Debunking Economics - the podcast

Does human behaviour render all economic models useless?

Oct 4, 2023

Economists question the predictability of human behavior in economic models. They explore the concept of rational and irrational behaviors and the influence of greed and optimism. The podcast also discusses the limitations of a cooperative framework and the importance of balancing selfishness with altruism through government intervention. Additionally, it explores the impact of financial instruments on the economy, the significance of consumer confidence, and the need for a weather system-like model to evaluate public policies.

44:13

Creator website

AI Summary

Highlights

AI Chapters

Episode notes

Podcast summary created with Snipd AI

Quick takeaways

Economists' assumption of uniform human behavior may render economic models useless.

Predicting behavior for different segments of society could complicate economic models and make them ineffective.

Deep dives

Greed as a Driving Force in Human Behavior

The podcast explores the notion of greed and its role in determining human behavior. It challenges the idea that humans are always driven by rational self-interest, as suggested by economists like Milton Friedman. It argues that the complexities of human emotions and irrationality cannot be overlooked in economic models.

Understanding Human Behavior and Its Impact on Economic Models

03:12

Exploring Complexity and Segmenting the Market in Economic Models

03:57

Introduction

2min

The Relevance of Economic Models and Human Behavior

21min

Complexity of economic models and the role of mathematics

3min

Altruism and Mutual Benefit in Economic Models

9min

The Impact of Financial Instruments and Consumer Confidence on the Economy

10min

Evaluating public policies and the need for a weather system-like model

3min

Economists like to believe human behaviour is predictable. Otherwise, they probably wouldn’t have a job. Steve Keen argue that we do tend to behave like the rest of the herd, but how many herds are there? Phil asks if economists need to develop the sort of demographic segmentation modellers that marketers use? It’s certainly a long way from the basic assumption that we all act the same – as one representative agent, driven by fear and greed. But if we develop a more sophisticated approach, predicting behaviour for a number of segments of society, wouldn’t we arrive at a model so complicated, so full of assumptions, that it renders the model useless? In other words, can we ever really understand the psychology of human behaviour?

Hosted on Acast. See acast.com/privacy for more information.

Remember Everything You Learn from Podcasts

Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.

Debunking Economics - the podcast

Does human behaviour render all economic models useless?

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Greed as a Driving Force in Human Behavior

The Limitations of Rational Decision-Making

The Importance of Structured Relationships within the Economy

The Interplay of Altruism and Selfishness

Understanding Human Behavior and Its Impact on Economic Models

Exploring Complexity and Segmenting the Market in Economic Models

Remember Everything You Learn from Podcasts