Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Prize in Economic Sciences 2017

nobelprize.org

Post reply on HN
Print view View original

31–40 of 82 posts

Re: The Prize in Economic Sciences 2017

#31

Post by olympus »

KingMob wrote: post #21

While I love the behavioral economists (esp. Kahnemann and Tversky), a lot of psychologists have told economists for a long time that assuming basic rationality as a starting point was a fundamental error in the field. Taking it as an axiom has led to all sorts of misguided efforts and wasted time. From the article: "That's the point: It's obvious to anyone who pays any attention at all to himself or his fellow human…

Assuming rational actors simplifies theory to make it within reach of undergraduate students, so it is useful to get people started in the field. Lots of things are explained by rational choice, such as the actions of many corporations (that have research analysts collecting and refining data to make better decisions).

I think a lot of irrational actions taken by humans is better explained by them having incomplete information. The contrived nature of these experiments occludes their structure to the participants. Using the viral disease/antidote example: If you presented each scenario to the students at the same time and then explained how they reduced to the exact same decision, then many students (but probably not all) would assign the same price to each scenario.

Instead what these experiments do is say "make a decision," then they say "make a decision on this new complicated phrasing which makes you think that the situation has changed but only I realize that it is actually the same." No surprise there when the outcome is different.

Re: The Prize in Economic Sciences 2017

#32

Post by pcarolan »

KingMob wrote: post #21

While I love the behavioral economists (esp. Kahnemann and Tversky), a lot of psychologists have told economists for a long time that assuming basic rationality as a starting point was a fundamental error in the field. Taking it as an axiom has led to all sorts of misguided efforts and wasted time. From the article: "That's the point: It's obvious to anyone who pays any attention at all to himself or his fellow human…

Physicists assume things are spheres and use that to solve a bunch of problems. It's important to know 'why' economists use this abstraction for modeling before patently dismissing it. Economists notice that on average, people in the aggregate tend to behave rationally sometimes. Scrutiny should be applied to the assumptions, but it can still help explain economic systems.

Re: The Prize in Economic Sciences 2017

#33

Post by matt4077 »

indescions_2017 wrote: post #6

Excellent pick! Applied "nudge theory," or "libertarian paternalism," is proving to be the panacea for massive social change. From NYC's decision to offer free lunches for all public school students. To the design of recycle bins in Amsterdam. Simple yet intuitive communication of the optimality of rational choosing, without penalizing too harshly our irrational tendencies. I think the next logical extension of neuro…

> Watching leaders actions as the result of irrational biases operating with imperfect information is proving a closer model of reality.

At that level, one usually expects the actors to conform to the "rational actor" model, and in modern history, they actually do so, by and large. Kim-Jong Il and his father, for example, have been doing this for decades. And their continued survival is a testament to their skill.

It's only Trump who acts like the political equivalent of a compass that always points south. And even he is no enigma if you just picture him as the protagonist of a really campy western from the 50s.

Re: The Prize in Economic Sciences 2017

#34

Post by chrisseaton »

bambax wrote: post #18

An irrational thing Amazon knows and many, many other online sellers don't: people don't want to pay for delivery. That is, they'd much rather pay $20 total with free delivery, than, for example, $15 for the goods + $3 for delivery. It's amazing the number of non-Amazon online shops who still don't seem to know this.

That's not irrational - it's saving time, effort, and grief having to think about how much delivery will cost.

Re: The Prize in Economic Sciences 2017

#35

Post by matt4077 »

KingMob wrote: post #21

While I love the behavioral economists (esp. Kahnemann and Tversky), a lot of psychologists have told economists for a long time that assuming basic rationality as a starting point was a fundamental error in the field. Taking it as an axiom has led to all sorts of misguided efforts and wasted time. From the article: "That's the point: It's obvious to anyone who pays any attention at all to himself or his fellow human…

It's really not like economists don't know these things. Kahnemann got his Nobel a long time ago, after all. They also didn't grow tired to mention the flaws in the model when I learned them as an undergrad 10+ years ago.

It's like people insisting physicists are ignoring wind resistance with their laws of motion. They know!

