Can theory override intuition?

by on December 19, 2007 at 11:59 am in Economics | Permalink

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.

Michael Blowhard December 19, 2007 at 12:25 pm

Hard to get around that damn “personal point of view” and “cultural point of view” thing, isn’t it? It just keeps cropping up.

I wonder why some people are so determined to keep trying to conduct life as though the point-of-view conundrum can be willed away. Is it a particular *kind* of person who wants that to be the case? Me, I rather like the fact that we’re stuck with the point-of-view problem.

But then I wound up in the arts …

Bob Montgomery December 19, 2007 at 12:34 pm

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.

You sound like my Van Til/presuppositionalist friend…sheesh.

:)

Bernard Yomtov December 19, 2007 at 12:57 pm

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.”

Correct, and a good thing it is too, in any but the simplest cases.

Andy December 19, 2007 at 1:51 pm

What’s the economic basis for a 75% weight? Is there a loss function?

RobbL December 19, 2007 at 1:57 pm

Haven’t we been over this before? People have used “logic” and “rationality” to “prove” all sorts of things throughout history.

Other people are sometimes not able to detect any weaknesses or fallacies in said “logic”.

Still bumblebees fly and the world is older than 100 million years etc etc.

I think Robin has yet to face his biases.

samson December 19, 2007 at 3:39 pm

the split in Robin’s infinitive is the largest i’ve seen.

shawn December 19, 2007 at 4:46 pm

…i could’ve answered this from theology. :) “there is no such thing as presuppositionless exegesis.” There’s an interesting case where (in line with alex’s previous post) education is a major determining factor. Robin was ?computer science? in his former life, no? I’d think that would tend to be much more black and white…

Neel Krishnaswami December 19, 2007 at 6:07 pm

Depends on the branch of computer science. Formal methods types are disproportionately attracted to constructive mathematics. Since that’s a minority viewpoint we end up learning a lot of philosophy of mathematics, because we need to justify rejecting the law of the excluded middle to third parties a lot more often than classical mathematicians need to justify its use. And studying the philosophy of mathematics tends to leave you much more circumspect about what the force of a mathematical statement actually is.

heedless December 19, 2007 at 9:10 pm

Give Robin some credit for being willing to change his mind – the entire point of his blog is to meditate on his (and other people’s) biases and try to correct for them.

However, I don’t see how you can even talk about an answer based partialy on intuition. Isn’t it all or nothing? If you fill in the gaps based on what feels right (which in the end is all that intuition is ) then your intuition pretty much determines your conclusions, even if you use the framework of theory to back up your point. See the great Krugman vs. Mankiw debate on the economy if you don’t think this is true. And remember, they are both highly respected classical economists.

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nick December 22, 2007 at 2:02 pm

The wisdom evolved by previous generations, whose brains were as big as ours, and where their ideas have stood the test of time (i.e. have been in continuous use for hundreds of years by many people, even if we disagree with them or can’t figure out their logic) should be given about 90% weight. Note that this is very different from “cultural intuition”, which is usually just faddish prejudice.

The logic of our generation, as yet untested in the human lifecycle, but starting to account for novel phenomena, should be given about 10% weight. Among that 10% is economic logic. All such logic contains unstated assumptions which, in the social sciences, usually turn out to be highly erroneous.

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