INST 354 Lecture Notes - Lecture 9: Behavioural Sciences, Adaptive Learning, Vacuous Truth
10 Feb 2019
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Document Summary
The answer to this question appears to depend in large part on the field of the person asking it. Traditional economists, looking at the aggregate behavior of many individual decision makers in broad economic contexts, are satisfied that the principle of maximizing expected utility does describe what happens. Becker and many of his colleagues have taken this assertion seriously and have provided insightful analyses of nonfinancial, nonmarket behaviors including marriage, education, and murder. There are good reasons to start with the optimistic hypothesis that the rational, expected utility theory and the descriptive how people really behave theories are the same. After all, our decision-making habits have been designed by millions of years of evolutionary selection and, if that weren"t enough, have been shaped by a lifetime of adaptive learning experiences. Surely, truly maladaptive habits will have been eliminated by the pressures of evolution and learning and maybe, optimistically, only the rational tendencies are still intact.
