Can theory override intuition?

Robin Hanson writes:

For good policy advice, what is the best weight to place on economic theory, versus (individual or cultural) intuitive judgment? [TC: that’s Robin reproducing someone else’s words]

My guess is over 75% weight, so I try to mostly just straightforwardly apply economic theory, adding little personal or cultural judgment [TC: that’s Robin].

In a nutshell, this is the major difference between Robin and me.  In my view there is no such thing as "straightforwardly applying economic theory," unless your prescriptions are limited to "we cannot prove that Giffen goods do not exist."  Theories are always applied and interpreted through our personal and cultural filters and there is no other way it can be.  Robin believes in an Archimedean point for using theory, I do not.  Furthermore we often need to apply personal and cultural judgment to offset the sometimes-erroneous judgments and biases built into the economic way of thinking.  Robin’s post is the clearest example I have seen of what I call Robin’s logical atomism.


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