Tuesday, March 04, 2014

Becoming a behaviorialist

Becoming a behaviorialist (i.e., overcoming autism in economics ;-). Audio interview.
Leading behavioral economist Richard Thaler, the Ralph and Dorothy Keller Distinguished Service Professor of Behavioral Science and Economics, talks about how he found his way into this then-nonexistent field and how he came to study irrational economic behavior at UChicago, the home of efficient markets and rational expectations.
Lots of other good interviews in this Chicago series (iTunes): Heckman, Sargent on the euro, Hansen on risk.


chartreuse1737 said...

so after thinking about it for a really long time as i was a professor of ecclesiastical history at cambridge i finally decided on the greek orthodox church, blah, blah, blah WHY SHOULD ANYONE CARE.

economics = ideology = pseudoscience for future "world controllers" where they can prove their ideological purity.

''The first thing we do, let's kill all the lawyers." but in shak's day there were no economists.

Cornelius said...

Even if we neglect all the marketing that happened before the birth of the modern discipline of marketing in the early 20th century, the economists - and really the psychologists that started this - are several decades late to the game.

The models that marketers use to sell you crap you don't need all take into account emotional and rational variables. They are also quick to point out the difference between the actual characteristics of a product and consumer perceptions of those characteristics. Often, advertising is used to move perceptions away from reality and towards a set of perceptions that marketers have deduced as optimal for sales.

Economists in their arrogance never bothered to walk down to the business schools to figure out what other people were doing. It took the invasion of psychologists into economics to start changing dogma.

Endre Bakken Stovner said...

These were my two first introductions to the topic: http://www.ted.com/talks/rory_sutherland_sweat_the_small_stuff and http://www.ted.com/talks/rory_sutherland_life_lessons_from_an_ad_man

A marketer gives short, entertaining and example driven introductions to behavioral economics.

chartreuse1737 said...

and so, competition can actually INCREASE prices. this IS the case with prescription drugs where twice as much is spent selling them as discovering them. if they spent less their drug for X wouldn't sell like the other companies'. and they have to recoup their selling expense with higher prices.

is it any wonder that only one scientist has ever led a big pharma company, that pfizer's ceo is former lead counsel to mcdonald's, and that their share prices have tanked because their pipelines are dry.

one very simple solution. it used to be (is it still?0 that compensation above 1m per year was not expense-able. so why not sales, marketing, advertising expense above a certain fraction of revenues is non-expense-able?

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