http://www.iset.ge/blog Thu, 17 May 2012 09:49:41 +0000 hourly 1 http://wordpress.org/?v=3.2.1 http://www.iset.ge/blog/?p=577#comment-2936 Zak Thu, 17 May 2012 09:49:41 +0000 http://www.iset.ge/blog/?p=577#comment-2936 Eric, does he demonstrate that? If yes, I should definitely have a look at that book. Eric, does he demonstrate that? If yes, I should definitely have a look at that book.

]]> http://www.iset.ge/blog/?p=577#comment-2863 Eric Mon, 14 May 2012 07:44:23 +0000 http://www.iset.ge/blog/?p=577#comment-2863 Related to 9, I've just bought (and read) a book by Ha-Joon Chang "23 things they don't tell you about capitalism". His #23 is called "good economic policy does not require good economists". He argues that most economic miracles were engineered by lawyers and ... engineers. A quote: "the government will acquire most able economic policymakers by recruiting those who have studied what happens to be the most prestigious subject in the country (which could be law, engineering or even economics, depending on the country), rather than a subject that is notionally most relevant for economic policy-making (that is, economics). Related to 9, I’ve just bought (and read) a book by Ha-Joon Chang “23 things they don’t tell you about capitalism”. His #23 is called “good economic policy does not require good economists”. He argues that most economic miracles were engineered by lawyers and … engineers. A quote: “the government will acquire most able economic policymakers by recruiting those who have studied what happens to be the most prestigious subject in the country (which could be law, engineering or even economics, depending on the country), rather than a subject that is notionally most relevant for economic policy-making (that is, economics).

]]> http://www.iset.ge/blog/?p=577#comment-2856 Giorgi Mon, 14 May 2012 04:16:43 +0000 http://www.iset.ge/blog/?p=577#comment-2856 It's too late for me anyway :)) It’s too late for me anyway :))

]]> http://www.iset.ge/blog/?p=570#comment-2837 Michael Sun, 13 May 2012 07:38:37 +0000 http://www.iset.ge/blog/?p=570#comment-2837 May I remind you that this blog is not an outlet for your personal attacks on ISET faculty or other academics such as David Levine? It should be self-evident, but in case you have missed it there is a comment policy under submission guidelines. There are many ways to voice your disagreement in a polite and professional way. But belittling Eric's blog post here and in the linked facebook discussion, and outright attacking me and Yasya is NOT OK. From my side the discussion with you is over. May I remind you that this blog is not an outlet for your personal attacks on ISET faculty or other academics such as David Levine? It should be self-evident, but in case you have missed it there is a comment policy under submission guidelines. There are many ways to voice your disagreement in a polite and professional way. But belittling Eric’s blog post here and in the linked facebook discussion, and outright attacking me and Yasya is NOT OK. From my side the discussion with you is over.

]]> http://www.iset.ge/blog/?p=577#comment-2828 Zak Sat, 12 May 2012 17:20:11 +0000 http://www.iset.ge/blog/?p=577#comment-2828 Interesting list, as usual! But let me say this, Giorgi: you shouldn't be reading the number 10. Interesting list, as usual! But let me say this, Giorgi: you shouldn’t be reading the number 10.

]]> http://www.iset.ge/blog/?p=570#comment-2825 Muhammad Asali Sat, 12 May 2012 16:25:09 +0000 http://www.iset.ge/blog/?p=570#comment-2825 A very good one Eric! Enjoyed reading. A very good one Eric! Enjoyed reading.

