Irrational Economist_ Making Decisions in a Dangerous World - Erwann Michel-Kerjan [40]
CONCLUSION
A broad search for optimal solutions seems not to be the first impulse of human decision makers. Rather, it is to use models and data that have worked passably well in the past, and that seem to be supported by many fellow travelers. If the models we use have been crowned with some formal dignity by academic or professional credentials or practices, so much the better. As researchers we might ask, “What is resolved by recognizing the key role of legitimation in management, in public policy, and in our research lives?” In my view, the main benefit is to promote a broader understanding of the context and of the stakeholders affected by our research, including their different frames of reference and values (see Part Five in this book). As researchers, we are good at anticipating objections and favorable responses from our peers from a methodological point of view. However, in many areas of management and policy, certainly including climate change and sustainability, it is crucial to adopt a broader frame for legitimation that anticipates and encourages our confrontation with the real stakeholders of our research.
RECOMMENDED READING
Easterling, Douglas, and Howard C. Kunreuther (1995). The Dilemma of Siting a High-Level Nuclear Waste Repository. Boston: Kluwer Academic Publishers.
Habermas, Jürgen (1973). The Legitimation Crisis. Boston: Beacon Press.
Kleindorfer, Paul R., Howard Kunreuther, and Paul J.H. Schoemaker (1993). Decision Sciences: An Integrative Perspective. New York: Cambridge University Press.
Kuhn, Thomas S. (1996). The Structure of Scientific Revolutions, 3rd ed. Chicago: University of Chicago Press.
Markus, Hazel, and Paula Nurius (1986). “Possible Selves.” American Psychologist 41, no. 9: 954-969.
Simon, Herbert A. (1976). “From Substantive to Procedural Rationality.” In S. J. Latsis, ed. Method and Appraisal in Economics. Cambridge: Cambridge University Press.
9
Neuroeconomics
Measuring Cognition and Brain Activity During Economic Decision Making
COLIN F. CAMERER
Americans are accustomed to driving cars on the right-hand side of the road and, hence, to first looking to the left when crossing a two-way street. In London, however, people drive on the left-hand side so you should first look to the right (and Londoners do). When Americans visit London they often “forget” and look left, not right. Some accidents result.
Psychology has a substantial understanding of this phenomenon: It is called a Stroop task. Stroop task is the generic term for tasks that pit a highly automated (sometimes called “overlearned”) response against the need to adjust the response. The classic original example involves naming the color of the ink that a word is printed in. If a word is printed in green ink, and the word is RED, people often say “red” by mistake because reading words is much more automatic than naming ink colors.
Perhaps the best that economists have done on the Americans-in-London problem is to conclude that the habit of looking left is a “subjective constraint on feasible strategies,” akin to having a neck brace that makes it difficult to look to the right. But given that the constraint is in the brain, it would be useful to add some psychological or neural detail to economic theory to explain cases like this.
Ever since the rise of the revealed preference paradigm in economics, constructs like utilities of goods, beliefs about event likelihoods, processing of information, and temporal discount rates have been treated as impractical—and perhaps unnecessary—to observe directly. Recently, however, a few economists interested in better understanding and modeling individual behavior have begun to use tools developed in psychology and neuroscience (which studies the nervous system) to observe neural and cognitive correlates