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:

I see a common thread in a lot of the counterintuitive, tabloid, Psychological-Science-type work out there, and that thread is a dismissal of human rationality and even human agency in the political (and, to some extent, the economic) arena. Here I’m speaking of “rationality” not in the limited sense of utility maximization but in the more general sense of thoughtful, purposeful decision making.

In the “Psychological Science” world, voters’ attitudes are determined by upper-body strength and the time of the month, their attitudes on important issues are influenced by meaningless subliminal stimuli, and their elections turn on the outcomes of late-October football games, and they flub any decisions involving uncertainty.

…Put it all together and you get a pre-cognitive conception of the citizen: not a man or woman who weighs the evidence, forms political views, and makes economic and political decisions, but a creature who is continually pushed to and fro by influences of which he or she is not even aware, an unstable product of hormones and the manipulators of political and social marketers, a sort of particle in the water being jostled by invisible Brownian forces.

Let me repeat that the evidence for many of these claims is weak, indeed I have the feeling that a lot of people want to believe in these things so they grab on to whatever “p less than .05″ comparisons they find, and take them as representative of the general population, as scientific truth. On the other hand, I perhaps am coming from the opposite direction.

…I see a lot (although not all!) of this “behavioral” work as being behaviorist in the sense of being faithful to a pre-cognitive, and pre-modern conception of psychology.

The cognitive-psychology perspective, as I see it, is that we are thinking beings, and to the extent that we are influenced in irrational ways (whether by hormones, or subliminal marketing, or whatever), we mediate these influences through our thought processes.

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.