]]> http://www.iset.ge/blog/?p=570#comment-2807 Sanjit Dhami Sat, 12 May 2012 09:25:26 +0000 http://www.iset.ge/blog/?p=570#comment-2807 This is with reference to Michael's description of behavioral economics as a "cult". Just so as to be sure what a "cult" means, here is the definition of a cult from the wikipedia: "The word cult in current popular usage usually refers to a new religious movement or other group whose beliefs or practices are considered abnormal or bizarre.[1] The word originally denoted a system of ritual practices." This is indicative of the problem we face. People demonstrating very little awareness of the problem or the issues, wading into a debate and using extremely loaded and derogatory terms to condemn a whole field. Eric by contrast is doing a great service by clearly articulating his views and discussing topical and for some, controversial matters. And Eric's views contain economic insights. I disagree with most of these views but I do not feel any animosity towards these views (and of course none towards Eric at all, who I consider a friend despite these purely intellectual disagreements). In fact Eric comes across as someone who is sorting these things in his head and thinking hard about them. This is the way to go and others should learn from what he is trying to do. It is good to start from a very skeptical position and this is what Eric is trying to do. Eric's reasoned approach stands in contrast to the posts by some ISET academics. By Yasya's definition in the very first post here, I could not not be a "true scholar", "intellectual" or an "intelligent" person because I do not understand many of the points in the blog "almost instinctively". What follows in the rest of Yasya's post is unintelligible. In particular she does not address a single outstanding issue in economics that is relevant to the behavioral economics/neoclassical economics debate. The last comment also applies to Michael's post. So much talk so little content. This is with reference to Michael’s description of behavioral economics as a “cult”. Just so as to be sure what a “cult” means, here is the definition of a cult from the wikipedia:
“The word cult in current popular usage usually refers to a new religious movement or other group whose beliefs or practices are considered abnormal or bizarre.[1] The word originally denoted a system of ritual practices.”
This is indicative of the problem we face. People demonstrating very little awareness of the problem or the issues, wading into a debate and using extremely loaded and derogatory terms to condemn a whole field.
Eric by contrast is doing a great service by clearly articulating his views and discussing topical and for some, controversial matters. And Eric’s views contain economic insights. I disagree with most of these views but I do not feel any animosity towards these views (and of course none towards Eric at all, who I consider a friend despite these purely intellectual disagreements). In fact Eric comes across as someone who is sorting these things in his head and thinking hard about them. This is the way to go and others should learn from what he is trying to do. It is good to start from a very skeptical position and this is what Eric is trying to do.
Eric’s reasoned approach stands in contrast to the posts by some ISET academics. By Yasya’s definition in the very first post here, I could not not be a “true scholar”, “intellectual” or an “intelligent” person because I do not understand many of the points in the blog “almost instinctively”. What follows in the rest of Yasya’s post is unintelligible. In particular she does not address a single outstanding issue in economics that is relevant to the behavioral economics/neoclassical economics debate. The last comment also applies to Michael’s post. So much talk so little content.

