Reading Note — 2018.10.19

# Jason Collins on “A skeptical take on behavioral economics", from Rationally Speaking

Most behavioral biases are identified as deviations from the neoclassical model of expected utility maximization. But the neoclassical model is not a very realistic representation of the world in the first place. Many behavioral biases are not biases at all if you change your benchmark from the neoclassical model to others like the evolutionary model or just a world with real uncertainty.

Many issues addressed by the behavioral “Nudging" are actually incentive problems. People do bad things because they are paid for those things. “…putting some notes or some comparisons onto their power bill with their neighbors so that they might reduce power, is a lot more palatable and easier than going, ‘Okay, well, could we price, say, price carbon properly to get that reduction, or increase the tax?'"


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