Blog by Jason Collins: “…Behavioral economics today is famous for its increasingly large collection of deviations from rationality, or, as they are often called, ‘biases’. While useful in applied work, it is time to shift our focus from collecting deviations from a model of rationality that we know is not true. Rather, we need to develop new theories of human decision to progress behavioral economics as a science. We need heliocentrism.
The dominant model of human decision-making across many disciplines, including my own, economics, is the rational-actor model. People make decisions based on their preferences and the constraints that they face. Whether implicitly or explicitly, they typically have the computational power to calculate the best decision and the willpower to carry it out. It’s a fiction but a useful one.
As has become broadly known through the growth of behavioral economics, there are many deviations from this model. (I am going to use the term behavioral economics through this article as a shorthand for the field that undoubtedly extends beyond economics to social psychology, behavioral science, and more.) This list of deviations has grown to the extent that if you visit the Wikipedia page ‘List of Cognitive Biases’ you will now see in excess of 200 biases and ‘effects’. These range from the classics described in the seminal papers of Amos Tversky and Daniel Kahneman through to the obscure.
We are still at the collection-of-deviations stage. There are not 200 human biases. There are 200 deviations from the wrong model…(More)”