Re: [Fwd: nobel]

[James Juniper <James.Juniper@xxxxxxxxxxxx>]

Just to add to this, Tversky and Kahneman jointly have extended the foundations
of Expected Utility theory by, among other things: (a) recognizing "framing"
behaviour; and, (b) generalizing the independence axiom to account for
paradoxical behaviour (the Allias paradox) along the lines of Quiggin and
Yaari's work. Teversky and Wakker have shown that this approach can also
accommodate decision-making under uncertainty (the Ellsberg paradox), which I
have argued has many analogies with Keynesian liquidity preference theory.

Cheers,

James

-----Original Message-----
From: slarson [mailto:slarson@xxxxxxxxxxxx]
Sent: Thursday, 10 October 2002 9:11 AM
To: pkt@xxxxxxxxxxxxxxxx
Subject: Re: [Fwd: nobel]


Daniel Kahneman has done interesting research on why prices are sticky and
psychological responses to price changes. He has worked in the same area as
e.g. Okun, Blinder and Bewley. In my book I show what significance this type
of work can have for Post Keynesian macroeconomics.

/srl

>===== Original Message From "Forstater, Mathew" <forstaterm@xxxxxxxx> =====
>I don't understand how Smith has gone "beyond the traditional assumption
>of rational human economic behavior driven by self interest". I admit
>that he may have and I just don't know about it. But his thing has been
>experimental economics, and most of what I have seen has tried to
>'prove' traditional economic theory through lab experiments (not the
>rats in cages stuff, more college students making lunch money answering
>questions or playing auction games).
>
>I met him once when he gave a talk where I was teaching at the time. He
>is a 'Marshallian', since when he is 'testing' a particular market, he
>has to assume ceteris paribus for everything else.  So he talked about
>how in these fabricated experiments, the 'market' always tends to an
>equilibrium solution, establishing an equilibrium price, etc. So I asked
>him, "I thought that in Marshall, in equilibrium price equals cost of
>production?" I thought for sure he would have a good answer, I just was
>interested to find out what it was. He obviously had never given it a
>thought and said as much.