Re: The Prize in Economic Sciences 2017

#36

Post by ekianjo »

KingMob wrote: post #21

While I love the behavioral economists (esp. Kahnemann and Tversky), a lot of psychologists have told economists for a long time that assuming basic rationality as a starting point was a fundamental error in the field. Taking it as an axiom has led to all sorts of misguided efforts and wasted time. From the article: "That's the point: It's obvious to anyone who pays any attention at all to himself or his fellow human…

Because you don't need to go to the individual level to explain the behavior of crowds. That's like saying "hey, you don't know how quarks actually work in an atom, so how can you claim to understand physics at the macroscopic level?". That kind of argument does not hold very well.

Re: The Prize in Economic Sciences 2017

#37

Post by ekianjo »

bambax wrote: post #18

An irrational thing Amazon knows and many, many other online sellers don't: people don't want to pay for delivery. That is, they'd much rather pay $20 total with free delivery, than, for example, $15 for the goods + $3 for delivery. It's amazing the number of non-Amazon online shops who still don't seem to know this.

> $15 for the goods + $3 for delivery.

It's more simple than that: most people, me included, hate to see the price change just before you press the ordering button, just because shipping fees were not included. What Amazon does well is that it tells you exactly how much you will be billed from the get go (even when you have to pay for shipping, it's not hidden.)

Re: The Prize in Economic Sciences 2017

#38

Post by TomorrowMars »

Economic Sciences deserve to take over the whole Nobel prize. They should get all the prizes. They have proven themselves as the ultimate woodo wizards of "applied" scientists.

If you go to source page, you will see that the full name of the prize is "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel"

Why? There is no Nobel prize for economics.

This was a self-congratulatory add-on instituted by bankers in an attempt to add respectability to the turbulent industry of studying abstract virtual value that is not just affected, but created by the observer. Let me repeat myself. There is no Nobel prize for economics.

The fact that the majority of people here, and worldwide, fail to notice that, is the only proof needed that economics is the ultimate science of them all.

And the sweet little Swedes had to bail out their bankers after the US fiasco. At least the bankers spend some of that taxpayer money to keep the "prize" going.

Re: The Prize in Economic Sciences 2017

#39

Post by FabHK »

VHRanger wrote: post #11
amrrs wrote: post #3

Considering the fact that Richard Thaler made a cameo in The Big Short Movie that was primarily demeaning Wall Street Banks and Economists who played along in the crisis, itself makes him an Economist who stands out. http://www.chicagobusiness.com/article/20160226/NEWS01/16022...

I mean that doesn't really make him stand out; most economists will agree with the Big Short's account of the crisis. Except perhaps the coffee shop discussion at the end where Steve Carrell states banks did it because they expected to get bailed out (all evidence points that they didn't expect to get bailed out a priori and that they simply did it because shareholders and managers are greedy short sighted morons). T…

Well, bankers did have an incentive to make bigger bets though, because on the upside they'd win more, and on the downside, well, who cares, the bank might go bust or be bailed out - it doesn't really matter, the downside (for the managers) is floored. Nobody has gone to jail, right. And then, to the extent that their assumption was that the payment system and economy does not collapse, it was predicated on a public bail out.

Anat Admati, Stanford econ prof, has a popular book out, The Bankers' New Clothes that makes a case for much simpler and stricter bank regulation (basically, force them to hold much more capital (i.e. equity)), which makes a lot of sense to me.

Re: The Prize in Economic Sciences 2017

#40

Post by titzer »

peterwwillis wrote: post #12

I don't understand why this field exists. They take observations of human behavior that have been common sense since... well, since humans have used money, and then try to wrap it in some sort of "scientific process" to prove these things empirically as if they weren't already obvious. Is it because economic theorists before had such stupid ideas and now they have to disprove every old unrealistic theory step by step…

> They take observations of human behavior that have been common sense since... well, since humans have used money, and then try to wrap it in some sort of "scientific process" to prove these things empirically as if they weren't already obvious.

Welcome to Science, dude. Its bread and butter, repeatable experimentation, is the proving ground on which common sense is either quantified or rejected. This is how we climb out of the muck of our stupid prejudices.

Post reply on HN