]]> http://www.iset.ge/blog/?p=570#comment-2761 Sanjit Dhami Fri, 11 May 2012 07:55:18 +0000 http://www.iset.ge/blog/?p=570#comment-2761 @Michael: You seem to have a short memory. You used the word "cult" of behavioral economics in your very first email. This is terribly insulting to a subject (and all the people working in it) that argues only on the basis of evidence and discredits other theories only on the basis of evidence, not faith. How much of behavioral economics have you read to pass this judgement? Are you fully aware of the evidence for and against neoclassical/behavioral economics? Have you at least read the behavioral economics books on the ISET shelf? You have gone ahead and recommended a book to the readers. Did you read it first, follow the relevant readings and assess it? Did you offer a single economic insight in any of your two posts? I actually took the trouble to read the relevant sections of the Levine book on something that I could judge very quickly- namely, prospect theory. Prospect theory won a Nobel prize in economics! It has made huge contributions in almost all areas of economics (care to chase up the references if I gave them to you?) Levine's quote about prospect theory is completely incorrect and symptomatic about the rest of the book and its agenda. Yes, the book deserves to be read but not as gospel and should be read in conjunction with other books (none of which you have cared to mention). There was a similar reaction to game theory and to rational expectations (care to read about the history of economics?) as there is to behavioral economics today. In fact the top economists of the day in the 1970's and 1980's (some Nobel prize winners) wrote withering, vicious critiques about these areas. Even if Levine's view were correct it would be a scientifically incorrect position to judge theories based on "impact" rather than the "evidence" as he advocates in the case of prospect theory. I attended a conference recently in which Levine launched an astonishingly vituperative attack on Peter Wakker (incidentally my academic referee) who is on the gentlest and greatest living decision theorists. Peter has just brought out a book on prospect theory (Cambridge University Press) that you could benefit from. Galeleo was jailed for his views- they had little impact then- but Galeleo was correct. My comments on the Levine book are strong- but they were chosen after a careful examination of something I knew well. Yet you describe the book as informed and intelligent- presumably you are able to judge it then or so we should imagine. Right, so you do not feel like being part of a religion yet implicitly presume in your email that behavioral economists wish to be! You talk about selective use of evidence- that is a strong accusation- and you have not cared to back it up. I happen to have been writing a book on the subject for the last 8 years- that is a tremendous amount of investment in learning- even if I have sub-par intelligence. If you have any important insights and concerns about economic issues, then it is worth talking about them- otherwise you should stop wasting your time and mine. Remember behavioral economics is a young discipline- but it is advocating a greater role for the evidence on human behavior- this is a bit like the time when Newton intervened in physics to assign primary role to the evidence. However, there is a very large domain of economics where behavioral economics has not yet been applied and has nothing to say. In these domains we have well developed neoclassical models (international trade, your subject, is a very good example of this). Nobody is advocating getting rid of neoclassical models where there has not been appropriate developments in behavioral models- let the evidence choose which model works. @Michael: You seem to have a short memory. You used the word “cult” of behavioral economics in your very first email. This is terribly insulting to a subject (and all the people working in it) that argues only on the basis of evidence and discredits other theories only on the basis of evidence, not faith. How much of behavioral economics have you read to pass this judgement? Are you fully aware of the evidence for and against neoclassical/behavioral economics? Have you at least read the behavioral economics books on the ISET shelf? You have gone ahead and recommended a book to the readers. Did you read it first, follow the relevant readings and assess it? Did you offer a single economic insight in any of your two posts? I actually took the trouble to read the relevant sections of the Levine book on something that I could judge very quickly- namely, prospect theory. Prospect theory won a Nobel prize in economics! It has made huge contributions in almost all areas of economics (care to chase up the references if I gave them to you?) Levine’s quote about prospect theory is completely incorrect and symptomatic about the rest of the book and its agenda. Yes, the book deserves to be read but not as gospel and should be read in conjunction with other books (none of which you have cared to mention).
There was a similar reaction to game theory and to rational expectations (care to read about the history of economics?) as there is to behavioral economics today. In fact the top economists of the day in the 1970′s and 1980′s (some Nobel prize winners) wrote withering, vicious critiques about these areas.
Even if Levine’s view were correct it would be a scientifically incorrect position to judge theories based on “impact” rather than the “evidence” as he advocates in the case of prospect theory. I attended a conference recently in which Levine launched an astonishingly vituperative attack on Peter Wakker (incidentally my academic referee) who is on the gentlest and greatest living decision theorists. Peter has just brought out a book on prospect theory (Cambridge University Press) that you could benefit from.
Galeleo was jailed for his views- they had little impact then- but Galeleo was correct. My comments on the Levine book are strong- but they were chosen after a careful examination of something I knew well. Yet you describe the book as informed and intelligent- presumably you are able to judge it then or so we should imagine.
Right, so you do not feel like being part of a religion yet implicitly presume in your email that behavioral economists wish to be! You talk about selective use of evidence- that is a strong accusation- and you have not cared to back it up. I happen to have been writing a book on the subject for the last 8 years- that is a tremendous amount of investment in learning- even if I have sub-par intelligence. If you have any important insights and concerns about economic issues, then it is worth talking about them- otherwise you should stop wasting your time and mine.
Remember behavioral economics is a young discipline- but it is advocating a greater role for the evidence on human behavior- this is a bit like the time when Newton intervened in physics to assign primary role to the evidence. However, there is a very large domain of economics where behavioral economics has not yet been applied and has nothing to say. In these domains we have well developed neoclassical models (international trade, your subject, is a very good example of this). Nobody is advocating getting rid of neoclassical models where there has not been appropriate developments in behavioral models- let the evidence choose which model works.

