evolutionary concepts. It was, in Ludwig Lachmann’s memorable phrase, “late classical formalism” (1977, p. 35). Opposition to neoclassical orthodoxy was part of the definition of Austrian economics. It formed part of our identity. Today it is no longer clear what “orthodoxy” is or whether current mainstream economics is “neoclassical” at all (Colander et al., 2004). One of the more salient changes in mainstream economics over the last 30 years is the introduction of evolutionary ideas. Mainstream economics is rich with evolutionary concepts. Evolutionary game theory, for example, is certainly a part of today’s standard toolbox. Thirty years ago, it did not even exist.1 Some of the evolutionary ideas entering mainstream economics are similar or identical to ideas from the Austrian tradition. In this situation, it is no longer clear what the Austrian differentiae are. I hope this volume will help to sort out some of the issues relating to Austrian economics and one group of evolutionary ideas, namely, those of evolutionary psychology.
George Loewenstein, a prominent behavioral economist, recalls thatIn 1994, when Thaler, Camerer, Rabin, Prelec and I spent the year at the Center for Advanced Study in the…
George Loewenstein, a prominent behavioral economist, recalls thatIn 1994, when Thaler, Camerer, Rabin, Prelec and I spent the year at the Center for Advanced Study in the Behavioral Sciences, we had a meeting to make a kind of final decision about what to call what we were doing. Remarkably, at that time, the name behavioral economics was not yet well established. I actually advocated “psychological economics,” and Thaler was strong on behavioral economics. I'm kind of glad that he prevailed; I think it's a better, catchier, label, although it creates confusion due to association with Behaviorism. (G. Loewenstein, personal email to author, June 16, 2008)
The methodological individualism and subjectivism of the Austrian tradition in economics is often associated with a methodological dualism, i.e. the claim that the nature…
The methodological individualism and subjectivism of the Austrian tradition in economics is often associated with a methodological dualism, i.e. the claim that the nature of its subject matter, namely purposeful and intentional human action, requires economics to adopt a methodology that is fundamentally different from the causal explanatory approach of the natural sciences. This paper critically examines this claim and advocates an alternative, explicitly naturalistic and empiricist outlook at human action, exemplified, in particular, by the research program of evolutionary psychology. It is argued that, within the Austrian tradition, a decidedly naturalistic approach to subjectivism can be found in F. A. Hayek’s work.
This chapter conducts a systematic comparison of behavioral economics’s challenges to the standard accounts of economic behaviors within three dimensions: under risk, over…
This chapter conducts a systematic comparison of behavioral economics’s challenges to the standard accounts of economic behaviors within three dimensions: under risk, over time, and regarding other people. A new perspective on two underlying methodological issues, i.e., inter-disciplinarity and the positive/normative distinction, is proposed by following the entanglement thesis of Hilary Putnam, Vivian Walsh, and Amartya Sen. This thesis holds that facts, values, and conventions have inter-dependent meanings in science which can be understood by scrutinizing formal and ordinary language uses. The goal is to provide a broad and self-contained picture of how behavioral economics is changing the mainstream of economics.
This paper surveys the contribution of economics and industrial relations (E/IR) to the development of the field of personnel/human resource management (P/HRM). A brief…
This paper surveys the contribution of economics and industrial relations (E/IR) to the development of the field of personnel/human resource management (P/HRM). A brief review of existing accounts of the evolution of the field reveals that they give little mention to the role of E/IR. A re‐examination of the early years of P/HRM suggests, however, that this is a serious omission. It is demonstrated, for example, that E/IR was in fact the principal disciplinary base for research and teaching in P/HRM in US universities into the 1940s and that for the first two decades of the field’s existence the most influential and authoritative academic‐based writers came from the ranks of economists and economics‐trained IR scholars. After describing the reasons for this close relationship, The centrifugal forces that caused a gradual split between E/IR and P/HRM are described. This split had roots in the 1920s, became increasingly visible in the 1950s and beyond, and by the late 1980s had reached a point where the two subject areas had little intellectual or organizational interaction. The paper ends with a brief review of recent developments that herald a modest rapprochement between E/IR and P/HRM.
The cognitive sciences, having emerged in the second half of the twentieth century, are recently experiencing a spectacular renewal, which cannot leave unaffected any…
The cognitive sciences, having emerged in the second half of the twentieth century, are recently experiencing a spectacular renewal, which cannot leave unaffected any discipline that deals with human behavior. The primary motivation for our project has been to weigh up the impact that this ongoing revolution of the sciences of the mind is likely to have on social sciences – in particular, on economics. The idea was to gather together a diverse group of social scientists to think about the following questions. Have the various new approaches to cognition provoked a crisis in economic science?1 Should we speak of a scientific revolution (in the sense of Kuhn) also in contemporary social sciences, occurring under the growing influence of the cognitive paradigm? Above all, can a more precise knowledge of the complex functioning of the human mind and brain advance in any way the understanding of economic decision-making?
This essay is a review of the recent literature on the methodology of economics, with a focus on three broad trends that have defined the core lines of research within the…
This essay is a review of the recent literature on the methodology of economics, with a focus on three broad trends that have defined the core lines of research within the discipline during the last two decades. These trends are: (a) the philosophical analysis of economic modelling and economic explanation; (b) the epistemology of causal inference, evidence diversity and evidence-based policy and (c) the investigation of the methodological underpinnings and public policy implications of behavioural economics. The final output is inevitably not exhaustive, yet it aims at offering a fair taste of some of the most representative questions in the field on which many philosophers, methodologists and social scientists have recently been placing a great deal of intellectual effort. The topics and references compiled in this review should serve at least as safe introductions to some of the central research questions in the philosophy and methodology of economics.
Nobody concerned with political economy can neglect the history of economic doctrines. Structural changes in the economy and society influence economic thinking and…
Nobody concerned with political economy can neglect the history of economic doctrines. Structural changes in the economy and society influence economic thinking and, conversely, innovative thought structures and attitudes have almost always forced economic institutions and modes of behaviour to adjust. We learn from the history of economic doctrines how a particular theory emerged and whether, and in which environment, it could take root. We can see how a school evolves out of a common methodological perception and similar techniques of analysis, and how it has to establish itself. The interaction between unresolved problems on the one hand, and the search for better solutions or explanations on the other, leads to a change in paradigma and to the formation of new lines of reasoning. As long as the real world is subject to progress and change scientific search for explanation must out of necessity continue.