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A key plank of neoclassical economics - taught in every econ 101 class - is that "people respond to incentives". Do you disagree with that? Coz I think most of

• dragonwriter 9y ago
  > A key plank of neoclassical economics - taught in every econ 101 class - is that "people respond to incentives". That people are “rational actors” is, indeed, a central tenet of neoclassical economics, but it is more “people respond to incentives”; it specifies exactly how people respond to incentives; the rational actor model holds that people behave so as to optimize the output of their own utility function as if they had perfect knowledge of the available options and the net utility of each. Of course, that idea is at best a very loose approximation and, at worst — as behavioral economists tend to see it — a dogma that tends to lead people away from analysis and application of the available information on how people actually behave, which is very consistently at odds with the rational actor model.
  • crdoconnor 9y ago
    Nonetheless I don't see much that is irrational about the way economists actually behave in aggregate. I think they more or less rationally response to the incentives they are given. The controversy surrounds what those incentives actually are. Other people (e.g. gamblers) perhaps not so much.