Which school of economic thought do you prefer?

[Gustaf]

I think Ag summed up everything I would have wanted to say plus more that I didn't know. So, yeah.

I think modern economics on the whole is sufficiently scientific for the whole concept of schools to be a bit superfluous. I mean, you wouldn't refer to differences within the medical or physicist community as "schools of thought" the way you do in history or sociology. Or at least that is my uneducated impression.

There are points of contention and some of them are linked to politics, but that's really it.

[Gustaf]

Human behavior cannot be predicted by empirical observation.

If that were the case, then opebo would have been absolutely right in his view of economics As somebody who's actually run lab experiments, I can assure you that human behavior is highly predictable )) There are extremely strong empirical regularities, replicated from lab to lab all over the world, believe it or not ))))))

Sounds like bollocks to me. Evidence?

I'd refer you to any amount of published experimental work. But let me tell you about some first-hand experience.

I recall when I started running pilots for a certain auctions experiment before reading up on the relevant literature (auctions isn't really my field, this was my first foray into them). I discovered what to me seemed like an incredible behavior (people were bidding above value in circumstances where I wouldn't think it reasonable at all). To my surprise, when I actually did read about what others have done, it turned out to be something well-known for over 15 years: in this whole class of auctions people were known to overbid. My bid scatterplots were indistinguishable from what has long been published (literally: if the same software were to be used to produce the graphs, I wouldn't be able to tell which is which by eyeballing). Now, given my previous ignorance, there is no way I could, consciously or unconsciously, make my results conform to what others (many others) have been observing. This, by the way, was the first experimental run of this class of auctions in a Latin American lab, the experimental instructions were produced independently of anybody else, etc., etc., etc.  Oh, yeah - human behavior is predictable. Very predictable.

Auctions - with their regularized practices and rules - hardly strike me as a good place to study 'human behaviour' (Oh, and what were the demographics of the people you were studying). Though in saying that I desire details - what were reasons for this overbidding - circumstances?

To make the long story short, overbidding, defined as bidding above the resale value of the object with no sentimental value (e.g., for a dollar bill), occurs nearly always when subjects participate in sealed-bid second-price auctions (and their analogs). It does not occur either in first-price auctions nor in the ascending-bid English auctions. The result is extremely robust . My subjects have been first-year undergraduates, but others have done it in different pools (though, I am sure, if I were to run it among the Natives in a jungle, it would change - that would be a job for an anthropologist, not for an economist). I've almost literally been selling 5 dollar bills for 5 dollars and a quarter, on average (though, having tried various things I also know what to do to "teach" people to stop doing it). I have a theory why that happens, but the issue is, actually, a subject of debate among the researchers.

If you don't like auctions, I've run voting experiments, I've run bargaining experiments - you want first-hand accounts from those? I nearly always run, as a control, and experiment others had run in a different lab. Whenever there's been substantial body of evidence accumulated on such experiments, I tend to get results that are fairly similar to others. Admittedly, lab experiments are a structured environment by definition - like, say, physics lab experiments, where they take pains to eliminate effects that would confound their observation, even though those effects are present in real life. I don't see what's the difference here.

So therefore not 'human behaviour' then. Glad we cleared that up.

Human behaviour that isn't natives in a jungle isn't human behaviour?

[Gustaf]

Human behavior cannot be predicted by empirical observation.

If that were the case, then opebo would have been absolutely right in his view of economics As somebody who's actually run lab experiments, I can assure you that human behavior is highly predictable )) There are extremely strong empirical regularities, replicated from lab to lab all over the world, believe it or not ))))))

Sounds like bollocks to me. Evidence?

I'd refer you to any amount of published experimental work. But let me tell you about some first-hand experience.

I recall when I started running pilots for a certain auctions experiment before reading up on the relevant literature (auctions isn't really my field, this was my first foray into them). I discovered what to me seemed like an incredible behavior (people were bidding above value in circumstances where I wouldn't think it reasonable at all). To my surprise, when I actually did read about what others have done, it turned out to be something well-known for over 15 years: in this whole class of auctions people were known to overbid. My bid scatterplots were indistinguishable from what has long been published (literally: if the same software were to be used to produce the graphs, I wouldn't be able to tell which is which by eyeballing). Now, given my previous ignorance, there is no way I could, consciously or unconsciously, make my results conform to what others (many others) have been observing. This, by the way, was the first experimental run of this class of auctions in a Latin American lab, the experimental instructions were produced independently of anybody else, etc., etc., etc.  Oh, yeah - human behavior is predictable. Very predictable.

Auctions - with their regularized practices and rules - hardly strike me as a good place to study 'human behaviour' (Oh, and what were the demographics of the people you were studying). Though in saying that I desire details - what were reasons for this overbidding - circumstances?

To make the long story short, overbidding, defined as bidding above the resale value of the object with no sentimental value (e.g., for a dollar bill), occurs nearly always when subjects participate in sealed-bid second-price auctions (and their analogs). It does not occur either in first-price auctions nor in the ascending-bid English auctions. The result is extremely robust . My subjects have been first-year undergraduates, but others have done it in different pools (though, I am sure, if I were to run it among the Natives in a jungle, it would change - that would be a job for an anthropologist, not for an economist). I've almost literally been selling 5 dollar bills for 5 dollars and a quarter, on average (though, having tried various things I also know what to do to "teach" people to stop doing it). I have a theory why that happens, but the issue is, actually, a subject of debate among the researchers.