]]> http://www.iset.ge/blog/?p=570#comment-2758 Michael Fri, 11 May 2012 03:08:30 +0000 http://www.iset.ge/blog/?p=570#comment-2758 So shall we burn David Levine's (e)book at the stake? It's not contributing to the discussion to so viciously attack a contrarian viewpoint, in particular given David Levine's many good points. One might not necessarily agree with all what he says, but that is what academic discourse and studying economics is about. Read and listen to stuff, and form your own opinion. In this case, read - with a critical mind - KT and Levine. It's sad that you frame this is a debate between the truth, and "biased, unbalanced, misleading and ill judged attacks" on the other side. So shall we burn David Levine’s (e)book at the stake? It’s not contributing to the discussion to so viciously attack a contrarian viewpoint, in particular given David Levine’s many good points. One might not necessarily agree with all what he says, but that is what academic discourse and studying economics is about. Read and listen to stuff, and form your own opinion. In this case, read – with a critical mind – KT and Levine. It’s sad that you frame this is a debate between the truth, and “biased, unbalanced, misleading and ill judged attacks” on the other side.

]]> http://www.iset.ge/blog/?p=570#comment-2757 Sanjit Dhami Thu, 10 May 2012 21:36:44 +0000 http://www.iset.ge/blog/?p=570#comment-2757 The David Levine book is one of the most biased, unbalanced, misleading and ill judged attacks on behavioral economics. It is not a book for the intelligent + informed reader who will quickly be able to demolish it's arguments. On prospect theory, for instance, Levine writes: "This theory has had no impact on economics whatsoever but has become the goldstandard for psychologists." This is utterly false. Prospect theory has had a big impact in many areas in economics. The graduate micro courses at the top schools already acknowledge prospect theory now, quite positively (although inadequately), on the decision theory parts. I have just seen the Stanford lecture notes on this. Loads of neoclassical economists are writing very strongly against behavioral economics at the moment. Their life's work is threatened. It is somewhat disheartening when faculty start quoting the words of one great economist against another or against another school. This is a particularly easy and convenient exercise if one has access to the internet. I urge you to go and read the evidence for yourself. ISET has a shelf on behavioral economics in the library- and it contains one of the finest edited books written in economics "Choices Values and Frames" by Kahneman and Tversky. But there are also other great books on that shelf. Read and judge it for yourself. The David Levine book is one of the most biased, unbalanced, misleading and ill judged attacks on behavioral economics. It is not a book for the intelligent + informed reader who will quickly be able to demolish it’s arguments.
On prospect theory, for instance, Levine writes: “This theory has had no impact on economics whatsoever but has become the goldstandard for psychologists.” This is utterly false. Prospect theory has had a big impact in many areas in economics. The graduate micro courses at the top schools already acknowledge prospect theory now, quite positively (although inadequately), on the decision theory parts. I have just seen the Stanford lecture notes on this.
Loads of neoclassical economists are writing very strongly against behavioral economics at the moment. Their life’s work is threatened. It is somewhat disheartening when faculty start quoting the words of one great economist against another or against another school. This is a particularly easy and convenient exercise if one has access to the internet. I urge you to go and read the evidence for yourself. ISET has a shelf on behavioral economics in the library- and it contains one of the finest edited books written in economics “Choices Values and Frames” by Kahneman and Tversky. But there are also other great books on that shelf. Read and judge it for yourself.

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