Advanced Search
MyIDEAS: Login

A Probabilistic Ghost in the Experimental Machine

Contents:

Author Info

  • Dorian Jullien
  • Nicolas Vallois

Abstract

This paper focuses on the opposition between two contemporary research programs in economics, Behavioral Economics (BE) and Experimental Market Economics (EME). Our claim is that the arguments of this opposition can be clarified through the lenses of another opposition in probability theory, between Bayesianism and frequentism. We show how this probabilistic opposition has indirectly shaped a controversy in psychology that did oppose two research programs – Heuristics and Biases and Ecological Rationality – who happen to have played a role for the respective foundations of individual rationality in BE and EME. To underline this whole process we investigate the 1996 controversy between Kahneman, Tversky and Gigerenzer. Those psychologists held different views on how probabilistic representations influence the context dependency of rationality; this provides us a rational to highlights that a probabilistic ghost is haunting the experimental machine in economics, thus explaining how and why the oppositions between BE and EME are structured around the interplay between norms (of rationality) and context (in which rationality is exercised).

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2012-05.pdf
File Function: First version, 2012
Download Restriction: no

Bibliographic Info

Paper provided by Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis in its series GREDEG Working Papers with number 2012-05.

as in new window
Length: 29 pages
Date of creation: Jan 2012
Date of revision:
Publication status: Forthcoming in Journal of Economic Methodology
Handle: RePEc:gre:wpaper:2012-05

Contact details of provider:
Postal: 250, rue Albert Einstein, 06560 Valbonne
Phone: +33-493-954-172
Fax: +33-493-653-798
Web page: http://www.gredeg.cnrs.fr
More information through EDIRC

