Daniel M. Hausman holds that preferences in economics are total subjective comparative evaluations—subjective judgments to the effect that something is better than something else all things told—and that economists are right to employ this conception of preference. Here, I argue against both parts of Hausman’s thesis. The failure of Hausman’s account, I continue, reflects a deeper problem, that is, that preferences in economics do not need an explicit definition of the kind that he seeks. Nonetheless, Hausman’s labors were not in (...) vain: his accomplishment is that he has articulated a useful model of the theory. (shrink)

A ubiquitous argument against mental-state accounts of well-being is based on the notion that mental states like happiness and satisfaction simply cannot be measured. The purpose of this paper is to articulate and to assess this “argument from measurability.” My main thesis is that the argument fails: on the most charitable interpretation, it relies on the false proposition that measurement requires the existence of an observable ordering satisfying conditions like transitivity. The failure of the argument from measurability, however, does not (...) translate into a defense of mental-state accounts as accounts of well-being or of measures of happiness and satisfaction as measures of well-being. Indeed, I argue, the ubiquity of the argument from measurability may have obscured other, very real problems associated with mental-state accounts of well-being – above all, that happiness and satisfaction fail to track well-being – and with measures of happiness and satisfaction – above all, the tendency toward reification. I conclude that the central problem associated with the measurement of, e.g., happiness as a subjectively experienced mental state is not that it is too hard to measure, but rather that it is too easy to measure. (shrink)

Subjective measures of well-being—measures based on answers to questions such as ‘Taking things all together, how would you say things are these days—would you say you're very happy, pretty happy, or not too happy these days?’—are often presented as superior to more traditional economic welfare measures, e.g., for public policy purposes. This paper aims to spell out and assess what I will call the argument from directness: the notion that subjective measures of well-being better represent well-being than economic measures do (...) because subjective measures (and subjective measures alone) are direct measures of well-being. My main thesis is that the argument begs the question against proponents of economic measures: it is based on a premise that they reject and that is no less in need of justification than the conclusion of the argument, namely, the proposition that well-being is constituted by subjectively experienced mental states. If subjective measures can be defended as valid measures of well-being at all, I will maintain, it is because they are (imperfect) indirect measures of well-being. (shrink)

This paper examines issues of ontology and methodology in behavioral economics: the attempt to increase the explanatory and predictive power of economic theory by providing it with more psychologically plausible foundations. Of special interest is the epistemological status of neoclassical economic theory within behavioral economics, the runaway success story of contemporary economics. Behavioral economists aspire to replace the fundamental assumptions of orthodox, neoclassical economic theory. Yet, behavioral economists have gone out of their way to praise those very assumptions. Matthew Rabin, (...) for example, writes that behavioral economics “is not only built on the premise that [orthodox] economic methods are great, but also that most mainstream economic assumptions are great.” These apparently contradictory attitudes toward neoclassical theory raises the question of what, exactly, its epistemological status within behavioral economics is. This paper argues that the paradox can be resolved, and the question answered, by thinking of the epistemological status of neoclassical theory within behavioral economics in terms of Max Weber’s ideal types: analytical constructs that are not intended to be descriptively true of anything but which nevertheless can be used for a variety of theoretical purposes. The analysis is consistent with many of the insights from the philosophical literature on models in science and has important implications for the practice of economics—behavioral and neoclassical—as well as for the very nature of rationality. (shrink)

Drawing on research in the psychology of judgment and decision making, I argue that individual economists acting as experts in matters of public policy are likely to be victims of significant overconfidence. The case is based on the pervasiveness of the phenomenon, the nature of the task facing economists?as?experts, and the character of the institutional constraints under which they operate. Moreover, I argue that economist overconfidence can have dramatic consequences. Finally, I explore how the negative consequences of overconfidence can be (...) mitigated, and how the phenomenon can be reduced or eliminated. As a case study, I discuss the involvement of Western experts in post?communist Russian economic reforms. (shrink)

This paper examines the notion of “subjective well-being” as it is used in literature on subjective measures of well-being. I argue that those who employ the notion differ at least superficially on at least two points: first, about the relationship between subjective well-being and well-being simpliciter, and second, about the constituents of subjective well-being. In an effort to reconcile the differences, I propose an interpretation according to which subjective measures presuppose preference hedonism: an account according to which well-being is a (...) matter of desired mental states. (shrink)

The present paper revisits the issue of rational decision making in John Rawls' original position. Drawing on Isaac Levi's theory of decision, I discuss how we can defend Rawls against John C. Harsanyi's charge that maximin reasoning in the original position is irrational. The discussion suggests that systematic application of Levi's theory is likely to have important consequences for ethics and political theory as well as for public policy.

Much recent philosophical literature on happiness and satisfaction is based on the belief that empirical research is relevant to philosophical conclusions. In his2010 book What is This Thing Called Happiness? Fred Feldman begs to differ. He suggests that there is no evidence that empirical research is relevant to long-standing philosophical questions; consequently, that philosophers have little reason to pay attention to the work of psychologists or economists; and that philosophers need not fear embarrassing themselves by being ignorant of important scientific (...) findings that bear directly on their work. Relying on an example invoked by Feldman himself, this paper makes the case that all three theses are false. The argument suggests a picture according to which science and philosophy stand in a symbiotic relationship, with scientists and philosophers engaging in a mutually beneficial exchange of ideas for the advancement of thegeneral knowledge. (shrink)

In promoting spontaneous orders – orders that evolve in a process of cultural evolution – as “efficient,” “beneficial,” and “advantageous,” Friedrich A. Hayek (1899-1992) has often been attributed the belief that there is something desirable about them. For this reason, he has been accused of committing the naturalistic fallacy, that is, of trying to derive an “ought” from an “is.” It appears that Hayek was..

This paper argues that Isaac Levi's account of preference reversals is only a limited success. Levi succeeds in showing that an agent acting in accord with his theory may exhibit reversals. Nevertheless, the specific account that Levi presents in order to accommodate the behavior of experimental subjects appears to be disconfirmed by available evidence.

In the history of Western philosophy, questions of well-being and happiness have played a central role for some 2,500 years. Yet, when it comes to the systematic empirical study of happiness and satisfaction, philosophers are relative latecomers. Empirically-minded psychologists began studying systematically the determinants and distribution of happiness and satisfaction – understood as positive or desirable subjectively experienced mental states – during the 1920’s and 30’s, as personality psychology emerged as a bona fide subdiscipline of psychology shortly after World War (...) I (Angner, 2005a). The first philosopher to take this literature seriously, to my knowledge, was Nicholas Rescher (1972). The topic reappeared in the philosophical literature in the 90’s, as L. W. Sumner (1996) developed his account of well-being as life satisfaction in a manner that appears to have been inspired by the empirical literature, and again in the 00’s, when a number of younger philosophers, apparently independently, turned to this literature in order to examine how it can inform, and be informed by, moral philosophy and philosophy of science (Alexandrova, 2005; Angner, 2005b; Haybron, 2000; Tiberius, 2006). (shrink)

Angner is especially interested in the work of Goodman Watson. “He was a professor of educational psychology at Columbia University who wrote a prominent article in 1930 that outlined his determination to explore whether it was possible to measure happiness,” Angner explains.