From Bounded Rationality to Behavioral Economics: Comment on Amitai Etzioni Statement on Behavioral Economics, SASE, July, 2009

Abstract

Amitai Etzioni’s short statement opens a very wide range of issues that I think cannot be adequately addressed in a panel of this kind. But it seems to me that the main question posed in the context of the Annual Meetings of SASE is that of how we should understand socio-economics as an intellectual endeavor and where we should look for help and support. For me, speaking here as an economist, what is interesting about the endeavor is that it represents an attempt to temper the almost exclusive emphasis in the discipline of economics upon the individual – an emphasis which is moreover both analytical and normative – with a recognition of and concern for the role of the society in which the individual is embedded. From this point of view, I think the emphasis on Herbert Simon’s notion of bounded rationality is misdirected. The issues once addressed in economics under this heading have since been reinterpreted, partly in response to the kinds of criticisms which Etzioni makes in his statement. They are now being explored in two research programs.