The BPS Research Digest has alerted me to a fantastic debate in this month’s Prospect magazine about whether behavioural economics is the savour of the dismal science or just fad in the boom and bust of economic theories.
It’s presented as a sarcastic exchange of letters between Pete Lunn (author of Basic Instincts: Human Nature and the New Economics) and Tim Harford (author of The Logic of Life: Uncovering the New Economics of Everything) and makes some powerful points on both sides of the discussion.
The main thrust of the criticism is that behavioural economics has some interesting lab findings but hasn’t really changed any of the large scale theories of how the economy actually works, while the main line of defence is that this is not a sign of scientific bankruptcy, just the result of it being a young science.
It’s a great complement to the recent Economist article that took a critical look at neuroeconomics.
Link to Prospect debate on behavioural economics.
Link to BPSRD commentary.