What’s wrong with behavioural economics?
The next book of Ariely is about to be published. Since I was quite disappointed about two others of his books, I’m not motivated to read it. Fortunately this weekend the daily journal Trouw published a long interview with the author about his new book. And again, his answers are disappointing.
To illustrate my disapointment a few examples of experiments, which are discussed.
- A person has bought a theatre ticket in advance, and at the moment of entering the theatre, he discovers that he had lost the ticket. He decides not to buy a new one and turns back home. What makes this behaviour irrational? Many people in my neighbourhood, among them myself, chose this option, and came up with relevant motivations. A clear ‘no’ is an incentive to be more cautious with an expensive ticket. The person has a limited budget for cultural activities, and a ‘yes’ would mean that the person is out of budget control.
- A person has invested a lot of resources in his sport’s career. It seems that he will not reach his goals. Nevertheless, he perseveres – hoping for success in the end. He will never forgive himself not to have tried everything, and to have given up before the end. Ariely calls this behaviour irrational. I just admire this athlete.
- A female employee claims equal pay for equal productivity. So, if a male employee with the same education and the same experience and productivity earns 5,000 euros per month, she considers it fair to earn the same amount. Ariely calls this claim irrational.
- A woman is a recognised bargain hunter, and very successful in terms of self-respect and social recognition. Moreover, she hunts by walking an biking, which is a very healthy activity. Ariely is just counting amounts of money, and interpret some actions as irrational.
- A person buys a simple service, which takes about 5 minutes. Then is he confronted with a bill of 200 euros. His reaction is one of moral arousement: a simple activity, 5 minutes for 200 euros. Ariely calls this moral reaction irrational, although the reaction might be in accordance with the prevailing economic culture.