Going back to 1997 - Behavioural Economics and us

In 1997, I bought a book called 'Research on Judgement and Decision Making: currents, connections, and controversies' edited by Goldstein and Hogarth. It was here that I first came across Kahneman and Tversky and their work on such things as representativeness heuristic. I was hooked. I think my favourite piece was one on 'arguing with yourself', because it is something I do often!

I was working on insurance projects at the time, trying to figure out why some people saw risks, where everyone else saw opportunity. I used many of the insights I learned here with my clients, but did not make them public.

Twenty or more years later, I still find this whole field fascinating, but I am also frustrated.

One of the articles in the book complained  - in 1997 - about the field that became Behavioural Economics that it had adopted a 'misleadingly narrow focus'.  That is what has been annoying me in 2018 about the MR take-up of Behavioural Economics.  MR has taken B.E.'s ideas and interpreted them too narrowly, thinking it is all just about biases and heuristics, and how people do things wrong. That's really not what the psychological insights that started all this were telling us. MR has taken the name too literally. Yes it is about behaviour and biases, but it's also about the motivation, goal-setting, beliefs and self-concept that drive the behaviour. It's why I now focus on sense-making.

Tags: Behavioural Economics, sense-making

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