Related research

Keywords: experimental economics; behavioral economics; probability theory; psychology; rationality;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Rabin, Matthew, 2002. "A perspective on psychology and economics," European Economic Review, Elsevier, vol. 46(4-5), pages 657-685, May.
  2. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
  3. Chris Starmer, 1999. "Experiments in economics: should we trust the dismal scientists in white coats?," Journal of Economic Methodology, Taylor & Francis Journals, vol. 6(1), pages 1-30.
  4. Siakantaris, Nikos, 2000. "Experimental Economics under the Microscope," Cambridge Journal of Economics, Oxford University Press, vol. 24(3), pages 267-81, May.
  5. Samuel Ferey, 2011. "Paternalisme libéral et pluralité du moi," Revue économique, Presses de Sciences-Po, vol. 62(4), pages 737-750.
  6. Ross, Don & Sharp, Carla & Vuchinich, Rudy E. & Spurrett, David, . "Midbrain Mutiny: The Picoeconomics and Neuroeconomics of Disordered Gambling: Economic Theory and Cognitive Science," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262517582, December.
  7. Guala,Francesco, 2005. "The Methodology of Experimental Economics," Cambridge Books, Cambridge University Press, number 9780521618618, October.
  8. Colin Camerer, 1998. "Bounded Rationality in Individual Decision Making," Experimental Economics, Springer, vol. 1(2), pages 163-183, September.
  9. Loewenstein, George, 1999. "Experimental Economics from the Vantage-Point of Behavioural Economics," Economic Journal, Royal Economic Society, vol. 109(453), pages F23-34, February.
  10. Richard H. Thaler & Shlomo Benartzi, 2004. "Save More Tomorrow (TM): Using Behavioral Economics to Increase Employee Saving," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages S164-S187, February.
  11. Richard H. Thaler, 2000. "From Homo Economicus to Homo Sapiens," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 133-141, Winter.
  12. Vernon L. Smith, 1962. "An Experimental Study of Competitive Market Behavior," Journal of Political Economy, University of Chicago Press, vol. 70, pages 322.
  13. Esther-Mirjam Sent, 2004. "Behavioral Economics: How Psychology Made Its (Limited) Way Back Into Economics," History of Political Economy, Duke University Press, vol. 36(4), pages 735-760, Winter.
  14. Richard Thaler & Shlomo Benartzi, 2004. "Save more tomorrow: Using behavioral economics to increase employee saving," Natural Field Experiments 00337, The Field Experiments Website.
  15. Hausman,Daniel M., 2012. "Preference, Value, Choice, and Welfare," Cambridge Books, Cambridge University Press, number 9781107015432, October.
  16. Starmer, Chris, 1999. "Experimental Economics: Hard Science or Wasteful Tinkering?," Economic Journal, Royal Economic Society, vol. 109(453), pages F5-15, February.
  17. Ted O'Donoghue & Matthew Rabin, 2003. "Studying Optimal Paternalism, Illustrated by a Model of Sin Taxes," American Economic Review, American Economic Association, vol. 93(2), pages 186-191, May.
  18. John B. Davis, 2008. "The turn in recent economics and return of orthodoxy," Cambridge Journal of Economics, Oxford University Press, vol. 32(3), pages 349-366, May.
  19. Berg, Nathan & Gigerenzer, Gerd, 2010. "As-if behavioral economics: Neoclassical economics in disguise?," MPRA Paper 26586, University Library of Munich, Germany.
  20. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, 03.
  21. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
  22. Ted O'Donoghue & Matthew Rabin, 2005. "Optimal Sin Taxes," Levine's Bibliography 784828000000000346, UCLA Department of Economics.
  23. Cass R. Sunstein & Richard H. Thaler, 2003. "Libertarian paternalism is not an oxymoron," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 48(Jun).
  24. Richard H. Thaler & Cass R. Sunstein, 2003. "Libertarian Paternalism," American Economic Review, American Economic Association, vol. 93(2), pages 175-179, May.
  25. Floris Heukelom, 2011. "What to Conclude from Psychological Experiments: The Contrasting Cases of Experimental and Behavioral Economics," History of Political Economy, Duke University Press, vol. 43(4), pages 649-681, Winter.
  26. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
  27. Giocoli, Nicola, 2011. "From Wald to Savage: homo economicus becomes a Bayesian statistician," MPRA Paper 34117, University Library of Munich, Germany.
  28. Ana C. Santos, 2011. "Behavioural and experimental economics: are they really transforming economics?," Cambridge Journal of Economics, Oxford University Press, vol. 35(4), pages 705-728.
  29. Vallois, Nicolas, 2011. "The Pathological Paradigm of Neuroeconomics," OEconomia, Editions NecPlus, vol. 2011(04), pages 525-556, December.
  30. Timo Tammi, 1999. "Incentives and preference reversals: escape moves and community decisions in experimental economics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 6(3), pages 351-380.
  31. Richard J. Herrnstein & Drazen Prelec, 1991. "Melioration: A Theory of Distributed Choice," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 137-156, Summer.
  32. Davis,John B., 2010. "Individuals and Identity in Economics," Cambridge Books, Cambridge University Press, number 9780521173537, October.
  33. Tversky, Amos & Thaler, Richard H, 1990. "Anomalies: Preference Reversals," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 201-11, Spring.
  34. Ana Santos, 2009. "Behavioral experiments: how and what can we learn about human behavior," Journal of Economic Methodology, Taylor & Francis Journals, vol. 16(1), pages 71-88.
  35. Hausman,Daniel M., 2012. "Preference, Value, Choice, and Welfare," Cambridge Books, Cambridge University Press, number 9781107695122, October.
  36. Guala, Francesco, 2000. "Artefacts in experimental economics: preference reversals and the Becker Marschak mechanism," Economics and Philosophy, Cambridge University Press, vol. 16(01), pages 47-75, April.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Dorian Jullien, 2013. "Asian Disease-type of Framing of Outcomes as an Historical Curiosity," GREDEG Working Papers 2013-47, Groupe de REcherche en Droit, Économie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:gre:wpaper:2012-05. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Patrice Bougette).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.