If you don't like auctions, I've run voting experiments, I've run bargaining experiments - you want first-hand accounts from those? I nearly always run, as a control, and experiment others had run in a different lab. Whenever there's been substantial body of evidence accumulated on such experiments, I tend to get results that are fairly similar to others. Admittedly, lab experiments are a structured environment by definition - like, say, physics lab experiments, where they take pains to eliminate effects that would confound their observation, even though those effects are present in real life. I don't see what's the difference here.

So therefore not 'human behaviour' then. Glad we cleared that up.

Human behaviour that isn't natives in a jungle isn't human behaviour?

Errr. .. No. If you are claiming that something is 'human behaviour' then you might want to make sure it applies to all humans.

So every action made by a human that isn't made by all other humans is not human behaviour? I really don't get what you mean. Just because a behaviour isn't copied by all humans doesn't make it non-human to me.

But several economic studies are extremely robust across cultures and nations around the world. Some apply even to monkeys.

[Gustaf]

Human behavior is usually used in a generic sense; like 'human nature' and so on. As something that is typical and applicable to all of us at least in theory, rather than 'behavior that some humans do'.

So, studying human behaviour would mean studying only acts committed by all humans? That strikes me as pretty odd. Most human behaviour isn't the same for every individual so it would seem a bit pointless.

Most economic studies in these fields tend to be of the type "People with attribute X tends to do Y in situation Z" which is basically what I would expect.

[Gustaf]

Message from the moderator (ag):


Dear Libertas: my most profound apology: I accidentally deleted your post (pressed modify instead of quote: idiot me, the danger of being the moderator). I don't have the original text: if you still have it somewhere, please put it back. Otherwise, once again, my most sincere apology for being such an idiot.

isn't it against the rules to post private messages?

Not your own, I don't think. Regardless, this doesn't seem to have started out as a PM anyway.

On a side note, this discussion seems to have died out the moment facts got introduced to it. How typical. 

[Gustaf]

Mathematical truths don't imply anything about human behaviour either. Should we therefore not use math?

It seems odd to claim that only concepts that pre-suppose a certain behaviour should be used in analyzing behaviour. It certainly doesn't seem like a very scientific approach.

And asking for examples here is like asking us to give examples of, I don't know, French people who can speak English. You really think we're making this stuff up?

When ag says human behaviour is predictable I would guess that he means that aggregate behaviour, ceteri paribus, is predictable. Not individual behaviour and obviously not if you change important parameters (such as culture, perhaps).

[Gustaf]

I presume that he means in the sense that you can look at collective behavior, social behavior, whatever you want to call it; the actions of a large group of people. Which is perfectly legitimate, though the dangers of determinism and essentialisation are always something to be wary of.

Oh I knew what he meant - my point was what you just expressed in the second sentence.

What I meant was simply aggregated actions. I may be able to predict how large a percentage of a group will make choice X.

For instance, I'm ready to predict that the Swedish right will win a majority of the vote from the upper class in the election on Sunday. I wouldn't say that I can predict the vote of a single person though. While I can't predict how an individual voter will vote I can still, in theory, predict the aggregate outcome of the election.

[Gustaf]

The above posts happens to stand as one of the most thorough destructions of an "intellectual" position I've ever seen here on AF.

I have nothing to add to that, but I will comment that opebo's desire to see the poor violently "rise up" against their masters, strikes me as yet another manifestation of his to see poor people, the rest of humanity, really, to destroy themselves en masse for the sake of his own amusement.

Here ag is in his own domain. Well, not quite, but close enough to it. As for opebo, for anyone who has been on the forum as long as any those that participated in this thread, should have learned not to take opebo seriously a long, long time ago.

His politics are caricatures **, but his economics are taken quite seriously here. If it takes a professional to point out the Unsinn of his arguments, even if just casually, then more power to the professor.

**of an indwelling inhumanity, imho

If everyone agreed to ignore him, I'd be fine with it. What bothers me is the fan-base. They're ironically doing just what Opebo usually derides the poors for doing - worshiping their enemy.

[Gustaf]

The above posts happens to stand as one of the most thorough destructions of an "intellectual" position I've ever seen here on AF.

I have nothing to add to that, but I will comment that opebo's desire to see the poor violently "rise up" against their masters, strikes me as yet another manifestation of his to see poor people, the rest of humanity, really, to destroy themselves en masse for the sake of his own amusement.

Here ag is in his own domain. Well, not quite, but close enough to it. As for opebo, for anyone who has been on the forum as long as any those that participated in this thread, should have learned not to take opebo seriously a long, long time ago.

His politics are caricatures **, but his economics are taken quite seriously here. If it takes a professional to point out the Unsinn of his arguments, even if just casually, then more power to the professor.

**of an indwelling inhumanity, imho

Well, the professor has accused him of having dishonest politics, and the proof has been "I believe myself to be on solid ground." Basically, this discussion is like a paper (about individual psychology more than an intellectual position) with a lot of references in the back, except the references all exist in other posters' heads. I've engaged with opebo quite a bit on this board, but don't get what is being referred to. His 'economics' seem to consist of nothing but caricatured polemics that are closely tied, if not identical, to his politics. Can you provide some example of opebo's rich-favoring, serious economics?

He wants a society where the rich can literally buy poor people and where the power lies in the hands of those borne into the upper classes. (i.e. Thailand)

I mean, if he thought the "Good Place" was a country like Sweden his leftism would be a little more credible.