Kahneman’s Gripe

Marketing draws heavily on psychology and economics and I feel that both disciplines have much to offer (as well as weaknesses). So it without any specific agenda that I agree with Daniel Kahneman’s “gripe” (see below). This might not seem brave; Kahneman is a Nobel prize winner and a good rule of thumb is “agree with Nobel prize winners”. (As with many rules of thumbs, i.e. heuristics, agreeing with Nobel prize winners saves effort and is usually sensible but occasionally turns out very badly, e.g. Long-Term Capital Management.)

Kahneman is griping about a research stream that he helped create. He complains that psychology is labeled behavioral economics. “…psychologists applying their field to policy issues are now seen as doing behavioral economics. As a result, they are almost forced to accept the label of behavioral economists, even if they are as innocent of economic knowledge as I am” (Kahneman quoted in Singal 2013). Similar comments might apply to marketing research labelled behavioral economics.

Though there is no agreed classification of disciplines I often read excellent “behavioral economics” papers that I think are psychology. Sometimes this is laboratory based research investigating mental processes so why not call it psychology? I worry more for psychology than economics from this classification. I fear it shows a lack of confidence in psychology. Do psychologists think economics is a “harder” science and envy it? I personally think this is silly. We shouldn’t judge the worth of research on how much math it contains.

While many excellent researchers called behavioural economists are economists, e.g. Colin Camerer, Matthew Rabin, Ulrike Malmendier, some seem less obviously economically focused, e.g. Daniel Kahneman, Dan Ariely, Eldar Shafir. My message when describing this later group is that calling them economists devalues psychology’s (and marketing’s) contribution to social science.

Interestingly my free cartoon book, Behavioral Economics For Kids, refers to many findings that might be better classified as psychology or marketing. It may seem I’m being inconsistent. Of course that we can be inconsistent is a major finding of behavioral economics (or possibly psychology).

Read: Jesse Singal, Daniel Kahneman’s Gripe With Behavioral Economics, The Daily Beast, Apr 26, 2013, http://www.thedailybeast.com/articles/2013/04/26/daniel-kahneman-s-gripe-with-behavioral-economics.html