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A Probabilistic Ghost in the Experimental Machine

  • Dorian Jullien

    (University of Nice Sophia Antipolis, France
    GREDEG CNRS)

  • Nicolas Vallois

    (University of Paris 1 Panthéon Sorbonne, France
    CES)

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 lens of another opposition in the philosophy of probability and in probability theory, between Bayesianism and frequentism. We show how this probabilistic opposition has indirectly shaped a controversy in psychology that opposes two research programs - Heuristics and Biases and Ecological Rationality - which play respective roles in the foundations of individual rationality in BE and EME. To understand these theoretical interrelationships, 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 a rationale to suggest that a probabilistic ghost may be haunting the experimental machine in economics, and explains how and why the oppositions between BE and EME are structured around the interplay between the norms of rationality and the context in which rationality is exercised.

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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.

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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
Note: The paper has been removed at the request of the Editor of the Journal of Economic Methodology.
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