(WP 2013-10) Neuroeconomics and Identity

This short paper discusses majority and minority views in economics regarding the value of neuroscience for economics – and thus the value of the neuroeconomics research program. It argues that neuroeconomics’ reception ultimately depends on whether economists adopt a philosophy of science thinking closer to what exists in other sciences. It then argues that an inadvertent product of this debate is whether people can be identified as relatively independent agents. The paper concludes with comments on what this debate implies about the conception of the decision-maker as a relatively independent identity

What is Behavioural Economics Like?

Behavioural Economics’ milestones, Endowment Effect and Loss Aversion, have been recognized as ‘well documented,’ ‘robust,’ and ‘important’ even by the critics. But well documented, robust, and important what? Are these stylized facts, theoretical constructs, or psychological truths? Do they express genuine preferences or are they judgement mistakes? We discuss the problems with the nature of these claims in the lights of the goals of Behavioural Economics: to improve economics’ realisticness and to be considered mainstream. We argue that, under sensible interpretations of Loss Aversion and Endowment Effect, Behavioural Economics is neither more realistic than, nor part of the mainstream.Behavioural Economics, Decision-Making, Endowment Effect, Loss Aversion, Uncertainty

Pappa Ante Portas: The effect of the husband's retirement on the wife's mental health in Japan

The \u201cRetired Husband Syndrome\u201d, that affects the mental health of wives of retired men around the world, has been anecdotally documented but never formally investigated. Using Japanese micro-data and the exogenous variation across cohorts in the maximum age of guaranteed employment induced by a 2006 Japanese reform, we estimate that the husband's earlier retirement significantly increases the probability that the wife reports symptoms related to the syndrome. We also find that retirement has a negative effect both on the household's economic situation and on the husband's own mental health, and that the higher economic distress contributes to reducing the wife's mental health

Analytic Narratives: What they are and how they contribute to historical explanation

The expression "analytic narratives" is used to refer to a range of quite recent studies that lie on the boundaries between history, political science, and economics. These studies purport to explain specific historical events by combining the usual narrative approach of historians with the analytic tools that economists and political scientists draw from formal rational choice theories. Game theory, especially of the extensive form version, is currently prominent among these tools, but there is nothing inevitable about such a technical choice. The chapter explains what analytic narratives are by reviewing the studies of the major book Analytic Narratives (1998), which are concerned with the workings of political institutions broadly speaking, as well as several cases drawn from military and security studies, which form an independent source of the analytic narratives literature. At the same time as it gradually develops a definition of analytic narratives, the chapter investigates how they fulfil one of their main purposes, which is to provide explanations of a better standing than those of traditional history. An important principle that will emerge in the course of the discussion is that narration is called upon not only to provide facts and problems, but also to contribute to the explanation itself. The chapter distinguishes between several expository schemes of analytic narratives according to the way they implement this principle. From all the arguments developed here, it seems clear that the current applications of analytic narratives do not exhaust their potential, and in particular that they deserve the attention of economic historians, if only because they are concerned with microeconomic interactions that are not currently their focus of attention

Tastes, Castes, and Culture: The Influence of Society on Preferences

Economists have traditionally treated preferences as exogenously given. Preferences are assumed to be influenced by neither beliefs nor the constraints people face. As a consequence, changes in behaviour are explained exclusively in terms of changes in the set of feasible alternatives. Here we argue that the opposition to explaining behavioural changes in terms of preference changes is ill-founded, that the psychological properties of preferences render them susceptible to direct social influences, and that the impact of "society" on preferences is likely to have important economic and social consequences.endogenous preferences, culture, caste, frames, anchors, elicitation devices

Tastes, castes, and culture: The influence of society on preferences

Economists have traditionally treated preferences as exogenously given. Preferences are assumed to be influenced by neither beliefs nor the constraints people face. As a consequence, changes in behaviour are explained exclusively in terms of changes in the set of feasible alternatives. Here we argue that the opposition to explaining behavioural changes in terms of preference changes is illfounded, that the psychological properties of preferences render them susceptible to direct social influences, and that the impact of “society” on preferences is likely to have important economic and social consequences.Endogenous preferences, culture, caste, frames, anchors, elicitation devices