Andrew Gelman’s mistrust of behavioral economics

Gelman, a Columbia statistician and political scientist, voices his discomfort with the behavioralist research and policy attitudes of recent years:







The full post is well worth reading.

I share some of his discomfort with the literature. Every time I see a paper showing that this nudge or that piece of information or this subtle cue changed behavior X in a substantial way, I wonder: how does it all even out in the real world? If this research is right, it shows we are fickle creatures. But we are bombarded by information and cues every moment in the real world. Should we then conclude that the information and nudges all wash out in so much noise? Should I ignore any one study as irrelevant in practice?

My hunch is that yes, we are indeed fickle creatures, and yes a lot of this stuff washes out in noise. Also, like Andy, I think the fickleness reduces when the stakes are high, or when we have opportunities for careful thinking.

But I also think there are situations where people are less likely to give a decision careful thought, and the biases and mistakes could be quite profound. Entire industries are founded on this principle. One is called marketing.

Then again, I would have guessed that’s what the median behavioral economist/psychologist believes. As usual, anyone in the extreme is probably wrong.

22 thoughts on “Andrew Gelman’s mistrust of behavioral economics

  1. Gelman seems to confuse behavioral economics with social psychology (in his defense, so does the press). Evidence for the influence of Nudges in high stakes decision is plenty. Maybe most notably default effects in 401(k) accounts, but also living wills (preference for end of life care). The UK’s Behavioural Insights Team also has a good track record with their field studies.