Thaler’s Misbehaving is a personal account of the development of modern behavioral economics. It is not the history of behavioral economics. It is a (part of the) history of behavioral economics. Thaler is a contemporary witness, and at the same time one of the major figures in modern behavioral economics.
I like Misbehaving for (at least) two reasons.
First, Thaler establishes very early and often reinforces later that standard economic [consumer / decision] theory, rational choice theory is a normative theory. It describes how people should behave if they were to optimize their utility. It (often) does not describe what they really do. Rational choice theory is based on mathematical axioms, not true human behavior. For many purposes, this is absolutely fine. In many contexts, the observed aggregate behavior is driven more by the institution than the individual. For describing human decision making, for predicting an individual’s choices it is not. This is where we need a positive, descriptive theory.
Human cognition is bounded. Full rationality (in its mathematical definition) is, therefore, impossible. Bounded rationality is the best we can hope for. And this is the core of behavioral economics.
Without a pre-existing unifying model to compete with the dominant Rational Choice Theory research had to start with identifying “anomalies.” Thaler did exactly this. He reports many of the initial hostilities and criticisms against his heretics, the abandoning of the dominant doctrine. Sometimes he also reports a researcher’s conversion as a result to economics becoming a more empirical science. Nevertheless, still today some colleagues, and even colleagues among the experimental economists, would start to defend Rational Choice and Expected Utility Theory even if I just described it as a normative and not a positive theory.
The still standard normative economic theory approach can serve many purposes well and is often easier than more realistic approaches. As-if utility maximization has its purpose. Yet, as the sole policy analysis tool it may lead to the wrong conclusions and should, therefore, be augmented with the many insights we have gained from neighboring fields and the empirical economic research of the decision maker. A recommendation that, obviously, also Thaler advocates and has already helped to implement on several occasions.
Second, somewhere in the middle of the book Thaler alerts,
Tempering expectations about the magnitude of the sizes of effects that will be obtained is important because the success of […some nudges…] can create the false impression that it is easy to design small changes that will have big impacts. It is not.
It is also crucial to understand that many improvements may superficially appear to be quite small: a 1 or 2% change in some outcome. That should not be a reason to scoff, especially if the intervention is essentially costless. […] A 2% increase in the effectiveness of some program may not sound like a big deal, but when the stakes are in billions of dollars, small percentage changes add up. As one United States senator famously remarked, “A billion here, a billion there, pretty soon you’re talking about real money.”
I believe this statement is more important than its place in the book and its extent of the discussion in the book implies.
In the laboratory, we are used to large effects. Experiments are often designed such as to generate as large an effect as possible. Even though the lab is the real world with real world incentives and real world decision makers, decisions outside the lab are made in a context that matters, after a series of other different decisions that matter, by more heterogeneous decision makers what matters, too. This is not just additional noise. These factors need to be investigated as well. Yet, this means that an effect in the field of maybe 2% when standard theory would predict none is huge.
Of course, this also has implications for research. Experimental results obtained under “clean” conditions with small samples in the laboratory will not always translate to similar effects outside the laboratory. The small samples imply that statistical significant effects may be over-estimated. The “clean” lab environment may lack moderating factors. Hence, large-scale field studies will become more and more important as the basis for evidence-based policies. We have already begun to see this.
A good work of science fiction, a space opera does not need to be a monolithic (and maybe even multi-volume) tome. In fact, the collection of short stories and novella(s) that I have just begun proves to be much more enjoyable than some of the tomes that I have read recently.
Poul Anderson’s Technic Civilization Saga really makes me wonder why today’s authors choose to write these huge tomes with a story that drags on and on and needs to be constantly interrupted with a second and third (sub)plot to create the illusion of breath taking action and a plot with substance.
A short story allows to play with a single idea, to focus on one single message. As soon as the point is made the author can stop. It’s like a good speech that does neither exhaust the topic nor the audience. The reader hungers for more.
The novella, then, allows to develop the characters, and the social and economic context in the necessary detail. There is no need for interrupting (sub)plots. A story is told that fits into a larger whole.
As a result every part of the collection brings something new. Reading it does never feel like a chore. It is fast paced. Yet, despite the many different characters that provide the context the reader is never lost. Hence, there is no need for a list of characters or a glossary that you find so often in more modern science fiction and fantasy.
More specifically, reading The Van Rijn Methods evokes the feeling of being a historian working with primary sources. The short stories and novella are pieces of a big puzzle. Maybe some pieces are missing so some parts of the puzzle will show fewer and some parts more details. The gaps are good. Every piece is different. Every piece entertains. Every piece has its own message. I am looking forward to the next six volumes of the collection. And this time, there is no fear that Anderson may not be able to keep up with the standard his first volume has set.
From the research of the past century he distills some sound advice on effective learning techniques and is, (maybe this was the only surprise for me) given the currently available technology and lifestyles with almost constant interruptions and distractions, rather optimistic about learning in the present and future.
While, e.g., Magary’s The End Specialist was dealing with a cure for death’s effect on society: what happens if immortality is introduced, Misspent Youth deals with the impact of the first rejuvenation – also a form of a cure for death – on its immediate environment. Given Hamilton being renowned for space operas – and the last I have read I really liked – I did not expect a family drama. I did not expect to read about the adventures of a randy octogenarian in the body of a 20 year old.
The backdrop, however, is quite interesting. The political and economic outlook into the nearest future was not too far fetched and, despite the exaggeration, credible. Indeed, I would have preferred to read more about this society …without all the drivel about the protagonist’s and his family’s lifestyle.
Weimer’s Learner-Centered Teaching is a bit of a disappointment. Praised as a “comprehensive introduction to the topic” with “up-to-date examples” I was expecting a more hands-on practical book: A book that may describe the author’s (and others’) experiences in as much detail necessary to learn from her success and, most importantly, failures. Yet, this detail is lacking.
The book can only serve as an appetizer to learner centered teaching, not a reference. Although, it really draws (the reader’s / my) interest to more progressive teaching methods, It offers too little detail to implement them right away. There is an extensive, rich list of references (that needs to be consulted for the hands-on advice), so Weimer’s book is not just representing her own opinion but is a summary of many others’ research and experience.
Maybe, if the appendices would have been (considerably) longer and detailed, the book could have been acting as a reference text. In its current form (and it’s already the second, revised edition) it is not more than a leaflet, an advertising brochure for progressive teaching methods.