Estrategias didácticas motivacionales del Programa

”How strange and confusing are people’s conceptions! Sometimes, when you think about it, you don’t know whether to laugh or cry. Today it occurred to me that self-sacrificing love is nothing more than an ex-treme form of egoism.” Alexander Herzen, Who is to blame?

The examples given in section 1.3 show violations of the standard assumptions in economics. A growing literature combines psychology and economics to formu-late alternative assumptions that describe the data better. Here are some of my (I am afraid unorganized) views on the field of psychology and economics.

First and foremost, combining insights from psychology and economics clearly leads to interesting results, as section 1.4 and a bunch of other contributions to the literature make clear. Patterns of behaviour can be explained that could otherwise not have as easily and realistically been explained by the standard economic assumptions. Ignorance of information is a good example.

Second, it is worthwhile to note that in many cases most of economic methodol-ogy is being maintained. Bénabou and Tirole [2001] for instance, drop the assump-tions of exponential discounting and perfect self-knowledge, but retain the idea of maximizing agents playing Bayesian equilibrium strategies. Likewise, altruism can still be modeled using the individualistic approach of economic methodology.

Perhaps literally (as suggested by Herzen) but at least in the ”as if” sense.

However, some disclaimers are in place. Some of the examples to illustrate violations may be constructed for this purpose or at least constructed to make the violations most visible. It is not always made clear how sensitive the experimental results are to variations in the payoff structure. This makes it difficult to generalize the results.

Moreover, the economic man can still be useful in a (conditionally) normative way. Even if it does not describe people how they actually behave, it is still a valuable framework for analyzing how people should behave in order to achieve certain ends. Thus, I tend to agree with Luce and Raiffa who relatedly discuss the use of game theory:

”It is crucial that the social scientist recognise that game theory is not descriptive, but rather conditionally normative. It states neither how people do behave, nor how they should behave in an absolute sense, but how they should behave if they wish to achieve certain ends” (cited by Zwick et al. [1999, 7]).

The same can be said about the economic paradigm, which gives directions for how to behave conditional on agreement with the underlying assumptions.

Furthermore, it is not always useful to make more realistic assumptions about individual behaviour. In many cases, though certainly not all, making more real-istic assumptions drastically increases the complexity of analysis and this is not always outweighed by an increased accuracy of predictions. Sometimes, it does not matter at all. Fehr and Schmidt [1999] have showed that even though agents behave as inequality averse in some experiments, in other experiments choices are exactly as predicted by standard economic assumptions (i.e. selfish). Smith [1962] showed experimentally that in a double auction market, prices converge to the competitive equilibrium.

Of course, it is still interesting to know when sentiments like inequality aversion affect outcomes and when they do not, so this argument does not imply that

psychological sentiments should immediately be disregarded. What it does mean is that, depending on the context, it is sometimes no sacrifice not to include such sentiments in the model. A bit paradoxically, more work on psychological sentiments is needed in order to know when including these sentiments is not needed.

Relatedly, one has to bear in mind that, taken as an ”as if” approach, the eco-nomic paradigm is still a rough approximation of reality. In this context, Roth [1995] rightly remarks that ”To the extent that utility maximization is viewed as a useful approximation of behaviour, it can’t be easily displaced by coun-terexamples, since approximations always admit counterexamples” (Roth [1995, 78]). Roth continues by arguing that it is nevertheless still valuable to know the conditions under which the approximations break down. Is the Allais paradox (discussed in section 1.3.3) an anomaly and sensitive to the parametrization, or can it be generalized? In this thesis, I have tried to focus on cases where such breakdowns occur and where it seems to me that a rough approximation does not suffice.

It is also worthwhile to note the following. It seems that many psychological phenomena have two sides: an intrinsic value and a strategic role. Donations to charity are made out of love, but also to gain approval. The balance between those sides is a delicate matter. Assuming an intrinsic value for a sentiment of-ten suggests that a shortcut approach is taken, and that the more fundamental motivations are ignored. Or, as Güth [1995, 342] puts it:

”Very often this [explaining anomalies] is done by including additional arguments of utilities (...) Doubtlessly a lot can be learned from such attempts to explain experimental phenomena, especially when they are based on well accepted motivational forces. Very often, this type of research resembles, however, a neoclassical repairshop in the sense that one first observes behaviour for a certain environment and then defines a suitable optimisation or game model which can account for what has been observed.”

However, it is easy to tip the balance too much in favour of strategic reasons.

Something should not be too easily dismissed as an intrinsic value. Evolutionary forces can result in intrinsic values such as fairness and other emotions (Frank

[1985]). Here, research from other disciplines, notably psychology and biology, is in particular useful.

In this thesis, and more generally in the field of economics and psychology, there is a relatively intensive interaction with experiments both from economics and psychology. The advantage of these experiments are that situations are well controlled, and that they give much more insight in individual behaviour than aggregated data. Because of its importance, it is necessary to be aware of the shortcomings. Therefore, as a final consideration, I would like to point out some of the limitations of experimental economics.

First, experimental results are sometimes very sensitive to the framing and wording, and hence one should be cautious in generalizing the results. Secondly, it is by no means obvious that results can be directly translated into out-of-laboratory situations. Being fair in the ultimatum game is not the same (and certainly does not imply) that these people are also fair in ”comparable” real life situations. Thirdly, subjects often have relatively little time to learn the game and understand the consequences. Experiments quickly become too complicated to be understood within the available time frame⁵. Time constraints pose a nat-ural limit on the complexity of games. Of course, in real life there is also not al-ways enough opportunity to learn, so this argument does not alal-ways hold. Fourth, experiments often use a relatively small sample and are not often replicated (Ru-binstein [2001]). The latter is due to the fact that replications are unlikely to be published. Thus, although experiments have the advance of creating nicely controlled situations, and provide us with microdata, their shortcomings should be reminded. In this thesis, I have tried to borrow evidence from experiments which results seem robust, and otherwise to mention where more replications and investigations are welcome.