I would agree that a collection of biases points to a need for a theory, but I don’t think such a theory is likely to be central to the economics model simply because those deviations are irrelevant in a large number of cases. Simple rational expectations can be quite predictive of human behavior in many cases even though it is clearly completely absurd. Think of the relationship between quantum mechanics and relativity. Relativity doesn’t seem to fit at all in any reasonable way into quantum mechanics, and yet relativity is quite useful and accurate for problems at the atomic level and above.
Jason Collins’ reasoning can be used for almost any scientific theory imaginable. If you examine any scientific discipline closely enough, you will find deviations which don’t fit the standard model. But the existence of deviations does not necessarily prove the need for a new model; particularly if those deviations do not appear to be central to the model’s primary predictions. I would say a rigorously tested theory of how cognitive biases develop and are maintained may provide some useful insights into economics, but that it’s unlikely that they will disprove the basic model of supply and demand.
There are other issues in that essay. Present bias isn’t normally considered a bias. It’s referred to in economics as temporal preferences. Hyperbolic discounting has from its conception been considered an issue of preference, and only later as one of rationality. He then discusses conspicuous consumption in the context of mating signals except that isn’t a new idea either. Economics already has a theory of signalling that roughly matches with what he is referring to, and they’ve already considered social status as a type of signal, and that conspicuous consumption is used to signal social status. That also isn’t an issue of rationality, but one of preference.
Relativity doesn’t seem to fit at all in any reasonable way into quantum mechanics, and yet relativity is quite useful and accurate for problems at the atomic level and above.
General relativity doesn’t seem to fit at all in any reasonable way into quantum mechanics, and it is way overkill for problems at the atomic level (and for a sizeable fraction of problems at the planetary level, too), where special relativity (which does fit with quantum mechanics, save for a few theoretical loose ends that few non-mathematicians have reasons to care about) suffices.
I would agree that a collection of biases points to a need for a theory, but I don’t think such a theory is likely to be central to the economics model simply because those deviations are irrelevant in a large number of cases. Simple rational expectations can be quite predictive of human behavior in many cases even though it is clearly completely absurd. Think of the relationship between quantum mechanics and relativity. Relativity doesn’t seem to fit at all in any reasonable way into quantum mechanics, and yet relativity is quite useful and accurate for problems at the atomic level and above.
Jason Collins’ reasoning can be used for almost any scientific theory imaginable. If you examine any scientific discipline closely enough, you will find deviations which don’t fit the standard model. But the existence of deviations does not necessarily prove the need for a new model; particularly if those deviations do not appear to be central to the model’s primary predictions. I would say a rigorously tested theory of how cognitive biases develop and are maintained may provide some useful insights into economics, but that it’s unlikely that they will disprove the basic model of supply and demand.
There are other issues in that essay. Present bias isn’t normally considered a bias. It’s referred to in economics as temporal preferences. Hyperbolic discounting has from its conception been considered an issue of preference, and only later as one of rationality. He then discusses conspicuous consumption in the context of mating signals except that isn’t a new idea either. Economics already has a theory of signalling that roughly matches with what he is referring to, and they’ve already considered social status as a type of signal, and that conspicuous consumption is used to signal social status. That also isn’t an issue of rationality, but one of preference.