Estranged parents and a schizophrenic child: choice in economics, psychology and neuroeconomics

1. This paper is a modified extraction from a larger work with a different main focus, ‘Mäki's realism and the scope of economics’, published in P. Ylikoski, J. Kuorikoski, and A. Lehtinen, eds., Economics for Real: Uskali Mäki and the Place of Truth in Economics, London: Routledge. Material is reproduced with permission of the editors and publisher.

Abstract

Gul and Pesendorfer provide the best-known and most strident of a set of recent backlashes by economists against methodological revolutions promoted by some behavioural economists and neuroeconomists. Philosophers are likely to read these responses as merely reactionary, especially as their rhetoric goes beyond what their explicit argumentation validly supports. The present paper identifies the accurate insight on Gul and Pesendorfer's part that explains the impact of their philosophically ragged polemic. This centers on importantly different concepts of choice in the psychological and economic literatures. The psychologist's idea of choice descends from a culturally familiar folk construct generally thought to lie within everyone's unreflective personal acquantance. By contrast, the economist's concept of choice refers to abstract sensitivity of behavioral patterns to changes in incentives, typically at the statistical level of populations. It is reasonable to regard this abstract idea as the basic subject matter of economics, just as Gul and Pesendorfer assert. Appreciating the difference between psychological choice and economic choice is crucial for understanding the methodologically schizophrenic character of neuroeconomics. Much of it merely identifies neural correlates of elements from models in the psychology of valuation. However, the neuroeconomics worthy of the name, as constructed by Glimcher and his collaborators, aims to unify economics and neuroscience. It so far fails to do so in an entirely satisfactory way because it falsely assumes that the conception of choice in psychology and economics is already shared.

Keywords:

• economic choice
• psychological choice
• behavioral economics
• neuroeconomics

Keywords:

• B41
• D01
• D03
• D87

Notes

1. This paper is a modified extraction from a larger work with a different main focus, ‘Mäki's realism and the scope of economics’, published in P. Ylikoski, J. Kuorikoski, and A. Lehtinen, eds., Economics for Real: Uskali Mäki and the Place of Truth in Economics, London: Routledge. Material is reproduced with permission of the editors and publisher.

2. It had not gone entirely un-noticed; Satz and Ferejohn (1994) fully anticipate the main theme I will be drawing out of Gul and Pesendorfer's rhetoric. However, as neuroeconomics had not yet been conceived when Satz and Ferejohn wrote, they lacked the vivid target of an attention-grabbing research programme that made Gul and Pesendorfer's intervention seem much more timely to economists. But I am happy for the present essay to be understood as a reprise of Satz and Ferejohn's central observation.

3. Note that the present discussion concerns consciously experienced processes. Much more is known, even if a comprehensive account is still many years away, about the neural basis of pre-conscious decision making (Gallistel 2009).

4. See, for example, http://www.thestar.com/news/insight/article/635237.