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I agree with much that has already been said above, particularly with regards to the “obvious results.” This is certainly a paper that is a good connecting point for everything we’ve talked about in class up until this point. However, the many comments about the common sense of the experiment results got me thinking back to uncovering the real Adam Smith. Smith is a name associated with the invisible hand and not much else. But as we learned in the first few days of class, Smith was in fact a behavioral economist, not because he had fMRI machines or advanced neuroscience, but simply because he was human. In agreement with Sam, it’s kind of cool that we can now take these common sense human emotions and tie them to economic choices and models. What I found most interesting about the article (which I believe may have also been touched on above), was the idea of opportunity costs in decision making. Opportunity costs are one of the basic concepts we use in economic models to explain why an individual chose buying the new Taylor Swift album over something else (One Direction, maybe?). But in reality, do consumers actually think that way? I’m referring to the example about the $14.99 video: on one occasion the question is phrased as “not buying this entertaining video” or “keeping the $14.99 for other purchases.” Results of the experiment showed that drawing attention to opportunity costs significantly reduced the proportion of individuals willing to purchase the video. This section of the article reminded me of our conversations about “framing,” particularly with relation to the survey work I did in Belize with Professor Casey. While the class didn’t contribute to the creation of the surveys, it would have been a very interesting exercise as how a question is framed could determine how it is perceived and thus responded to.
Toggle Commented Nov 4, 2014 on Econ 398 for Tuesday at Jolly Green General
Beyond the basic concepts of The Wealth of Nations, I don’t know much about Adam Smith’s work. It was surprising to me to read this article referencing The Theory of Moral Sentiments, a work he wrote almost two decades before his more renowned piece which continues to be a building block of classical economics today. Like many above, I enjoyed the altruism section. What was most interesting about this section for me was the “identifiable victim effect” and how it might be affected by the modern 24-hour news cycle. Although being able to see video and photos from crises around the world will certainly humanize victims, at the same time, I wonder if the 24 hour news cycle has also contributed to our inability to do so. We have adapted to a model which has caused us, more or less, to develop a sort of immunity to what we see and hear on the news. We, the audience, now have the ability to pick and choose what we want to listen to or watch (since there are so many media for news today) which might only distance us from the victim. I also agree with Curtis. It’s difficult for me to understand why behavioral economics has remained in the background for so long. Many of the concepts mentioned in this article seem so fundamental to human behavior, yet while they were “discovered” in the 18th century, technology has only recently been able to give us a scientific look into choice in the human brain. For me, this article clarified the relationship between science and economics and allowed me to see the relevance of behavioral economics. I thought this article was very engaging and I look forward to reading more about how these behaviors and choices might potentially be affected by social class, political party, age, or other factors.
Toggle Commented Sep 16, 2014 on 398 reading for Tuesday at Jolly Green General
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Nov 7, 2013