Four dot points to end the chapter

  • • Together, over the past 30 years or more, economists and psychologists have documented quirky human decision-making patterns that appear systematically in various settings.
  • • Being patterns of human behaviour, these discoveries have implications for terrorism and law enforcement.
  • • Because formal mathematical modelling came to dominate economics, the sounder method of relying on verbal arguments, supported by theory, data and logic to explain patterns of behaviour has been overshadowed.
  • • Using orthodox and behavioural economics as complements allows us to develop deeper narratives about human behaviour, touching on humans’ risk preferences, their tendency to follow others, copycat behaviour, their fears and hopes, their overconfidence and their ability to implement strategies consistent with their survival. All this and much more.

Notes

  • 1 Coll (2018, p.24).
  • 2 McCloskey (1985) and Summers (1991).
  • 3 Probably the best known of the game theorists is John Nash, whose biography was dramatised in the film A Beautiful Mind. In game theory circles and in economics, Nash (1950a, 1950b, 1951,1953) is known for his work on non-cooperative games and his Nash equilibrium concept.
  • 4 Selten’s work is too voluminous to list here. For example, see his early papers (in German), ‘Bewertung strategischer Spiele’(1960) and'Ein Oligopolexperiment’(1959) (with Heinz Sauermann).
  • 5 A subject to which Reinhard Selten also made significant contributions (e.g. Selten 1998).
  • 6 Also see Kahneman, Slovic andTversky (1982).
  • 7 We use ‘academic research’ as a catch-all for formal research. This could come from think tanks or from research divisions within the organisation itself.

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