Building on an overview of dual systems theories in behavioural economics, the paper presents a methodological assessment in terms of the mechanistic explanations framework that has gained prominence in philosophy of the neurosciences. I conclude that they fail to meet the standards of causal explanations and I suggest an alternative ‘dual functions’ view based on Marr’s methodology of computational neuroscience. Recent psychological and neuroscience research undermines the case for a categorization of brain processes in terms of properties such as relative (...) speed. I defend an interpretation of dualities as functional, without assigning them to specific neurophysiological structures. (shrink)

Hayek’s seminal contribution to theoretical neurosciences,The Sensory Order(1952) remains neglected in current efforts at integrating the neurosciences, psychology and economics. I defend the view that Hayek presents the case for an evolutionary alternative to leading paradigms in the field and look at two in more detail: the good-based model in neuroeconomics and the dual systems approach in behavioural economics. In both cases, essential Hayekian insights remain valid in the context of modern neuroscience, allow for taking account of recent research, and (...) sketch a dynamic and selectionist model of choice. (shrink)

A principal source of interest in behavioral economics has been its advertised contributions to policies aimed at ‘nudging’ people away from allegedly natural but self-defeating behavior toward patterns of response thought more likely to improve their welfare. This has occasioned controversies among economists and philosophers around the normative limits of paternalism, especially by technical policy advisors. One recent suggestion has been that ‘boosting,’ in which interventions aim to enhance people’s general cognitive skills and representational repertoires instead of manipulating their choice (...) environments behind their backs, avoids the main normative challenges. A limitation in most of this literature is that it has focused on relatively sweeping policy recommendations and consequently on strong polar alternatives of general paternalism and strict laissez faire. We review a real instance, drawn from a consulting project we conducted for an investment bank, of a proposed intervention that is more typical of the kind that economists are more often actually called upon to offer. In this example, the sophistication of current tools for preference attribution, combined with philosophical externalism about the semantics of preferences that makes it less plausible to attribute their literal self-conscious representation to people as propositional attitude content becomes more tightly refined, blocks applicability of the distinction between nudging and boosting. This seems to call for irreducible, context-specific ethical judgment in assessing the appropriateness of the forms of paternalism that economists must actually wrestle with in going about their everyday business. (shrink)

Behavioral welfare economics assigns different roles to preferences than either non-behavioral forms of welfare economics or theories outside of the domain of welfare economics. In particular...

In this paper, we explore an under-investigated question concerning the class of formal models that aim at providing normative guidance. We call such models normative models. In particular, we examine the question of how normative models can successfully exert normative guidance. First, we highlight the absence of a discussion of this question – which is surprising given the extensive debate about the success conditions of descriptive models – and motivate its importance. Second, we introduce and discuss two potential accounts of (...) the success conditions of normative models. Our tentative conclusion is that the second account is more promising. (shrink)

Deterrence is the backbone of military strategy. Dissuading an opponent from taking a specific action by threat of violence is the definition of deterrence. From the outset of the Cold War there has been a strong link between the study of deterrence and game theoretic analysis. There are compelling epistemic reasons for studying deterrence as a game. By doing so, the strategic interaction between actors is placed at the centre of the analysis, mapping the possible outcomes and revealing the strategies (...) available to the actors. Discussions about various models’ appropriateness and model comparison therefore play a central role in deterrence research; from underlying assumptions and deterrence representation to theory and evidence. This dissertation treats aspects of all of these topics. Article I, “Prospects of Deterrence – Deterrence Theory – Representation and Evidence”, analyses the relationship between model and theory and what happens to a deterrence theory when the rationality assumption is switched to a prospect theoretical utility function. Article II, “A Misfit Model – Bounded Rationality and Deterrence Representation”, defends and remodels Schelling’s idea of irrational threats for effective deterrence. Article III, “Comparable Deterrence – Target, Criteria and Purpose”, treats the issue of how one can compare game theoretic models with one another and proposes a meta-model for how this can be done. Article IV, “Deterring the Dauntless – Appraising the Effects of Naval Deterrence against the Somali Piracy”, estimates whether and to what extent Somali piracy was deterred by the naval intervention. (shrink)

Resource rationality may explain suboptimal patterns of reasoning; but what of “anti-Bayesian” effects where the mind updates in a direction opposite the one it should? We present two phenomena — belief polarization and the size-weight illusion — that are not obviously explained by performance- or resource-based constraints, nor by the authors’ brief discussion of reference repulsion. Can resource rationality accommodate them?